South East Asia is the largest producer of palm oil © 123RF
South East Asia is the largest producer of palm oil © 123RF

Action on commodities still needed to save forests

Will Green is news editor of Supply Management
4 November 2016

Firms have “started to make good” on pledges to tackle deforestation in their supply chains but commitments are generally not time-bound and implementation is mixed, according to research.

A report, describing itself as the first “coherent picture” of efforts since the New York Declaration on Forests (NYDF) in September 2014, analysed 629 companies involved in the production of palm oil, timber, cattle and soy – the four commodities responsible for 40% of deforestation.

Under NYDF, governments, NGOs and firms pledged to halve natural forest loss by 2020 and end it by 2030.

The report, Eliminating Deforestation from the Production of Agricultural Commodities, was produced by a coalition of think thanks and research organisations. It found that 415 companies had made 701 commitments since 2014, and more recently 108 had made 212 commitments since December 2015. The vast majority of pledges relate to sourcing from South East Asia, South America and West Africa.

But commitments are “piecemeal” and “nearly all company commitments only address one commodity or a specific geography”, said the report. “Only 43 – 10% – of the 415 companies with commitments have set company-wide targets that cover all commodities relevant to the company’s portfolio.”

Some 60% of firms involved in palm oil and 53% of those using timber have made “commodity specific commitments”. The figures for companies involved in soy and cattle are 21% and 12% respectively. “This is a matter of concern, considering that cattle have a deforestation footprint that is nine times larger than one associated with palm oil,” said the report.

The report said most of the companies announcing commitments are manufacturers and retailers, nearly 90% of which are headquartered in Europe, North America or Australia, while producers, processors and traders and firms headquartered in Latin America, Africa and Asia “have been slower to act”.

There has been “significant effort” to implement supply chain commitments, but less than half of firms have “time-bound actionable plans” and “tracing commodities to the producer level remains challenging for many companies”.

“The majority of companies opt to limit procurement to certified products rather than defining company product standards,” said the report. Some 87% of firms had adopted a procurement standard for timber or wood pulp, 80% for palm oil, 76% for beef and 64% for soy.

“Supply chain efforts are generally more advanced in commodities with widely recognised certification standards and integrated supply chains, which provide easy and accessible options toward sustainability,” said the report.

Charlotte Streck, co-founder and director of Climate Focus, a think tank that led development of the report, said: “What we need now, if forests and the climate are to be saved, is action on commodities with the biggest forest impacts and an increase in partnerships, between companies and governments and among retailers, traders and producers, that pool resources to save forests.”

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