Commodities: Certified does not mean deforestation-free
March 15, 2021
Greenpeace’s analysis of nine major certifications designed to tackled commodity-linked deforestation identifies the ways in which certification schemes for agricultural and forestry commodities can miss or even conceal companies’ contribution to deforestation and related impacts on the broader environment and on people. In addition to other recommendations, Greenpeace points to four actions for companies sourcing forestry and agricultural commodities: 1) require and implement their own environmental and social standards for commodity production in their value chains; 2) set up traceability and transparency systems for all commodities they source; 3) proactively monitor their supply chains; and 4) support and finance protection and restoration and forests and ecosystems.
In Destruction: Certified, environment and human rights advocacy organisation Greenpeace International explores the “effectiveness of (mainly voluntary) certificationfor land-based commodities as an instrument to address global deforestation, forest degradation and other ecosystem conversion and associated human rights abuses (including violations of Indigenous rights and labour rights).” The report assesses “nine major certification schemes spread over five land-use sectors based on a review of publicly available information (together with feedback from the schemes themselves)” and the views of certification experts. With this report, Greenpeace aims “to inform decision making by governments and companies on what role certification can play as a tool for cleaning up supply chains, what reforms are required and what other measures are needed to address the wider biodiversity and climate crises.”
The certification scheme reviewed are:
Biofuels certification schemes: International Sustainability and Carbon Certification
Cocoa and coffee certification schemes: Fairtrade and Rainforest Alliance/UTZ
Palm oil certification schemes: Roundtable on Sustainable Palm Oil (RSPO) and Indonesian Sustainable Palm Oil / Malaysian Sustainable Palm Oil (ISPO/MSPO)
Soya certification schemes: Round Table on Responsible Soy (RTRS) and ProTerra
Forest and wood certification schemes: Forest Stewardship Council (FSC)
The headline conclusion of the report is that “[c]ertification on its own has not helped companies meet their 2020 commitments to exclude deforestation from their supply chains.” At the same time, fundamental reforms to certification schemes—such as strengthened standards and transparency—could help certifications “play a role to help lift environmental and social performance on the ground.” We unpack these findings below by sharing some of the key takeaways of the report:
“Inherent limitations” of certification schemes to address complex environmental challenges
The structure of certification as a market-based mechanism means that “the primary incentive producers and consumer companies have for meeting environmental and social standards is not the ‘sustainable’ production of products but the reward of increased market access and sales.”
Certification schemes can differ significantly from one another, with some having better governance models incorporating diverse stakeholder perspectives, more rigorous standards, and better monitoring of company implementation.
Certification shifts responsibility to consumers to understand the claims made by certified products—”an evaluation consumers may be ill equipped to make.”
In addition, certification schemes do not reduce the demand for agricultural and forestry commodities, and this demand has only continued to grow putting “additional pressure on land” and risking “further driving deforestation and conversion of other natural ecosystems.” What’s more, “leakage” (the continued sale of unsustainable, non-certified commodities) continues to plague certification bodies.
Features undermining the effectiveness of certification scheme effectiveness
Imbalances in governance and decision-making: Private sector actors are often disproportionately represented on the standards-setting and governance bodies of certification schemes. Some impacted stakeholders, like indigenous peoples, rural communities, smallholders and workers may not have adequate representation or any representation at all.
Little consistency or and lack of universal minimum standards between some certifications: Certification schemes can differ significantly in their scope, leading to gaps. For example, they may address environmental damage and indigenous rights but fail to set requirements on other issues plaguing the agro-commodities sector, like child labour. Standards are also inconsistent in their application—according to Greenpeace, many allow companies to claim certification at corporate group-level, even if only parts of their operations and supply chain are certified.
Traceability and transparency is an ongoing challenge: According to the report, most certifications permit the mixing of certified and uncertified raw materials, inhibiting traceability to the point of origin. Further, “[n]one of the schemes requires full transparency concerning the ultimate ownership of certified companies and their corporate groups. There is variation across schemes, ranging from essentially no transparency to full reports of audits and maps being made publicly available.”
Auditing fails to capture all risks and impacts in practice: Greenpeace points out that “[a]uditing suffers from the inherent flaw that scheduled audit visits present only a snapshot of conditions at a particular location, at a specific time, and allow companies to ‘prepare’ for the audit.” There are also inconsistencies in the audit approach from company to company, even within the same certification scheme.
“Sparse, limited, and often context-specific benefits”: The report highlights case studies from the Round Table on Responsible Soy (RTRS), ProTerra, the Forest Stewardship Council (FSC) and the Roundtable on Sustainable Palm Oil(RSPO) showing that structural gaps and patchy oversight of standards allow certified companies to cause or be linked to environmental destruction and human rights abuses, sometimes without consequences.
Improvements needed to strengthen certification schemes
“Equitable governance” with “a majority of representatives of social and environmental interests – including Indigenous and local communities– so that decisions are made in the interests of people and the planet, rather than profits.”
Standards that include 1) respect for indigenous peoples’ rights; 2) prohibition of direct and indirect deforestation; 3) strong, early natural ecosystem conversion; 4) restoration and remediation requirements; 5) protection of particularly vulnerable and crucial ecosystems, such as those with High Conservation Values, High Carbon Stock, conservation areas and Intact Forest Landscapes; 6) provisions that support smallholder implementation
“[A] comprehensive (unbroken) traceability system for certified products from farm to consumer,” including certification of all producers and middlemen at interim stages of the value chain.
Independent certification bodies and auditors, and a “firewall” structure between the two
Enforcement of rules, including “sanctioning or expelling certificate holders or members who breach standards.”
The way forward: The role of companies
Greenpeace points to core recommendations for companies to improve deforestation outcomes:
“Companies must begin by immediately requiring and implementing strong environmental and social standards for commodity production, setting up traceability and transparency systems for all commodities, enabling them to identify all traders, producer and corporate groups and third-party suppliers in their supply chains.”
“They should also proactively monitor their supply chains to ensure that all suppliers complywith strong environmental and social standards and policies and, when in place, robust regional or national legislation.”
“Finally, companies need to go beyond simply removing deforestation from their supply chains to actively carrying out, supporting and financing forest and natural ecosystem protection and restoration, in collaboration with local governments and local and Indigenous communities.”
“Certification schemes have a potential role to play … as a supplement to more comprehensive and binding ‘sustainability’ and responsible trade measures implemented by the governments of both producer and consumer countries. But to be fit for even this purpose, they require fundamental reform. A starting point would be to ensure that the schemes’ governance bodies have a majority of representatives of social and environmental interests – including Indigenous and local communities – so that decisions are made in the interests of people and the planet, rather than profits.”
“The United Nations Environment Programme (UNEP) reports that between 70% and 80% of total deforestation globally is caused by expansion for agricultural production, mainly animal farming and soya and palm plantations. Together with natural ecosystem conversion and degradation, deforestation is a major contributor to the climate emergency and biodiversity crisis.”