Just in time for Earth Day, McDonald’s has released a new global deforestation commitment. While this policy is new, the company is no stranger to the issue. In fact, McDonald’s was one of the first companies to be confronted in the 1980s as consumers began to recognize the “Hamburger Connection” between beef production and tropical forests. In response, the company established its Amazon Policy, which prohibited the sourcing of beef from the Amazon. Seventeen years later, McDonald’s was instrumental in creating the Soy Moratorium, an industry-wide effort which has effectively halted soy expansion on native vegetation in the Amazon Biome. (Soy is a major source of feed for chickens and other livestock).
Now, following a wave of commitments from agricultural giants such as Cargill and ADM, the new global policy is a first-of-its-kind in the fast food sector and, if executed correctly, could stand as a shining example for other companies in the food business to follow. As one of the world’s most recognized brands, McDonald’s knows any commitment with such a large impact on the planet – tropical forests are one of the largest contributors to, and buffers against, climate change – will be heavily scrutinized. So, what do we need to know as we watch this journey unfold? To radically simplify, four things come to mind:
This post is our second in a series on how companies can reduce deforestation from their supply chains. Read the first post here.
What do companies, governments, civil society organizations and indigenous peoples have in common? Despite their differences, they share a common interest in reducing deforestation, which accounts for 12% of greenhouse gas emissions worldwide.
On September 23rd, leaders from all of these groups will meet at the UN Climate Summit in New York City to spark action on climate change issues including deforestation. The Climate Summit hopes to rally action around two forest efforts, creating incentives to reduce deforestation in tropical countries through REDD+ policies (Reducing Emissions from Deforestation and forest Degradation) and eliminating deforestation from the supply chains of commodities such as palm, beef, soy and paper.
The Board of the Consumer Goods Forum (CGF)—a group of 400 companies with combined sales of around $3.5 trillion—has committed to help achieve zero net deforestation by 2020. However, CGF has also recognized that they cannot solve deforestation on their own, and have called on governments to make REDD+ a priority in a legally binding UN climate agreement in 2015.
At EDF, we believe that REDD+ is the best way to reduce deforestation and promote sustainable economic development and that consumer goods companies are in a prime position to support REDD+ in the countries they source from.
Deforestation can pose significant operational and reputational risks to companies, and we at EDF are seeing companies start to take action in their supply chains. Deforestation accounts for an estimated 12% of overall GHG emissions worldwide–as much global warming pollution to the atmosphere as all the cars and trucks in the world. In addition, deforestation wipes out biodiversity and ravages the livelihoods of people who live in and depend on the forest for survival.
Tropical deforestation in Mato Grosso do Sul, Pantanal, Brazil (Source: BMJ via Shutterstock)
Unfortunately, it’s a hugely complex issue to address. Agricultural commodities like beef, soy, palm oil, paper and pulp—ingredients used in a wide variety of consumer products—drive over 85% of global deforestation. Companies struggle to understand both their role in deforestation, and how to operationalize changes that will have substantive impacts.
When the drivers of deforestation are buried deep in the supply chain, innovative and collaborative solutions are required. In the past several years, we have seen many in this space make big commitments toward solving the problem, but gaining transparency into tracking against these commitments has been almost as difficult as gaining transparency into the supply chains themselves. For many companies, the hope for making good on their promises may come in the form of powerful partnerships.
Nestle. Unilever. Walmart. Kellogg’s. Colgate-Palmolive. What do these companies have in common? They’re just a few of the global companies that have committed publicly over the last few years to work towards ridding their supply chains of raw agricultural commodities that directly cause deforestation.
Global deforestation is responsible for roughly 12 percent of world-wide greenhouse gas (GHG) emissions (IPCC)—more than double those generated by the entire U.S. electricity sector (EIA). In addition, deforestation is the greatest driver of biodiversity loss in the world, displaces indigenous populations and can drive major regional changes in weather patterns. Agricultural production drives 85 percent of global deforestation (Union of Concerned Scientists).
You may be thinking, “Why should that concern my company? We aren’t in a sector tied to agriculture or buy, sell or use commodities from countries engaged in deforestation.” That may be true if you only consider your company’s direct operations. If your company, however, produces or sells personal care or food products, or uses paper packaging, chances are high that deforestation causing commodities like soy, palm oil, timber, cattle, or derivative products of them are part of your supply chain.