Agricultural commodities are responsible for 70% of tropical forest loss worldwide. Over half of the world’s most influential companies with operations in forest-risk commodities – including palm oil, soy, beef, and pulp and paper – have made a commitment to address deforestation in their supply chains. The Tropical Forest Alliance 2020 commissioned us to prepare two papers seeking to forge a better understanding of the impacts of corporate commitments to date, as well as what is needed to shape future efforts to eliminate deforestation from commodity supply chains.
Progress on Corporate Commitments and their Implementation finds that:
- The majority of the most influential companies in forest-risk commodities have made commitments. However, important actors have yet to join the movement to ensure that collective pledges are achieved and leakage of deforestation to areas not covered by a commitment is avoided.
- Companies’ adoption of new commitments has slowed, perhaps due to the looming 2020 deadline acting as a disincentive. Companies with existing commitments are also reluctant to take on new ones as they struggle to implement existing pledges.
- There is progress in implementation of commitments. However, the effectiveness of relying on individual company pledges to tackle commodity-driven deforestation is limited as existing commitments leave large areas out, often those where smallholder farmers operate. Even where the coverage is regional – as in the case of moratoria – the risk of leakage remains high, particularly where alternative farming areas are readily available and unprotected.
- Governmental support for supply chain efforts is growing but is not yet evident at scale.
Impacts of Supply Chain Commitments on the Forest Frontier finds that commitments are having an impact, largely through encouraging more transparency and accountability among large trading groups in the middle of supply chains. They have also led to better management of agricultural areas, and better awareness of the links between commodities and deforestation. However, both company commitments and government efforts have not been able to stop deforestation in forest areas not covered by a commitment or policy due to the limited scope of these efforts.
