World’s Forests at the Mercy of Commodity Supply Chains

Road divides forest and agricultural landscapes near Rio Branco, Acre, Brazil, Feb. 2013. (Photo by Kate Evans / Center for International Forestry Research, CIFOR)


OXFORD, UK, February 11, 2015 (ENS) – Only a small minority of the power brokers controlling the global commodity supply chains that drive the world’s tropical deforestation are able to meet demand without destroying forests, finds the first ranking of these powerful players.

“Over the last decade, commodity production driven by global demand for food, feed and fuel products has been responsible for over 50 percent of deforestation and 60 percent of forest degradation in tropical and sutropical regions,” according to Global Canopy Programme, the UK charity that issued the ranking.

Road divides forest and agricultural fields near Rio Branco, Acre, Brazil, Feb. 2013. (Photo by Kate Evans / Center for International Forestry Research, CIFOR)

Now, a movement is afoot to cut tropical deforestation in half by 2020 and end it by 2030.

The Global Canopy Programme identified, assessed and ranked 250 companies, with total annual revenues in excess of US$4.5 trillion, 150 investors and lenders, 50 countries and regions, and 50 other influential actors in this space.

Together, these 500 entities – the Forest 500 – control the complex global supply chains of key “forest risk commodities” such as soya, palm oil, beef, leather, timber, pulp and paper.

With an annual trade value of more than US$100 billion, these commodities are found in over half of all packaged products on the world’s supermarket shelves.

Published in January, the ranking is based on a rigorous methodology and draws on over 40,000 data points from public and private sources, according to the Global Canopy Programme, a tropical forest think tank and UK charity.

Assessed against dozens of policy indicators, only seven of the Forest 500 scored the maximum number of points – companies Groupe Danone (France), Kao Corp. (Japan), Nestle S.A. (Switzerland), Procter & Gamble (USA) and Reckitt Benckiser Group (UK), Unilever (UK) and banking and financial services giant HSBC (UK).

At the other end of the scale, with zero points, are 30 companies, many based in Asia and the Middle East, and numerous investors.

The Forest 500 project was funded with UK aid from the UK government and the project’s goals are endorsed by civil society organizations, including Greenpeace, the National Wildlife Federation and CDP, formerly Carbon Disclosure Project, an international, nonprofit providing a global system for companies and cities to measure, disclose, manage and share environmental information.

Deforestation and land use change cause more than 10 percent of global greenhouse gas emissions, undermine regional water security, and threaten the livelihoods of at least one billion people worldwide,

“We are currently all part of a global deforestation economy. Deforestation is in our chocolate and our toothpaste, our animal feed and our textbooks, our buildings and our furniture, our investments and our pensions,” said Mario Rautner, The Global Canopy Programme’s Drivers of Deforestation Programme Manager.

“Our goal with the Forest 500 is to provide precise and actionable information to measure the progress of society to achieve zero deforestation,” said Rautner. “Together, these 500 countries, companies and investors have the power to clean up global supply chains and virtually put an end to tropical deforestation.”

At the UN Climate Summit last September, representatives from business, governments, indigenous communities and civil society signed the New York Declaration on Forests. It spells out ambitious commitments to cut deforestation in half by 2020 and end it by 2030.

A similar pledge to achieve net zero deforestation by 2020 has been made by the Consumer Goods Forum, a global association of companies and service providers, including major manufacturers and retailers.

The Forest 500 illustrates the progress made by the Consumer Goods Forum, whose members achieve an average score that is 80 percent higher compared to companies that are not part of the initiative.

Rautner said, “Though the Forest 500 findings highlight that much work needs to be done, the good news is that a number of big players across sectors are demonstrating the leadership that is needed. Putting policies in place is just the necessary first step in addressing tropical deforestation and their implementation will be critical in order to transition to deforestation free supply chains by 2020.”

The countries included in the Forest 500 represent nearly 90 percent of the world’s tropical forests and almost 90 percent of the tropical deforestation over the last decade. Yet few countries have yet developed zero or net zero deforestation goals that accord with the goals of the New York Declaration on Forests.

Latin American countries, including Colombia, Brazil and Peru, ranked highest.

Lower scoring countries include Madagascar, in part due to its high forest loss between 2000 and 2012, and Nigeria, for its relatively low forest policy and governance scores.

The most developed forest policies in commodity importing countries, such as those in the Netherlands and Germany, tend to be commodity specific and industry led, rather than government initiated.

Crucial importing countries such as China, which is responsible for importing over 22 percent of the value of all forest risk commodities, and India, a key importer and consumer of palm oil, achieved low scores.

As a group, the 250 companies are falling short of adopting policies that ensure a speedy transition to a zero deforestation economy by 2020, but individual actors are making good progress.

The consumer-facing home care, and cosmetics and personal care industries are shown to perform best, whilst the animal feed industry lags behind other sectors.

Companies with higher revenues scored better than those with lower revenues. Once companies surpass annual revenues of US$10 billion, policy scores increase sharply, averaging nearly double that of companies below the $10 billion threshold.

Publicly-listed companies score more than 50 percent higher than privately-owned companies and those with other governance structures.

The location of company headquarters is found to be a key differentiator with the best scoring companies headquartered in North America, slightly outperforming those in Europe and Latin America, while companies in the Asia-Pacific region lag behind.

Companies in some of the most critical forest risk commodity importing countries, such as China and India, score well below the average, with Russian companies at the bottom of the table.

Sovereign wealth funds and hedge funds scored very low for their sustainable investment policies, while banks achieved higher scores.

Investors headquartered in Europe tend to have more developed sustainable investment policies than those headquartered in North America and the Asia-Pacific region, the assessment shows.

Copyright Environment News Service (ENS) 2015. All rights reserved.


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