Growth in deforestation commitments hides transparency issues

By David Burrows

- Last updated on GMT

Photo: iStock/mihtiander
Photo: iStock/mihtiander

Related tags Supply chain management Carbon dioxide

The number of manufacturers using one of the four key commodities linked to deforestation has increased from 67% to 71%, but a worrying number of targets have been missed or forgotten, according to a new report.

Analysts at Supply Change identified 718 companies that are “exposed”​ to the big four commodities – that is, firms that produce, procure or use palm oil, soy, cattle and timber as part of their core business. The team then assessed any pledges relating to deforestation and those commodities, as well as reporting and progress against targets.

In all, 447 of the 718 firms made commitments to curb deforestation, which percentage-wise is around the same as a year ago (366 out of 566 firms). Breaking down the figures across the supply chain, manufacturers led the way – 71% had commitments in place, compared to just 30% of retailers, 21% of processors and 17% of producers. Just 12% of traders had commitments in place.

Total commitments to reduce deforestation have increased from 579 to 760, whilst 57% more of the pledges made amongst a ‘control group’ (347 companies that have been tracked for the past 12 months) are accompanied with transparent reporting.

Overall, the findings paint a “brighter picture”,​ the authors noted, with more companies making commitments and more companies reporting on them. Progress information is also now available for just over 50% of the commitments – way up on the 36% in 2016’s report.

Wake up sleepy head

"Corporate commitments to deforestation-free supply chains continue to gain momentum as stakeholders demand more sustainable businesses and products,”​ said Supply Change’s senior advisor Stephen Donofrio. However, he added, “we’re learning that meeting these goals is easier said than done”​.

Indeed, a third of the 447 companies have at least one “dormant”​ commitment, for which the target date has passed, was never set or has not been tracked. Firms need to be more transparent, Donofrio said, disclosing their progress to “ensure the goals don’t fall into neglect”.

Research by Forest Declaration​, published back in November, also warned that whilst pledges to curb deforestation had doubled in a year, many were “piecemeal”​ and focused on a single commodity – palm oil. 

Supply Change also found commitments heavily weighted towards palm oil (and paper) thanks largely to well-established schemes like the Roundtable on Sustainable Palm Oil. These initiatives have also driven the increase in progress reporting, the analysts suggested. But non-certification-based commitments also had a “notable 37% growth in reporting”.

Well done Danone​ 

The 59% growth in progress reporting on zero deforestation (ZD) commitments is “especially noteworthy”​, given that there is not yet a universal system of metrics for reporting against them, “…generating a quantitative progress report for ZD requires some innovation on the part of the company”,the authors explained​, citing the example of French food manufacturer Danone and its 2014 ZD palm oil commitment.

Many others are struggling to track performance in relation to deforestation, as Ignacio Gavilan, director of sustainability at the Consumer Goods Forum explained. He used the example of the 2010 CGF target to achieve zero net deforestation by 2020: an important goal to aim for but for which there is “no agreed-upon assessment methodology to measure it. This doesn’t necessarily mean that companies are not doing something, but it does raise the question of what they are doing,” ​Gavilan added.

The report marks the fourth annual review carried about by Supply Change. Looking back at previous results, experts picked up that 10 additional procurement policies have also begun to appear more frequently. Biodiversity and wildlife protection is the most popular (37% of tracked commitments), followed by greenhouse gas emission reductions (35%), improved water management (29%) and reducing pesticides and toxins (26%).

“These policies represent a company’s awareness of the impact commodity production is having on the ground,”​ the authors noted.

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