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Companies failing to implement deforestation commitments as 2020 deadline looms

Photo shows logs piled in Kalimantan, Indonesia

New Forest 500 assessment launched on International Forests Day

Thurs 21 March: The latest assessment of the 500 companies and financial institutions with the power to end tropical deforestation, launched on International Forests Day, finds that despite a growing number of commitments, not enough is being done by companies to put these commitments into practice [1].

Global Canopy’s assessment of the 350 most influential companies in forest-risk commodity supply chains (covering palm oil, soy, cattle, timber and pulp and paper), found that 40% of companies did not have any commitments in place to address deforestation.

Even top-scoring companies in the Forest 500 assessment – such as Unilever, Mars, Marks & Spencer and Ikea – lost points because although they have made strong commitments, they are not consistently reporting strong implementation across all of their supply chains [2].

Even though 164/350 companies assessed have set themselves a time-bound target for eliminating deforestation from their supply chains, just 50 of the 350 companies showed evidence of all of their commitments being implemented.

As a result, the 2020 deadline to eliminate deforestation from agricultural commodity supply chains – action that is crucial to tackle climate change and address the growing biodiversity crisis - will not be met [3].

Sarah Rogerson, a researcher in Global Canopy’s supply chain programme, said:

The most powerful companies in forest-risk supply chains do not appear to be implementing the commitments they have set to meet global deforestation targets. With the 2020 deadline looming, it is crucial that companies raise their ambition and address the stark gap between the promises they have made and activities on the ground.”

The Forest 500 2018 assessment finds that 57% of the 350 companies assessed this year had a commitment to address deforestation in their supply chains for at least one of the four commodities assessed (palm oil, soy, cattle and timber/pulp and paper).

Companies sourcing palm oil were once again found to be most likely to have a commitment in 2018, while just 16% of companies sourcing beef and other cattle products from tropical forest countries had a deforestation commitment in place.

Just under a third of the companies that have made commitments (29%) do not appear to be taking any action to implement those commitments.

Rogerson said:

Our global demand for commodities such as palm oil, soy, beef and paper packaging is driving forest loss, exacerbating climate change and putting biodiversity at risk. Companies have the power to stop this forest loss by engaging with suppliers and insisting that supplies are deforestation-free. While it is great to see that more than half of the companies have commitments, deforestation is increasing in some parts of the world. We need companies to implement their commitments on the ground.

The 2018 assessment ranked 350 companies on their policies, and on their implementation, with each company receiving a percentage score which was then banded to give a score out of five, with the best performing companies scoring 5/5.

The companies are then ranked by sector – manufacturers, retailers and producers – to allow comparison with their peers.

Of the top five manufacturers, just two companies attained the top score band of 5/5, with just three companies overall receiving the top score. None of the retailers assessed in 2018 attained 5/5.

Top 5 manufacturers

Nestlé S.A.                 88%  5/5

Kao Corp                    81%  5/5

Unilever Plc                73%   4/5

Mars Inc                      67%  4/5

L'Oreal S.A.                 65%  4/5

Average manufacturer 22% 2/5

 

Top 5 retailers

Marks and Spencer     63% 4/5

IKEA                            59% 3/5

News Corp                  54% 3/5

McDonald's                 51% 3/5

Pearson                      49% 3/5

Average retailer          21% 2/5

 

The 2018 assessment also ranks 150 financial institutions – selected because of their role in financing the 350 companies involved in forest-risk supply chains – and scores them for their policies on investing in companies exposed to forest-risks.

Two thirds of the financial institutions assessed in 2018 did not have any policies on deforestation, despite growing concerns that deforestation and the related climate impacts can create a financial risk.

Rogerson added:

“Financial institutions need to look at the companies in their portfolios and recognise that some of these companies are driving deforestation and could pose a financial risk. Banks and investors can minimise these risks by engaging and screening the companies in their portfolios.

ENDS

    Photo: Logging in Kalimantan, Indonesia by Dept of Foreign Affairs and Trade via flickr.com , creative commons licence

     

     

    Infographic shows pathway from no awareness of deforestation through to zero deforestation

    Contact: Helen Burley, Global Canopy Communications lead, h.burley@globalcanopy.org

    Notes:

    1. Copies of the Forest 500 annual report 2018 - the countdown to 2020 is available for download from: https://forest500.org/sites/default/files/related-documents/forest500_annualreport2018_0.pdf

    Full scores and data can be downloaded from www.forest500.org

    2. In 2014 governments, NGOs and companies endorsed the New York Declaration on Forests, with a goal to eliminate tropical deforestation from agricultural supply chains by 2020. See Goal 2,

    3. The indicators used to assess implementation by a company:

    • Does the company monitor and verify its suppliers against its own commodity commitment;
    • Does the company engage with non-compliant suppliers?
    • Does the company have a grievance mechanism so that issues in its supply chain can be raised?
    • Is the company actively involved in collaborative actions to improve sustainable commodity supply chains?
    • Is the company transparent and does it publish supplier lists or coordinates of specific sourcing regions?

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