In 2019, one football pitch of primary rainforest was cleared every 6 seconds. Old-growth forest loss is irreplaceable to biodiversity, and as the boundaries of these habitats get smaller, their ability to support wildlife, power the water cycle and store carbon are undermined.
Deforestation itself is a major contributor to the climate crisis, with primary forest loss alone equivalent to the annual emissions of 400 million cars.
To protect the world’s invaluable forests, we need greater engagement and collaboration between companies throughout supply chains, that source and produce commodities in high-risk regions.
Driving change through the supply chain
The link between customer and supplier is critical. Transparency must increase on both sides, to drive greater coordination and collaboration, to meet shared goals, and to manage risks and capitalize on opportunities.
By engaging with their suppliers, global purchasing companies can improve their awareness of environmental impacts and risks in their supply chains and incentivize action through the power of procurement. 150+ companies are currently managing their supply chains with CDP.
In 2020, 19 of these major purchasing companies, including L’Oréal, Walmart and McDonald’s leveraged CDP’s disclosure platform to request over 700 suppliers, across 53 countries, to report on their awareness and management of deforestation risk.
And supplier interest in collaborating to fight deforestation is growing.
In the last two years, suppliers have proposed a combined 300 mutually beneficial projects to their customers through CDP’s forests questionnaire. If implemented, these would help customers and suppliers fight forest loss and progress on their journey towards zero deforestation.
Between 2018 and 2019, both the number of suppliers suggesting projects (115) and number of projects proposed (163) increased, covering a range of solutions, commodities, and sectors.
Collaboration is key
Suppliers most often asked for support on certification. Almost a quarter of suppliers (21%) recognized that stringent third-party certification helps achieve sustainability standards when adopted within a broader due diligence approach.
For producer companies, certification can raise the premium price for raw materials, incentivize sustainable management practices in high-risk forest regions, and cover a range of environmental and social standards.
Most reported projects focused on timber, for example implementing Forest Stewardship Council (FSC) certification. This includes a Brazilian paper mill that asked its retail customer to explore broadening the scope of its certified chain of custody: from Brazil and Chile to Mexico, Argentina, Peru and Uruguay. Expanding the geographical scope of this approach is critical to avoiding leakage and the expansion of deforestation into other regions.
Another 20% of responding suppliers proposed projects to improve joint provision of products and services to reduce ecosystem impacts on forests, especially by suppliers producing cattle products.
Suppliers recognize that the social and economic needs of cattle producers must be addressed if they want to incentivize forest stewardship, and projects reflected this.
For example, a major slaughterhouse company requested support from three international retail customers to implement a ‘Supplier Environmental Regularization Project’ to improve management practices on the ground. The slaughterhouse expects this to “increase productivity - which avoids the opening of new areas for agricultural production”. This in turn limits deforestation, as forests are often cleared for agricultural land.
Improving traceability was reported by 16% of suppliers and was the primary focus for palm oil and soy related projects. Greater traceability can facilitate verification of supply chain actors and support companies in meeting customers’ and consumers’ expectations relating to provenance of products.
One of the largest palm oil plantation companies operating in Indonesia has requested support from its customer in expanding traceability to third party palm oil suppliers.
A challenge for 2020
Deforestation is growing at an alarming rate, and there is an urgent need to ramp up ambitious action.
The Tropical Forest Alliance has called for increased collective action and The Consumer Goods Forum has initiated a ‘Forest Positive Coalition of Action’ for which the first step is to collaborate with suppliers.
Retailers, manufactures, traders, processors and producers are being asked to support conservation and restoration while meeting the growing consumer demands for transparency and sustainability. Collaboration along the value chain is crucial to achieve this.
To support this ambition, CDP is calling on companies to take part in a new project to help drive collaborative action to protect forests. CDP’s Supply Chain Forests Member Challenge will drive purchasers and suppliers to work together, by drawing on data reported by suppliers between 2018–2020 and supporting purchasers in developing and implementing plans with their suppliers for collaborative forests projects in 2021.
Watch this space for progress on these projects in the run up to COP26 in November 2021.
In response to the global pandemic, economic recession, climate and biodiversity crisis, the need to transition to a sustainable and resilient deforestation-free future has never been greater. It’s time to work together for a ‘forest positive’ future.
Want to get involved?
If you are already a CDP supply chain member and are interested in joining the Challenge, please contact your account manager to learn more.
To take part, companies must be a CDP supply chain forests member. To become a member and take part in the challenge, visit: cdp.net/en/supply-chain