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Illegal deforestation undercuts Forest Positive progress

© Shutterstock / BK AwanggaA man with a yellow helmet at a palm oil plantation.

Consumer Goods Forum released its Forest Positive report highlighting member action on addressing deforestation. Yet many commodities sourced through destruction of carbon rich peatlands for palm oil are finding their way into the supply chain of companies which are officially part of the Forest Positive coalition.

  • The Consumer Goods Forum releases its annual Forest Positive report communicating good progress since its inaugural report in 2021.
  •  Whilst mapping of procurement is underway and monitoring and “responding to” deforestation, highly biodiverse and carbon rich areas of Indonesia are being deforested for palm oil that goes into some of these companies’ supply chains.
  • Increasing pressure on consumer facing goods to cut ties with palm oil producers may result in a competitive positioning for such firms.

The Consumer Goods Forum (CGF)’s second annual Forest Positive annual report Driving Transformational Change throughout the Value Chain focused on the critical importance of forests in addressing the twin crises of climate and biodiversity through collective action to transform palm oil, soy, paper packaging, and beef supply chains and production landscapes.

The coalition of consumer goods retailers and manufacturers are working together to end commodity-driven deforestation as “the gravity of the situation has never been clearer.”

Forests have a key role as a carbon sink and the reports says: “reaching net zero would be impossible without tackling the deforestation challenge.” Yet while climate change may be a concern, there are also direct operational impacts to be considered. 

Members of the coalition are consumer goods companies representing $2 trillion of economic value. While deforestation action may be driven by climate concern, there are significant business risks which are increasingly salient. Changes in forest ecosystems can have significant knock-on economic effects on the supply chain.

Consumer goods coalition focused on transparency

One of the key messages in the Consumer Goods Forum deforestation report is the strengthening in the disclosure rates for the KPIs introduced in 2021 – a critical part of increasing transparency and measuring progress – and also introducing new metrics for evaluating progress across other areas of action.

As a result, all Coalition members are now collectively reporting on 62% of the total deforestation metrics, with nearly half of companies reporting on at least 75% of the KPIs across commodities. This includes a 6% increase in collective disclosure rates between 2021 and 2022 on the original set of KPIs from 2021 for the 20 returning Coalition members.

It’s worth pointing out however that the Consumer Goods Forum has not previously published Sustainable Sourcing Guidelines focused on beef and cattle-derived products. The Coalition will publish the first Implementation Guidance for the Forest Positive Beef Roadmap at some point in the future.

Rainforest Action Network finds Forest Positive coalition members linked to deforestation

The message that members of the Forest Positive coalition are driving deforestation through procurement came from the simultaneous publication of a report from the Rainforest Action Network.

The investigative report by Rainforest Action Network (RAN) exposes Consumer Goods Forum members still buying illegal palm oil from continued deforestation of the protected Leuser reserve in Sumatra

The report pointed out that: “Consumer Goods Forum members have failed to break their ties to illegal palm oil grown at the expense of carbon-rich peatlands inside the Rawa Singkil Wildlife Reserve since a similar scandal exposed by RAN in 2019.”

Fires from peatlands being cleared for palm oil production are a major contributor to climate change. In 2015 in Indonesia the Global Fire Emissions Database (GFED) reported emissions over 1 billion tonnes of CO2 from fires, more than US emissions in that year.   

Egregious deforestation to which Consumer Goods Forum members are linked runs counter to Forest Positive’s core priority, which is having a public commitment to deforestation and conversion-free (DCF) across its entire commodity businesses.

Could independent supply chain mapping stop illegal deforestation?

According to the Consumer Goods Forum, fully mapping members’ procurement practices is a critical step for the organisation. They are undertaking such a mapping of practices, at the same time they are identifying geographical areas considered particularly high risk for deforestation. 

For palm oil, the Coalition is starting to measure the percentage traceable to mills versus fresh fruit branches and the amount of recycled versus virgin wood fibre in the supply chains. Currently a lot of the debate in the group revolves around what should be considered a high-risk or a high-priority area.

Despite what may be considered more talk than action, the work of the Consumer Goods Forum is built around shifting supply chains from the top down towards sustainability goals. Their work was applauded for example by Conservation International who commended them for work being done to embed the UK Soy Manifesto within soy supply chains.

Another positive recent move was the launch of the Responsible Commodities Facility, a new system of financial incentives which will directly benefit farmers in Brazil who commit to deforestation- and conversion-free (DCF) soy cultivation

The forum stresses its commitment to transparency which some stakeholders say helps foster a sense of shared commitment and accountability across commodity sectors.

Much work remains to be done on deforestation

While there is widespread acceptance in the international community that action must be taken on deforestation, there are still many challenges to overcome.

The Consumer Goods Forum approach is a prime example – it’s great to see that companies are committing to action within their supply chains. That is only going to work however if there is a way of tracking which products are sourced from illegally deforested areas – and that such products cannot find buyers.

That requires systemic change crossing industries, borders and investment and moves beyond the supply chain and procurement to an understanding of the entire value chain. In 2021 the EU proposed legislation to ensure that illegally deforested wood would not be imported or used, but setting rules is one thing and enforcing them another.

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