Deforestation-free supply chains: 4 trends to watch

Aerial Photography – The River

Hundreds of companies have committed to eliminating deforestation from their supply chains by 2020, but the political landscape and market conditions are shifting as the deadline draws nearer. Here are four emerging trends that these companies – as well as the governments and civil society organizations engaging with them to zero out deforestation – should be taking into consideration as 2020 fast approaches.

1. Western companies can’t solve deforestation on their own.

One significantly subscribed-to theory of change for deforestation-free supply chains was that if enough companies set goals and purchase deforestation-free commodities, we will see reductions in deforestation globally. But so far, even with more than 350 companies setting forest-related goals, we are not seeing this transformational change. This is primarily because emerging economies play an increasingly important role in commodity markets. U.S. and European companies do not have enough market leverage to have a widespread impact.

Take beef, for example. Beef accounts for more deforestation annually than all of soy, palm oil, and pulp and paper combined. Western consumers actually eat very little of it. Most beef is consumed domestically in countries like Brazil, while the rest goes to countries where deforestation isn’t a major factor in consumers’ purchasing decisions, like Russia and countries in the Middle East.

Chris Meyer, Senior Manager, Amazon Forest Policy, EDF

Similarly, markets for palm oil, another major driver of deforestation, tend to prioritize price over environmental impact. This is particularly true in China, India and the domestic markets of Indonesia and Malaysia.

Clearly then, a deforestation-free strategy needs to involve non-Western markets and address those supply chains.

2. New approaches that focus on local context and solving governance challenges are gaining traction among supplier companies.

Three new approaches that focus on local context and solving governance challenges are gaining traction among supplier companies. These three initiatives follow what is known as the jurisdictional approach because they focus on engaging actors from the government, private sector, farmer groups, and civil society. With the jurisdictional approach, the private sector works with governments to reduce deforestation and improve productivity in an entire region.

  • Mato Grosso, Brazil’s Produce, Conserve, and Include (PCI) strategy. PCI is one of the pioneering pilots of the jurisdictional approach, and is gaining momentum after finalizing an investment plan and a $54 million commitment to the provincial governments for REDD+. This multi-stakeholder platform aims to work with producer companies to increase production of agriculture and livestock while reducing deforestation, increasing reforestation, and incorporating smallholders and indigenous peoples in low-emission rural development. The PCI is tackling thorny commodities such as the state’s beef and soy production.
  • Olam’s Living Landscape policy. Few upstream plantation companies have agreed to change their plantation development and purchasing strategies, but Olam just did. Their new strategy focuses on collaborating with multiple stakeholders in landscapes and making a holistic positive impact – not just mitigating negative impacts.
  • The World Cocoa Foundation’s Forest and Climate Initiative. As part of this initiative, private sector actors up and down the cocoa supply chain are collaborating through an association to work with the governments of Ghana and Ivory Coast to reduce deforestation in the production of cocoa. This exciting collaborative model allows companies to engage alongside peers and with governments, and has potential which will be watched closely.

3. Certifications are limited in their ability to solve commodity-linked deforestation on a broad scale.

Global certification processes can help companies take short- and medium-term steps toward reducing deforestation in their supply chains. However, corporate leadership on forests needs to incorporate approaches that help resolve the problem on a broader scale and for the long term.

A better approach is a broader process such as the Responsible Sourcing Palm Oil (RSPO) certification system that is now being implemented in a number of jurisdictions. The RSPO helps its members think more broadly about indirect impacts and other supply chain actors – such as government agencies – in places where palm oil is grown and being developed.

4. More complex approaches that include governments are necessary in most contexts and for medium- and long-term success.

Because deforestation is a complex, multi-layered challenge, solving deforestation necessitates a complex approach – one that involves players from the crops and industries causing deforestation, as well as local and national political processes. Inherent in such a complex approach is the need to define complex concepts, including the term “deforestation” itself, and what is “legal” at the state, provincial, and/or national level.

TFA 2020 General Assembly and making progress

The Tropical Forest Alliance (TFA) 2020 initiative is a platform focused on enhancing partnerships between government, private sector, and civil society organizations to eliminate deforestation. Parties at TFA’s upcoming General Assembly will tackle how to achieve the goal of zero net deforestation by 2020 from key commodities, like beef, soy and palm oil.

EDF will promote jurisdictional approaches, including Mato Grosso’s Produce, Conserve, and Include strategy, during a side event geared at increasing the engagement of corporate actors with government, farmers and civil society.

Reducing deforestation remains a significant challenge and becoming more urgent – deforestation rates remain high and have a direct impact on global warming. It will take the actors involved in deforestation to come together to find a solution that works for everyone, and for the planet. Promising solutions, like the jurisdictional approach, are emerging and showing signs that it can be done.

This blog was originally published on EDF Talks Global Climate.