Every day, we see another article about forests disappearing in the Amazon. This coverage shines light on a significant global problem that is only intensifying. With all the bad news, I was especially energized to attend the Tropical Forest Alliance 2020 (TFA 2020) Annual Meeting last week, where around 200 passionate people gathered to promote a forest positive future.
Amidst rising deforestation rates, many companies have committed to eliminating deforestation from key commodity supply chains. As of June 2018, 473 companies globally committed to curbing deforestation in supply chains linked to palm oil, soy, timber and pulp, and cattle.
Many of these companies have set 2020 goals, and are doubling down efforts to meet these goals as the deadline fast approaches. Companies now find themselves in a position in which they know where they want to go, but do not always know how to get there.
Identifying deforestation risks in supply chains by using monitoring and traceability tools is one key step to achieving corporate goals related to fighting deforestation. Being able to monitor full supply chains, from the production of raw materials to retail or consumption, will enable companies to locate and address deforestation risks. Read more
On the evening of Sunday, October 28th, Brazilian citizens solidified the decision that Jair Bolsonaro will be the country’s next president. Often called “tropical Trump,” Bolsonaro’s stated agenda has massive implications: during his campaign, he promised to withdraw from the Paris Agreement, shut down the Ministry of Environment and open up the protected indigenous lands to mining and industrial agriculture. In the week before the election, he walked back on some of these statements, but the overall sentiment doesn’t bode well for our climate—or for your company.
As someone whose professional goal is to promote forests as a valuable part of the climate solution, I am incredibly disheartened by this news. But I also know that when policymakers cut back, companies can be a powerful force for environmental protection.
So if mitigating forest loss is part of your company’s sustainability goals, here’s what you need to know. Read more
At Environmental Defense Fund, we believe that environmental progress and economic growth can and must go hand in hand. EDF+Business works with leading companies and investors to raise the bar for corporate sustainability leadership by setting ambitious, science-based goals; collaborating for scale across industries and global supply chains; publicly supporting smart environmental safeguards; and, accelerating environmental innovation.
This is the 10th in a series of interviews exploring trends in sustainability leadership as part of our effort to pave the way to a thriving economy and a healthy environment.
Let’s turn back the clock to 1990. It was a milestone year for McDonald’s, as the company opened its first restaurants in Moscow, mainland China and Chile. It was also when the largest restaurant company in the world joined forces with Environmental Defense Fund to launch a groundbreaking partnership that would find ways to reduce McDonald’s solid waste. The results? $6 million in savings, more than 300 million pounds of packaging eliminated, and 1 million tons of corrugated boxes recycled.
2018 is shaping up to be a big year for McDonald’s too, with a packaging waste goal set in January and an announcement to reduce emissions across its supply chain in March. Led by Executive Vice President and Chief Supply Chain and Sustainability Officer Francesca DeBiase, McDonald’s has raised the corporate leadership bar with these ambitious sustainability targets. But now, the difficult and complex work of meeting these goals begins.
I caught up with Francesca ahead of the Global Climate Action Summit this week to ask her about what the roadmap to meeting these goals looks like, and how they’ll collaborate with their suppliers and the industry to prioritize action on the areas where McDonald’s has the biggest opportunity to reduce greenhouse gas emissions, including responsible beef production
Here’s an edited transcript of our conversation.
Walmart and Unilever made big news at this week’s Global Climate Action Summit. With forest loss still on the rise (the highest levels of tropical tree cover loss occurred in the last two years), these two consumer-product giants just committed to taking big, concrete steps toward addressing the complex reality of global deforestation.
At the center of their commitments are critical actions in support of jurisdictional approaches, which encourage companies that source deforestation-related agricultural commodities to collaborate with local governments, communities, and producers in their sourcing region. Through these collaborations, jurisdictional approaches ensure that local laws, regional efforts, and corporate policies work in concert to reduce deforestation across entire landscapes.
Companies with forest goals coming due – and there are hundreds of them – should take note, for three big reasons:
Over the last 15 years, an impressive number of companies have set ambitious forest targets in their supply chains. As of September 2017, more than 470 companies in the food and agriculture sector have pledged to eliminate deforestation from their supply chains. The Consumer Goods Forum – a group of 400 global companies with over $3.1 trillion in assets – for example, pledged to achieve zero net deforestation by 2020.
I spend my days thinking about how companies can use their market power to improve our environment and health. Companies are motivated to lead on sustainability for a number of reasons including cost savings, risk management and improved reputation. Additionally, the stakeholders companies most want to impress are their customers and shareholders, which studies show care deeply when it comes to sustainability. In fact, in a 2017 Morgan Stanley survey, 75 percent of investors said they are interested in sustainable investing and 71 percent believe companies with leading sustainability practices may be better long-term investments. Given this, companies are increasingly talking about their sustainability efforts.
An example of such a company is Walmart, who recently hosted its annual shareholder meetings in the form of a formal business meeting and an event for associates and shareholders. As a sustainability professional, I was pleased to see both meetings highlight sustainability as a key strategy for Walmart moving forward.
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.
