Stopping deforestation is crucial to halting climate change. And big business is playing a big part.
Forests soak up CO2 in the atmosphere and are critical for keeping the global average temperature rise below two degrees. At the moment, deforestation accounts for around 18% of the world's CO2 emissions. If deforestation carries on unchecked, not only will it exacerbate climate change, we also risk losing some of the richest ecosystems in the world.
Around half of all deforestation is linked to just four commodity chains – palm oil, paper and pulp, soy, and beef.
Over half of these commodities are controlled by a handful of large companies. If they all work together to change how they do things – not just in their own supply chains, but through the market as a whole – they can have a huge impact on reducing deforestation.
So, what’s in it for them?
Managing risk. Deforestation risks security of supply for vital commodities. A clamp-down on illegal deforestation or sudden policy change could prove disastrous for companies if they aren’t prepared.
New opportunities. Commiting to deforestation-free supply chains can create opportunities to source and develop new commodities. Marks and Spencer, for example, use Tencel, a new fabric made from sustainable forests.
Protecting reputations. In a world of increasingly sustainability-savvy consumers, failing to take action on deforestation can seriously damage a company’s brand. On the other hand, tackling deforestation helps support the rights of indigenous people, make sure forests are properly valued (illegal logging means lost taxes and logging fees), protect watersheds and conserve biodiversity – all of which can improve a company’s reputation.
Eliminating deforestation is a cost-effective way to manage supply chains and slow down climate change.
Cost effectiveness. Every tonne of CO2 saved as a result of reduced deforestation from slash and burn agriculture delivers an economic benefit of around US$10.
WHAT COMPANIES CAN DO
It all depends on what kind of company they are and where they are in the supply chain. But, for example:
- Many companies and most major supply chain deforestation initiatives are aiming for zero deforestation in their supply chains for commodities like soy, palm oil, leather, beef, timber, pulp, coffee and cocoa.
- Some companies are using standards and certification processes through organisations like the Forest Stewardship Council and the Roundtable on Sustainable Palm Oil. Although, at the moment, not all the standards are demanding enough, companies and NGOs are working together to make them better.
- When companies are working on a large scale with specific, high-risk commodities, they often work directly with suppliers. That way they can make sure the commodities they buy are traceable and comply with sustainability standards. Working with suppliers this way can be complex. But there are lots of good examples of companies doing it well (like M&S and Unilever, who both have comprehensive supplier management systems). New technology is also helping: Global Forest Watch Commodities, for example, gives companies a set of online tools which use real-time data to show the impact of commodity production on forests.
MAKING A COMMITMENT
- Over 400 companies, representing over US$3 trillion in revenue, have pledged to eliminate deforestation from their business operations as part of the Consumer Goods Forum.
- And 17 companies, including Diageo, Nestle and L’Oréal, have signed up to a ‘We Mean Business’ commitment to remove commodity-driven deforestation from all their supply chains by 2020.
- By making such public commitments, these companies are setting the agenda for producing commodities sustainably. And blazing the way to a low-carbon economy.
THREE COMPANIES DOING THEIR BIT FOR THE WORLD'S FORESTS
- Marks and Spencer have committed to sourcing all their palm oil, soy, coffee, cocoa, leather and beef from locations that don’t contribute to deforestation by 2015. They’ve also signed up to the Fashion Loved by Forests campaign to make sure their fabric sourcing doesn’t lead to deforestation (at the moment, fabrics like rayon and viscose come from forests).
- Unilever has committed to reach zero net deforestation by 2020. In 2012 they reached their target of 100% palm oil from sustainable sources via GreenPalm certification. Now they’re aiming for 100% of their palm oil to come from traceable, certified sources by 2020.
- Commerzbank will only finance deals connected to palm oil if it’s certified by the Roundtable on Sustainable Palm Oil. And they’ll insist on knowing about the supplier’s sustainability goals and criteria.
- In the past few decades, the world's forests – two thirds of which are managed by humans – have absorbed nearly a third of the CO2 released each year into the atmosphere by fossil fuels.
- Deforestation currently accounts for around 18% of the world's CO2 emissions.
- The world lost 2.3 million square kilometres (230 million hectares) of tree cover from 2000 to 2012. That’s 50 soccer fields every minute of every day for 12 years.