Targets to decouple deforestation from production won’t be met unless the global supply chains for major commodities like palm oil, soy, beef and timber get their act together.
Two new reports published this week show that food businesses are at risk of physical shortages in supply. But they also face reputational damage if their procurement policies are not up to scratch.
The New Forest 500 analysis, conducted by the Global Canopy Programme (GCP), covers the “powerbrokers” in the supply chains of the big four commodities listed above. Meanwhile, the Carbon Disclosure Project (CDP) assessed data from 187 companies concerning their deforestation risk strategies. Both reports covered producers, traders, processors and retailers, including those in foodservice.
GCP found that 57% of companies have either weak “no deforestation” policies or no policies at all. What’s more, over the last three years, the number of companies with policies for all commodities to which they are exposed has increased by just 5%.
“Despite growing momentum in the number of commitments across key supply chain actors […] many of these commitments lack the teeth to make meaningful change in the sustainability of commodity production,” said GCP head of supply chains Sarah Lake.
CDP discovered that 72% of the companies assessed are confident they will be able to access a secure and sustainable supply of commodities like palm oil in the future. However, this confidence could be “misplaced”, it warned, with just one in five firms having looked beyond the next six years.
CDP head of forests Katie McCoy warned that companies need to improve – and quickly. “Supply chains are like rows of dominoes: if unsustainable commodities enter the top of a supply chain, the effects will cascade throughout. Failing to address deforestation will have knock-on reputational impacts, manifesting themselves as consumer boycotts, community opposition, and increased regulatory scrutiny. Business growth is at risk,” she added.
Scorecards published earlier this year showed that the foodservice and hospitality sector is failing miserably when it comes sourcing sustainable palm oil and responsibly-produced soy. The scorecards showed a split between the laggards and the leaders, something the CDP and GCP also picked up on. The leaders continue to lag and laggards continue to lag, was the conclusion.
