Forest risk commodities

A ‘forest footprint’ is the total amount of deforestation and forest degradation1 caused directly or indirectly by an organization or product.

Many businesses unknowingly source products that contribute to forest clearance in their supply chains. Their resulting forest footprint can create unexpected operational, reputational and valuation risks as well as adding to their climate change impacts.

Commodities and deforestation

Global demand for agricultural commodities is the primary driver of deforestation, as land is cleared to produce biofuels, soy, palm oil, leather and beef. Alongside timber and pulp, which can contribute to deforestation and forest degradation, these commodities are the building blocks of millions of products traded globally. These in turn are wealth generators which feature in the supply chains of countless companies across sectors.

As international pressure mounts to halt deforestation, increasing focus is falling on these primary commodities and the goods and services derived from them. This has direct implications for investors, who need to be aware of how their portfolios link to deforestation.

Deforestation and climate change

Approximately 15%2of all greenhouse gas emissions are caused by deforestation in the tropics and subtropics – equivalent to the global transport sector.

In recent years, tackling deforestation and forest degradation has risen steadily up the international climate change agenda and forms a major part of the UN climate negotiations. The issue is being championed by world leaders including Nobel Laureate Al Gore, former US president Bill Clinton, UN Secretary General Ban Ki-moon and HRH The Prince of Wales.

GCP little black book The demand for agricultural products for food, feed and fuel and the production of globally traded forest risk commodities have been responsible for driving the majority of tropical deforestation and forest degradation. The Global Canopy Programme’s Little Book of Big Deforestation Drivers analyses the supply chains and presents 24 regulatory, market and supply chain catalysts that can act to reduce deforestation caused by these commodities. The Global Canopy Programme incubated CDP’s forests program and now acts as the advisor on forests and forest risk commodities to CDP. The book is available to download in English, Bahasa Indonesia, French and Spanish at www.globalcanopy.org/LittleBookofDrivers.

1 Forest degradation is the reduction of the carbon stock in a natural forest, compared with its natural carbon carrying capacity, due to the impact of all human land-use activities.
2 van der Werf GR, et al. (2009) CO2 emissions from forest loss. Nat Geosci 2:737–738; Baccini A, et al., Estimated carbon dioxide emissions from tropical deforestation improved by carbon-density maps (2012) (2012) Nat. Clim. Change 2, 182

 
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