By Alisha Staggs, Project Manager, Corporate Partnerships, and Ben Young, Intern, Corporate Partnerships
Increasingly, major companies are seeing forest protection as a key component of their global strategy. However, many companies have yet to identify the concrete action steps to fulfill these goals.
Why not? Most likely because the agricultural landscape is complicated.
Major food retailers illustrate perfectly the complexities of the modern agricultural supply chain. These international corporations are tasked with managing a complex supply web of beef, coffee, soy, and other products that spans continents. Increasingly, the environmental impacts of these commodities cannot be viewed in isolation.
In Brazil, for instance, research suggests that increased demand for soy has pushed cattle ranching onto less productive land within the Amazon. While the cattle ranchers may be directly responsible for deforestation, the ultimate driver is the soy demand. On top of that, production of palm oil, another priority product for many consumer goods companies, is expected to more than double in the Amazon biome over the next decade.
So— how can a company ensure they are sourcing sustainable commodities without destroying the rainforest in the process?
A Solution: Zero Deforestation Zones
For illustrative purposes, let’s imagine a company, Eat-a-Lot Inc. that serves high quality beef and other food products via restaurants and other retail outlets. Consider two paths that our company might take for its beef supply in Brazil (while the US has prohibited the import of fresh and frozen Brazilian beef historically, just last month the USDA updated its rules to allow Brazilian beef into the United States),:
In scenario A, Eat-a-Lot dutifully works to engage their supplying farmers to make sure that cattle are not being raised on recently deforested land in the state of Mato Grosso. Though the beef supply chain is complex, Eat-a-Lot is able to identify a handful of properties that were illegally deforested within the past 12 months, and subsequently bans beef purchases originating from those properties. Case closed, problem solved, Eat-a-Lot is off the hook.
But not so fast. What happens to that beef if it’s not purchased by Eat-a-Lot? It will likely end up being shipped to Russia or China or maybe even other restaurants or grocery stores in the United States, Brazil’s top destinations for beef exports, by an international company less concerned with sustainability. As the sustainability manager for one of the dominant beef processor explains, “We monitor more than 8,000 suppliers, but we’ve cut 2,000 of them off because they don’t meet our criteria. So, we eliminated 2,000 ranches, but they’re all, as far as I know, still in business — because someone else has stepped up to buy from them.”
Though the three major beef processors in Brazil (JBS, Marfrig, and Minerva) have made strides in tracking their cattle, together they represent less than 40% of the market. The end result is that, until we reach a critical mass of corporate commitments across a variety of crops and products, commodity-driven deforestation will continue.
Now consider scenario B: Eat-a-Lot maintains their deforestation commitment, but also works with the governors of the largest agricultural states of the Amazon, Mato Grosso and Pará, and EDF’s Brazilian partners, Imazon and IPAM, to develop a “Zero Deforestation Zone”. Recent analysis reveals the details behind this solution: Eat-a-Lot , suppliers, NGOs, and the government will collectively declare and enforce a state-wide ban on deforestation, while also promoting agricultural productivity enhancements to reduce the economic pressure on deforestation.
Under the Zero Deforestation Zone system, both international and domestic competitors must follow the same set of rules. No longer can illicit suppliers avoid the costs of deforestation compliance or benefit from illegal deforestation activities within Mato Grosso and Pará. On top of that, Eat-a-Lot benefits from a more productive, reliable, and legal supply-shed (à la watershed).
Collaboration is the Key
Does this completely eliminate the risks of deforestation in Mato Grosso? Likely not; some illicit producers may still slip through the cracks occasionally. But by taking proactive measures, in collaboration with multiple partners, Eat-a-Lot can become a positive force in the region.
We’ve seen a near 80% reduction in Amazon deforestation since its peak in 2005. Yet deforestation rates have stalled at roughly 5,000 km2, an area greater than the size of Rhode Island, each year. Making further progress in the region, then, will depend on companies and other stakeholders taking proactive steps to increase productivity on existing land to avoid further forest conversion.
- New Report Supports Jurisdictional Approaches to Ending Deforestation in the Amazon
- Why Unsustainable Agriculture is a Business Risk
- Powerful Business: The Lever for Change Across the Supply Chain