Supply Chains: vital to tackling deforestation…
Leadership within corporate sustainability continues to reach new heights as companies innovate to catalyze more progress. Early sustainability efforts focused on philanthropy. Next, companies embraced the business value of engaging in operational efficiency, such as efficient use of water or energy.
The current wave? Supply chain engagement: realizing that the bulk of their environmental impact comes from outside their operational walls, leading companies are reaching back across the chain to suppliers and producers to drive improvements.
Companies and non-profit partners still have a lot of work to do to determine how to adequately engage in continuous improvement across a supply chain and measure performance in a transparent way. But even if they solve this puzzle, it isn’t sufficient to tackle our biggest, hairiest environmental problems—like deforestation.
In the deforestation space, direct supply chain engagement is vital to manage corporate risks and catalyze improvements. But any company that attempts long-term supply chain engagement on their own typically creates a situation in which individual farms are reducing forest loss, but the landscape around them is still filled with rapid deforestation. Imagine “islands of green” in a sea of deforestation.
…but what’s the next step?
But, on this Agriculture Day, we want to recognize and celebrate the farmers and ranchers while acknowledging the fact that we all play a part in the growing of food. In just a few decades, there will be two billion more people to feed on the planet. As a global community our challenge is to feed this growing population sustainably without depleting the soil, polluting our water and worsening global warming.
The statistics are eye opening. Globally, agriculture and forestry account for:
- 33% of the world’s GHG emissions
- 70% of the world’s water consumption
- Around 75% of tree cover loss
- 50% of global top soil loss
What’s behind these huge numbers? When we look deeper, the problem looks different depending upon which side of the equator you’re on. From row crops to rainforests, here’s a snapshot of what’s happening, both in terms of the problem and the solution:
When we think about how we will feed an additional 2 billion people, improving yields will be critical to meet demand. Fertilizer is an essential nutrient that will help to increase the yields we need. But with less than half of nutrients applied each season being actually absorbed by crops, the unused fertilizer is bad for the planet:
- US food production accounts for 75% of nitrous oxide emissions and has contributed to the pollution of nearly 40% of US drinking water supply;
- Excess fertilizer and pollution is washing off of farm fields and into water ways degrading coastal ecosystems and causing algae blooms.
At the same time, this also hurts farmers financially. Fertilizer represents their single biggest input cost, so when nearly $420 million in fertilizer washes off Midwestern farm fields and into the Gulf of Mexico every year, it’s tough to remain profitable.
[Tweet “Eating food has hidden costs: the power of partnership in reducing the impact of our food supply chains”]
EDF’s work* with Walmart, Smithfield Foods, Campbell’s Soup, Land O’ Lakes and other food companies is proving that efficient fertilizer use reduces supply chain emissions and saves money. It just needs to happen more: when food companies, retailers, and other supply chain actors send the demand for scientifically based and economically viable strategies for using fertilizer more efficiently, sustainable practices will expand and far less impact will be placed on the environment.
Agriculture and Deforestation
Agriculture is the largest single cause of deforestation. Everyday forest lands in Brazil and other tropical countries are burned down to grow crops or to create cattle pastures for beef production. The exploitation of the tropical forests for the big four agricultural commodities, palm oil, beef, soy, and pulp and paper, contributes significantly to climate change.
Tropical forest loss accounts for about 15% of global carbon emissions annually. Hundreds of major consumer goods companies have committed to eliminating deforestation from their supply chains.
The challenge is twofold: how to increase agricultural production in these tropical regions to support the livelihoods of local communities and growing global consumer needs, while fulfilling companies’ zero-deforestation commitments to reduce carbon emissions?
The solution lies in multi-stakeholder engagement. Brazil’s experience shows that collaboration between companies, government agencies and local communities within a region can successfully reduce deforestation while maintaining robust growth in production. The country successfully reduced Amazon deforestation by about 75% from 2005 to 2013.
When executed properly, these jurisdictional approaches provide win-win-win opportunities. Companies have a new way to meet zero deforestation commitments in supply chains by sourcing from lower risk areas and reduce the risk that deforestation will spread to other suppliers. Governments have additional support to improve policies and productivity in their regions. Farmers have the needed incentives and assistance to increase sustainability and profitability on their lands.
Partnership is the key
So it’s clear: our food has costs beyond our wallets, in the form of greenhouse gases, water quality, water scarcity, biodiversity, and other important impacts that we don’t see each day when we sit down at the table.
But the good news is, there’s a lot of movement—or potential for movement— across the food supply chains, from retailers to growers to consumers, to promote sustainable practices on a multitude of food and agriculture issues.
To tackle these costs, everyone along the food chain needs to realize that there is no free lunch (pun very much intended):
- At EDF, we are working in collaboration with farmers, companies, governments, and other NGOs to address these issues and reduce the impact of our food supply chains.
- Companies (including: food companies, retailers and other supply chain actors) need to consistently send the demand signal to farmers that they want less deforestation and more efficient fertilizer use.
- Consumers play an important role by sending our own demand signal for more sustainably produced food by thanking the companies leading the way in sustainability through shopping power.
So today take a moment think about where our food is comes from, and the hard work and energy that went into its approaches to feed people and protect our planet.
* EDF takes no money from our corporate partners—we are funded solely through grants, donations and membership.