Nineteen major companies, including L’Oréal, Kellogg’s and Danone, adopted zero deforestation policies in 2014. But will they be able to prevent the slaughter of plants and animals within our rainforests, saving tomorrow’s medicines and carbon sinks? Part one of a SALT special report. By Giles Crosse
Duration : 3 min to read
Few areas of corporate behaviour are more divisive than rainforest destruction. Business involvement in this ugly practice stems from harvesting profitable products and ingredients. In cultivating and sourcing them, century-old Amazonian and Indonesian trees are burned, or ripped down.
Such commodities yield profit. But the latest analysis finds that three quarters of companies admit they yield many dangers too. The new data on this complex area of CSR comes from Carbon Disclosure Project (CDP), an international organization helping companies to measure environmental performance. CDP is influential. It works with 800 institutional investors leveraging assets of US$92 trillion, pushing for better CSR. It holds the world’s largest dataset on climate change and forest risk commodities.
CDP’s latest report, ‘Deforestation-free supply chains: From commitments to action,’ paints a complex picture of corporate involvement. It focuses on four critical agricultural commodities; beef, palm oil, paper/pulp and soy. The report says the major drivers of global deforestation stem from these four. They feature in the supply chains of countless companies, ending up in food, fuel and other everyday products. Demand for them is growing; CDP expects global cropland used to produce them to expand by 42% by 2050. Destroying rainforest to meet such demands can’t be done without incurring business and environmental costs. When trees are lost, climate change accelerates. Future medicines burn and fragile species perish.
Against this backdrop, corporates are realizing the profit from commodities like soy must be measured against the costs and risks involved. They must choose how to balance the money-making imperative against reputational risk. They must weigh up shareholder demand against the Earth’s future.
Deforestation is increasing
Despite years of NGO campaigning, corporates are killing the planet’s trees. Had deforestation rates in the Brazilian Amazon remained at 2005 levels, an extra 3.2 billion metric tons of carbon dioxide would have entered the atmosphere by now. The rates fell; Brazil made progress in curbing deforestation. But now they are rising once more.
Another concerning region is South East Asia. In 2014, Indonesia’s woodland destruction surpassed that of Brazil. Today, more businesses recognize and openly discuss rainforest protection. Some implement highly publicized policy to help. But numbers never lie. Despite all the rhetoric in the world, if deforestation is rising, then corporate words are toothless.
Why is corporate policy struggling?
Not every business is to blame for the situation. CDP says an “unprecedented number of companies have set strong deforestation targets over the last year”. It references Wilmar International, which committed to zero deforestation. Wilmar works in oil palm cultivation.
The financial community, too, is interested. Storebrand, one of Norway’s largest insurance and pension savings companies, divested from 11 palm oil companies due to perceived sustainability risks in 2014. The problem is that commitments on paper do not always correspond to saving trees. In total, 19 multinationals adopted zero-deforestation policies between January and September in 2014. Taken together, they mean the share of palm oil-specific zero deforestation commitments has grown from 0 to 60% in the last year.
But Cargill, a corporate with a notoriously poor record on the environment, extended its pledges to cover commodities beyond just palm oil. Its move illustrates a key point. Rainforest will still be destroyed unless all commodities involved in cutting down or damaging trees are included in every pledge, simultaneously.
Forests are symbiotic ecosystems, requiring symbiotic measures. Trees protect other trees from infection and insects. Complex balances of light and shade exist. Cutting down one species adjoining others can still cause widespread damage. So even though policy can protect palm oil-specific destruction, in the end overall deforestation may continue unabated for reasons unaddressed.
Protective target setting and implementation is more advanced on palm oil than for other commodities. There are, says CDP, “concerning inconsistencies” and “varying levels of performance by companies”. And of course, commitments are only meaningful if they are acted upon.
There are wider concerns over whether corporate action is just a response to NGO pressure, or a truly proactive stance. Meaningful action on commodity-linked deforestation has to be taken by companies at every stage of the supply chain. This means retailers and manufacturers need to catch up with producers and traders on zero deforestation commitments. Just as only targeting one commodity fails, so all the sectors that impact on rainforests must act together.
CDP on making a corporate commitment to deforestation-free supply chain
1) There is an urgent business imperative for these commitments to be translated into action.
2) Despite the considerable momentum, corporate commitments on deforestation have seen over the last year, our data shows a number of inconsistencies concerning corporate action on this journey, both across commodities and supply chains.
3) Businesses can realize opportunities from partaking in the journey.
In Part Two of this special report, SALT interviews Katie McCoy, head of forests program at CDP.