Our key takeaway: No-deforestation is central to no net-zero emissions. In other words, without a significant focus on no-deforestation, we will never be able to achieve our climate goals. Forests help us absorb and reduce our emissions, forests enable terrestrial biodiversity which provide a range of goods and services, forests contribute to climate regulation, forests reduce vulnerability to climate change, forests support the livelihoods of people - and the list goes on. However, company disclosures from 675 companies that produce or source at least one of the seven commodities responsible for most commodity-driven forest loss (palm oil, timber products, cattle products, soy, natural rubber, cocoa and coffee) show us that this central link is being overlooked. Accountability Framework initiative (AFi) and CDP find that “it would be generous to say that the glass is half-full”: companies are not doing enough to address deforestation and related risks. We need more scale, scope and rigour on the part of companies when it comes to deforestation. Some leading companies are showing the way forward, and more needs to be done to transform supply chains - not only to curtail deforestation and ecosystem conversion but also to meet climate and nature goals.
Accountability Framework initiative (AFi) and CDP published ‘From Commitments to Action at Scale” Critical steps to achieve deforestation-free supply chains’ (May 2022). The report presents the results from data disclosed through CDP’s forests questionnaire in 2021 by 675 companies that produce or source at least one of the seven commodities responsible for most commodity-driven forest loss: palm oil, timber products, cattle products, soy, natural rubber, cocoa and coffee. This included 100 producers, 241 processors, 137 traders, 378 manufacturers, and 185 retailers:
- “No net-zero emissions without no-deforestation”: The report highlights the central role of no-deforestation to achieving net-zero emissions. “We are unlikely to avoid disastrous effects of climate change without halting deforestation and other natural ecosystem destruction, which account for at least 11% of human greenhouse gas (GHG) emissions. The most recent Intergovernmental Panel on Climate Change (IPCC) Assessment Report clearly identifies the centrality of forests in mitigating climate change, estimating that the land sector can provide up to 30% of the emissions reductions needed to meet 2050 targets, with forests and other natural ecosystems providing the largest share of that mitigation potential.” The report also speaks to the connection between protection of forests and achieving a nature-positive future: “[a]ound 80% of terrestrial biodiversity is found in forests which drives the production of a plethora of goods and services. Some of these contribute to climate regulation and reduce vulnerability to climate change, but forests also boost rainfall and produce clean water impacting people thousands of miles away. They harbor pollinators and play a central role in pest and pathogen control. They also directly support the livelihoods of some 1.6 billion people.” In addition, without the systems, traceability and landscape-level collaborations in place to address deforestation. “companies will be unable to address GHG emissions and other environmental impacts in their supply chains.”
- Glass half-empty when it comes to company progress, yet can be filled: When it comes to company progress based on company disclosures, “[u]nfortunately, it would be generous to say that the glass is half-full. Disclosures reveal that most companies are not yet taking the necessary actions to deliver existing commitments to address deforestation and related risks.” The report finds that even though companies are putting “governance and operational systems in place to understand and mitigate deforestation and related risks … these systems currently lack the scale, scope and rigour necessary to effectively address deforestation and ecosystem conversion associated with agricultural and forest commodity production and trade.” At the same time, the authors point to “progress made by leading companies using readily available tools and systems”: this progress “demonstrates that the goals are attainable. They only require adjusting business practices in ways that are largely known and tested.”
- Specific findings: The report provides six key findings. First, only 36% of companies “have public company-wide no-deforestation or no-conversion policies and only 13% of companies have commitments to no- deforestation/no-conversion that are well-aligned with good practice.” Second, “few companies are setting timebound, quantifiable targets related to supply chain control systems” with only 14% having “a traceability target related to their no-deforestation/no-conversion commitments.” Third, “[w]hile 76% of companies report having a traceability system for at least one commodity, most companies have significant gaps in supply chain traceability, which is necessary to assess and manage deforestation and conversion risk.” For instance, “only 23% of reporting companies can trace more than 90% of the volumes they produce or source back to the municipality level or equivalent for least one commodity.” Fourth, “around only a quarter report providing technical or financial assistance to direct suppliers or smallholders, and a third report having processes to manage supplier non-compliance.” Fifth, “[j]ust around a quarter of all disclosing companies have monitoring systems in place to assess compliance with rigorous no-deforestation/no-conversion policies or commitments.” And sixth, only 19% of companies “report that more than 90% of their supply chain volumes comply with no-deforestation/no-conversion policies or commitments.”
