Drivers of Change: How Effective are Corporate Supply-Chain Commitments?

Drivers of Change: How Effective are Corporate Supply-Chain Commitments?

Climate Focus, on behalf of the Meridian Institute, conducted a study to identify major drivers or incentives that lead producers to change management and production practices to more sustainable operations. The project encompassed cattle and soy in Latin America. 

While hundreds of companies have pledged to remove deforestation from agricultural supply chains over the last decade, little information is available on the transformational impact of these commitments. Available studies tend to focus on assessing the number and nature of commitments.

This study is a first step in addressing this gap and seeks to shed light on the farmer incentives to change practices to more sustainable operations as well as the link of such changes to forest-related corporate commitments. The assessment focused on the beef and soy sectors in Brazil and the beef and dairy sectors in Colombia. 

Overall, we found that: 

  • Commitments in the beef sector refer to general pledges to end deforestation and improve traceability, while commitments in the soy sector focus on specific approaches towards implementation such as certification and moratoria. 
     
  • Where specific implementation tools are explicitly mentioned as part of a commitment, such as certification and moratoria in the soy sector, commitments are more likely to be passed on to the producer level to achieve the desired effect. 
     
  • The Brazilian soy sector is more integrated, and financial and technical capacity barriers are less pronounced than in the beef sector which enhances the ability of companies to translate commitments into results at the producer level.
     
  • In the beef sector, the majority of commitments have been made by upstream companies (e.g. manufacturers and retailers) in Brazil, while slaughterhouses mostly rely on sectoral agreements to address deforestation. Many companies limit their commitment or sourcing criteria to the last farm before slaughtering. The scope of these commitments fails to capture deforestation in earlier stages of production (e.g. breeding) where it is most rampant. 
     
  • None of the cattle related commitments made by multinational companies specifically refer to Colombia, which may be due to a lesser exposure of the Colombian cattle and dairy sector to international markets and - until recently - lesser NGO pressure and general awareness of the link between commodities and deforestation in Colombia compared to Brazil. 
     
  • A lack of agreed definitions and reporting formats constraints limit the ability to comprehensively assess progress in implementing and impact of corporate commitments. Moving forward, civil society initiatives such as the Accountability Framework will play an important role in providing harmonized definitions and tools to implement and monitor corporate commitments, but collaboration will be needed to ensure that the elements of the Framework are adapted to local circumstances and adoption is brought to scale.
     

This project is supported on the ground in Brazil by Imaflora.

 

Release Date

May 2019

Authors

Franziska Haupt
Executive Director Berlin
Simon König
Executive Director North America
Ingrid Schulte
Land Use Consultant
Charlotte Streck
Co-founder and Director