The world’s forests contain more carbon than the available oil, gas, and coal deposits. The role of healthy forests is critical to avoiding climate change.
But land use change and specifically deforestation, is often overlooked in the climate conversation.
Rising deforestation and the risks to business – the importance of accounting for land use change emissions
In 2017, it is estimated that the world lost 16 million hectares of forests, the equivalent to the entire land mass of Bangladesh.
That’s the second highest deforestation rate recorded since the monitoring began in 2001.
Without urgent action to tackle deforestation and other types of land use change, a below 2⁰C world will be out of our grasp. Tackling this issue could deliver up to 30% of the emissions reductions needed to meet the Paris Climate Agreement.
Current deforestation rates are not only a risk to life on Earth, but also represent a substantial threat to businesses. According to a recent CDP report, US$941 billion of turnover in publicly listed companies depends on commodities linked to deforestation, including soy, palm oil, cattle and timber.
The same report found that 87% of the companies disclosing to CDP identified risks from deforestation.
With demand for agricultural commodities projected to rise, natural resources are going to come under increased pressure. This would put even more burden on the remaining forests, and therefore, increase emissions even further.
It is projected that, without action, about 300 million hectares of tropical forest will be lost by 2050. That’s an area close to the size of India.
Such a loss would result in close to 170 gigatons of carbon dioxide being released ̶ five times more than global fossil fuel emissions in 2017.
This would significantly reduce the chance of keeping global average temperatures to well-below 2⁰C.
The challenges of measuring land use change emissions in corporate supply chains
For many companies sourcing agricultural commodities, the majority of their land use change emissions lie outside their direct operations, these indirect emissions are known as Scope 3 emissions.
There is increasing recognition amongst companies of the need to tackle these indirect emissions.
Measuring emissions from land use change in the supply chain can be challenging. There are several different calculation methods as well as data constraints in corporate supply chains.
Without clear standards, methodologies and tools, companies are unable to report accurate emissions figures and take meaningful action to reduce them.
This in turn leaves investors in the dark, unable to fully understand the climate-related impacts of land use change on their investments.
How to tackle this issue?
CDP is working, in collaboration with sustainability consulting group Quantis, to further develop its reporting framework so companies can more easily report on emissions from land use change within their supply chains.
More specifically, CDP will pilot a few questions with companies and investors on emissions from land use change.
By enabling companies to account for and report on their efforts to halt emissions from land use change in their supply chain, we hope to raise awareness on this issue and to support companies to take meaningful action. This will provide investors with a more complete picture of their forests and climate-related risks.
In mid-October, CDP will be engaging with key companies and investors from relevant sectors to consult on the pilot questions for reporting emissions from land use change. We will also be hosting a webinar on the topic on the 25th October.
CDP aims to build on the results of this pilot and on the feedback received to improve its reporting framework and, therefore, drive better and comprehensive disclosure on this topic in the future.
If you would like to attend the webinar or receive information on this specific project, please contact [email protected]