The global environmental NGO is expanding its work to leverage the power of procurement to drive companies towards creating deforestation-free supply chains.
30 November, 2016: Following a grant of US$3.7 million (NOK 30 million) for the period 2016-2020 from the Norwegian Agency for Development Cooperation (NORAD), CDP will seek to catalyze action on ending deforestation in commodity supply chains from Latin America to China and Europe.
The grant will help establish a supply chain platform that brings together high-impact purchasing companies with the producers and traders of forest-risk commodities from Latin America. The overall aim of the grant is to drive the corporate transition towards deforestation-free supply chains in Latin America.
Together with project partners Global Canopy Programme, Fundación Natura Colombia, and Sociedad Peruana de Ecodesarollo, CDP will establish a program of collaboration in Latin America, and advocacy in China, which will bridge private sector action and public sector policy goals.
The grant follows Norway’s ambitious commitment this year to make its public procurement policy deforestation-free. Many companies have made similar high-profile promises in recent years, which CDP has highlighted in its latest global forests report. Norway is however believed to be the first and only country to have made such a commitment.
The clearance of forests for agriculture is a major driver of deforestation worldwide. In Latin America, demand for forest-risk commodities, which includes soy used in animal feed and cattle products, is driving two-thirds of deforestation. The continued rise in global population and changing dietary preferences towards a meat-based diet are expected to further fuel demand for these commodities, creating further pressure on the region’s forests.
Sourcing forest-risk commodities such as soy or palm oil therefore carries inherent business risks for large purchasing companies. Forest risk commodities end up in a wide array of products that global retailers and manufacturers rely on to generate significant revenue. However corporate sourcing and procurement practices are coming under growing consumer, investor and regulatory scrutiny because of the link with deforestation. There is increasing pressure on companies therefore to ensure that their supply chains are deforestation-free.
CDP’s chief executive officer Paul Simpson says: “We are delighted to be able to expand our work on leveraging the power of procurement as part of the NORAD community.
Ending deforestation will be fundamental to global efforts to prevent dangerous climate change. We need to engage the most powerful levers of change in working towards this goal, which includes companies at every stage of the value chain for forest-risk commodities.”
The key outcomes CDP and its partners aim to achieve by 2020 are that:
- High impact purchasing organizations have adopted and are implementing policies (including engaging their suppliers) that reduce the pressure on forests in Latin America.
- Suppliers of the high impact purchasing companies are actively measuring, monitoring and managing deforestation risk and reporting progress to their customers annually.
- Small and medium enterprises in the supply chains of high impact purchasing companies have the capacity to be able to meet their customers’ requirements for deforestation-free commodities.
CDP’s global supply chain program works with 89 purchasing organizations with a combined annual spend of over US$2.7 trillion, to motivate companies to disclose their impacts on the environment and natural resources and take action to reduce them. The non-profit is working towards recruiting high-impact purchasing companies to join over the next year, with the aim of driving supplier disclosure on efforts to tackle deforestation for the 2017-2018 CDP reporting cycle.
Find out more
For more information about the program, including how your company can become a member, please contact [email protected]
CDP, formerly Carbon Disclosure Project, is an international, not-for-profit organization providing the global system for companies, cities, states and regions to measure, disclose, manage and share vital information on their environmental performance. CDP, voted number one climate research provider by investors, works with 827 institutional investors with assets of US$100 trillion and 89 purchasing organizations with a combined annual spend of over US$2.7 trillion, to motivate companies to disclose their impacts on the environment and natural resources and take action to reduce them. CDP is a founding member of the We Mean Business coalition. Please visit www.cdp.net/ or follow us @CDP.