How business can tackle deforestation, some conclusions from our recent London event
At our recent conference on 21st-22nd November, in London, we focused on the themes of “Implement policy, meet targets and manage supply chain/procurement risk”.
We’ve distilled and combined the key comments, along with some podcasts recorded at the event and other content from Innovation Forum that you might find useful. The notes below are unattributed.
These are just a sample of the final notes that in full, are for attendees only. But I think you might find them helpful.
Our next event on this topic will be in DC in April, see: http://innovation-forum.co.uk/deforestation-us-2017.php
Here’s some key themes from our recent London event:
Emerging deforestation risks and strategies
- COP 21 article 5 is significant for forests. The 2018 COP will be a major review event for progress on COP 21.
- There is a big emerging focus on avoided deforestation, reforestation and carbon and soil capture.
- There is a major recognition that the progressive consensus will prevail despite short- to medium-term political challenges.
- For example, the Marrakech palm oil declaration – that prioritises sustainable palm oil development in Africa – involves state and non state actors and focuses on land use as a critical element.
Click here to listen to an Innovation Forum webinar on high carbon stock and how business can use this to tackle deforestation risks. Sime Darby’s Simon Lord, Greenpeace’s Grant Rosoman and P&G’s Kuan-Chun Lee discuss the work of the high carbon stock convergence working group to bring together the progress from the two previous HCSA and HCS+ approaches. They discuss how trust has been rebuilt, with a common set of objectives taking the best of the two approaches and debate how these can be used by companies to improve their anti-deforestation policies.
Developing effective corporate policies
- Risk modelling can be an effective method for establishing where wood fibre is coming from and where the supply chain risks are. Companies should also have rigorous due diligence systems in place to help understand supply chain traceability.
- Lack of scale in terms of the availability of certified fibre remains a major problem.
- Even for companies that recognise they have significant risks, tackling deforestation is a very complex matter. Translating no-deforestation commitments into actions isn’t easy.
- Successful companies focus where they can make the greatest change. But they don’t wait for consumer demand to drive change – consumers are concerned but expect business to act.
Click here for a podcast with Jonathan Horrell, sustainability director, Mondelez, discussing: palm oil supply chain progress and cross-sector collaboration around traceability; the pros and cons of the Roundtable on Sustainable Palm Oil and how he believes it can still be a tool for transformation; what an impact approach means for companies, how it can help push positive change and who internally should be pushing for the change.
Trends in regulation
- The ability for EU buyers to import timber from Indonesia that is compliant with EU rules on illegal timber (the EU Timber Regulation and FLEGT – Forest Law Enforcement, Governance and Trade) is a big step forward. But it took 10 years work to get the right governance systems in place.
- Developing local programmes to help suppliers achieve compliance and better practices does require careful thought and, inevitably, investment – particularly in high risk countries.
- While data and its analysis can be a game-changer in terms of supply chain transparency, we must be careful not to drown in spreadsheets and data. Performance on the ground is key.
- Commodity traders need to be brought further into the debate. They care far more about brand sourcing than reputation.
- Companies can help create change in governments. The example of the minimum wage in Myanmar is a good example of collective progressive lobbying.
Working with smallholders effectively
- For many forest commodities, a key solution to reducing smallholder deforestation risks is to engage them on increasing productivity.
- Yields can be doubled or tripled in many cases through:
- focus on soil fertility
- replanting and replenishment of redundant (tree) stock
- access to better seeds
- Lack of access to finance remains a major concern. Providing loans for periods where repayments are realistic is key – new palm plants typically take five years to be productive so why expect repayment of a loan to buy them earlier?
- Companies can guarantee their own loans by guaranteeing to buy the resulting crop.
Forest commodity supply risks
- Traceability is a tool to achieve more sustainable supply chains and deforestation commitments, however it is not synonymous with sustainability. Must go beyond this and leverage strong relationships where they exist and build new and strong relationships with suppliers where they don’t currently exist. Once this is done, then ongoing engagement, training and guidance via workshops is important so as to enable suppliers to achieve sustainable commodity goals.
- Similarly, certification is a tool but not the outcome. There is a role for a continuous improvement mechanism.
- Theories of change that work are: a company can leverage its purchasing power when and where possible; and, also staying engaged with high deforestation regions and engaged with noncompliant suppliers to support the transition to more sustainable landscapes and production activities.
Click here for a podcast with Fiona Wheatley, Marks & Spencer sustainable development manager. She discusses her work collaborating to improve global viscose supply chains, identifying the supply chain pinch point where working with a few big players can make impact at scale. She also talks about the importance of brand trust, and what consumers assume their favourite brands are doing on deforestation; how traceability can also help companies achieve greatest impact even in complex supply chains (including palm oil); and, how to impress on suppliers the importance of their taking ownership of the performance of their own supply chains, and why this is an are where peer collaboration can really help.
The traceability and transparency debate
- Simplified, traceability is about knowing actors in the supply chain whereas transparency is about knowing what they are doing. That being said, these definitions and associated principles to follow are not standardized within a company, and even less so across sectors, supply chains and commodities.
- There is a need to look at traceability and transparency from a sectoral perspective and work collaboratively throughout the value chain, and with peer retailer companies to achieve T&T goals.
- The easier you make traceability, the more options you have but if it is a very diverse supply chain then there are more challenges.
- Retailers have complex businesses in that there are bits of commodities in the products they sell, and in the majority of cases retailers do not actually buy the commodity themselves. Its in the ingredients of the products that they sell.
Click here to listen to an Innovation Forum webinar on how to accelerate implementation of zero deforestation commitments. Translating commitments into actual practice on the ground – in palm oil, soy, timber and pulp and paper, and cattle products supply chains – is a highly complex matter. Collaboration is increasingly regarded as the only practical route to progress – involving business, the NGO community, financial institutions and government. And everyone can do more to push the pace of commitment implementation.
Debating what companies and their stakeholders can do are:
- Tom Bregman, project manager, Forest 500, Global Canopy Programme
- Jillian Gladstone, senior manager, forests, CDP
- Sylvain Augoyard, corporate social responsibility, BNP Paribas
- Samuel Mary, senior sustainability research analyst, Kepler Cheuvreux
- Fiona Wheatley, sustainable development manager, Marks and Spencer
More on all we do, and plan to do next year, can be found at: http://innovation-forum.co.uk