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The Money Trees: The role of corporate action in the fight against deforestation

Home > Research > Global reports > The Money Trees

Some five million hectares of forest are cleared every year - that's 15 football pitches every minute.

Yet corporate transparency and action on deforestation remains low. This not only puts corporate revenue at risk, but hinders successful action on climate change and biodiversity loss.

With 2020, a critical milestone in the fight against deforestation, fast approaching, corporate action is under increasing consumer and investor scrutiny.


The awareness gap


Despite an increased public call for action on deforestation, a large majority of major corporations still fail to be transparent about their impacts on global forest loss. In fact, 70% of the 1,500 companies asked to disclose on four forest-risk commodities (timber, palm oil, cattle and soy) in 2018, failed to do so. More than 350 of these companies consistently failed to report over the last three years.

These major brands, including Mondelez, Sports Direct and Dominos all use commodities that drive deforestation, such as palm oil in chocolates, leathers for shoes and paper for pizza boxes.

Meanwhile, of those companies that did disclose in 2018, nearly a third did not include forest-related issues in their risk assessments. With some 92% of companies that do assess such risks seeing substantial impacts, it is clear that the business and financial risks associated with deforestation are going under-reported and ignored.



The execution gap


Nearly 450 companies and more than 50 governments have pledged to end deforestation by 2020, but industry action to date has not been enough to achieve this. In fact nearly a quarter of companies have yet to take significant action on deforestation, either taking no action, or acting on only one commodity when they have others requiring attention. We define taking action as setting targets (for example, to increase traceability), using certification, engaging with supply chains, or taking part in external initiatives to achieve zero deforestation production.

Companies have a significant incentive to lead the way on deforestation. The 25% of companies that did report potential financial risks from deforestation saw some US$30.4 billion of potential losses due to its impact, primarily from reputational and market risks. Meanwhile, those that reported business opportunities valued these potential benefits at US$26.8 billion.

With the growing demand for sustainable products and with companies and governments under increasing pressure to show action ahead of the 2020 deadline, now is the time to step up efforts to protect the world's vital forests.



Download the full report now (3.2 MB)

The Money Trees
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