Our key takeaway: Forests are critical to the global economy with an estimated value of at least US$150 trillion. Yet deforestation is still happening at an unprecedented rate with over 15 million football fields of trees cut down in tropical regions last year. This seems to be happening despite a record number of companies disclosing their progress towards eradicating deforestation in their supply chains, which has increased by almost 300% since 2017. Why is this happening? According to CDP, companies do not prioritise eradicating deforestation in their supply chains and do not perceive the environmental challenge as one that encompasses all nature- and climate-related risks such as climate change, water scarcity, and biodiversity loss. Companies address these risks in siloes rather than seeing them as intricately connected. Thomas Maddox, Director of Forests and Land at CDP, states that “[a]ddressing the environmental challenge requires a holistic approach: a comprehensive understanding of all the environmental impacts, dependencies and resulting risks and opportunities.” Not doing so leaves companies exposed to enormous financial risks and missing out on significant opportunities and potential gains. What can companies do? Companies can begin by implementing governance, strategies and implementation measures to weave no-deforestation into all stages of the business. This includes allocating board-level oversight and competence of forest-related issues; conducting comprehensive forest-related risk assessments including mapping of suppliers; and implementing management systems to monitor and verify compliance to their no-deforestation commitments. These actions should be grounded in stakeholder engagement with smallholders, direct suppliers, and suppliers beyond tier one. Notably, companies should ensure that they are driving projects aimed at ecosystem restoration in addition to addressing the problem - deforestation. The latter takes priority.
CDP released The Forest Transition: from Risk to Resilience - Global Forests Report 2023 (July 2023):