Eliminate deforestation from supply chains

Companies that source palm oil in particular must commit to clear strategies and timelines

The commitment to end the destruction of the world’s forests by 2030 made at last year’s COP26 summit in Glasgow was a pivotal moment in the battle against climate change and biodiversity loss. It is crucial we stop deforestation as it’s our woodlands and forests that provide the planet with vital breathable air and clean water.

A particular element of deforestation comes from palm oil production, which is believed to account for up to half of the deforestation in tropical rainforests. But strong demand and high yields make it an attractive crop for growers as it can be found in everything from food to soap.

The $64bn palm oil industry poses an existential threat to life on earth, yet halting and reversing its production is not a simple remedy as alternatives such as sunflower or coconut oil are likely to result in even greater environmental damage as more land would have to be cleared to produce.

Deforestation is a complex and nuanced global problem, where long-term solutions are required. The negative impacts of biodiversity loss pose a systemic risk to the global economy and we must scale up investment in the companies that help mitigate biodiversity decline.

Climate and biodiversity impacts

Companies need to go further and faster on tackling deforestation in their supply chains, as a core part of delivering on their net-zero commitments, if we’re to have any chance of fulfilling the goals of the Paris Agreement and keeping warming to a maximum of 2 degrees Celsius never mind the increasing unlikely target of 1.5 degrees.

The ranking by Global Canopy found that 72% of the 350 companies assessed did not have a deforestation commitment for all the forest-risk commodities in their supply chains. Even when companies had made commitments, the report noted that many failed to provide evidence of how they were implementing these.

Companies that source palm oil, soy, beef, leather, pulp and paper, among other relevant commodities, must commit to clear timelines for eliminating deforestation from their supply chains. This commitment should cover all commodities, regions and suppliers, including indirect suppliers.

We ask companies to communicate a clear strategy through different implementation measures for how a deforestation-free supply chain will be achieved. This includes asking companies to ensure that the components for their products are not derived from deforested areas, monitoring the risk and going beyond certification to trace commodities back to their source. Companies that can achieve traceability of commodities back to source will be best placed to achieve a deforestation-free supply chain.

Addressing the risk that communities and workers may be exploited by palm oil producers is also essential. When land is cleared for palm plantations, disputes can arise with local communities over access to resources, meaning that companies may be directly or indirectly responsible for human rights violations. It can be difficult to resolve legacy issues related to the absence of free, prior and informed consent in older plantations, so it is important to also have a process to address land conflict.

It is further important to carry out human rights due diligence on labour practices and working conditions in these plantations to ensure that employees earn a living wage, there is good health and safety on site, and no modern slavery or child labour exists anywhere in the supply chain.

Globally, sustaining efforts to halt and reverse deforestation will be critical over the next few years. This requires extensive collaboration between the different actors involved and political will.