CDP: Food and retail giants failing to disclose forest impacts

CDP has warned that investors will increasingly begin asking for forestry information

In its new report, entitled ‘the money trees’ and published today (16 July), CDP reveals that 70% of the 1,500 “high forest impact” corporates disclosing through its platform failed to provide information on their forest impacts and the actions they took to reduce deforestation in supply chains last year.

Disclosure through CDP requires companies to collect and report figures regarding the forest impact of their timber, palm oil, cattle and soy.

The report notes that more than 350 companies have declined to disclose this information in 2016, 2017 and 2018 alike. This group includes several large, consumer-facing corporates such as Ikea, Sports Direct, Domino’s, Next and Cadbury’s parent company Mondelez.

The document also hints at slow progress on sustainable forestry among the 306 firms that are disclosing through CDP, with almost one-quarter (24%) of these firms showing “no or limited action to reduce deforestation” by CDP standards. Moreover, a third of these companies have not yet begun working with suppliers on deforestation.

CDP additionally uses the report to highlight the short-termism of many corporate commitments on deforestation, noting that 84% of those set by companies it works with are due to expire in 2020.

The organisation’s global director of forests Morgan Gillespy is now warning big businesses that a failure to disclose forest-related data will lead to a “backlash” from key stakeholders including investors and consumers.

“For too long corporations have ignored the impacts of their supply chains on the world’s forests and have not taken seriously the risks this poses – both to their business and the world,” Gillespy said.

“Companies are already telling us that reputational risk is the top risk they see from deforestation and this is likely to become ever more prominent as sustainable consumption trends continue and the market shifts”.

Corporate response

Responding to the report, a Next spokesperson emphasised the company’s commitment to sourcing 100% of its timber from sources certified as responsible by 2025, as per its timber policy.

The spokesperson additionally highlighted Next’s positive 2019 Timber Scorecard assessment by WWF, which graded it two trees out of a possible three, and the fact that it does disclose climate information to CDP.

As for Ikea, the company’s wood supply and forestry manager Ulaf Johansson told edie: Long ago, we identified the commodities which have the biggest footprint in our supply chain and are associated with deforestation (Forestry Risk Commodities – FRC). Through this journey, we have control of the origin and have safeguarded approximately 99% of these land-based commodities.

“Responsibly managed forests is an incredibly important topic and we are always open to collaborate with, discuss and learn more from other key organisations. We are fully dedicated to securing deforestation-free commodities across our supply chain.”

Johansson additionally emphasised Ikea’s updated forestry ambitions, made under its revamped People and Planet Positive sustainability strategy. The strategy notably includes a 2020 pledge to source 100% of woods from sources certified as sustainable. 

From Mondelez, a spokesperson highlighted the fact that the company has sourced 100% of its palm oil from RSPO-certified sources since 2013 and has now set 100% targets for traceability through its Palm Oil Action Plan. As part of the plan, Mondelez has begun using satellite mapping to track forestry in its sourcing regions. 

The spokesperson additionally emphasised that Mondelez is also using the satellite technology for its cocoa supply chains and maps both its Cocoa Life farms and palm oil mills online. Moreover, the spokesperson said, Mondelez has mapped more than 93,400 of its Cocoa Life farms in Ghana, Cote d’Ivoire and Indonesia, concluding that they are “not in priority protected forest areas”. 

“As a global food company, it is vital for us to secure sustainable supplies of key raw materials; we focus on where we can make the biggest impact to reduce our end-to-end environmental impact,” the spokesperson told edie. 

“As is consistent across the industry, agricultural sourcing within our supply chain represents the largest contributor to our end-to-end carbon footprint. Our sustainable sourcing programs focus on cocoa and palm oil, where our direct purchase has the biggest risk of deforestation.

“As a business, we have continuously raised the bar for ourselves and our suppliers and there has been substantial progress in suppliers implementing sustainability policies and improving traceability. Nevertheless, there is more the industry needs to do across the supply chains of these ingredients to prevent deforestation.”

Wood from the trees

Deforestation contributes up to 15% of global greenhouse gas emissions, but research has shown that the forest and land-use sector could deliver 37% of the emissions reductions required by 2030 to halt dangerous levels of global warming.

In response to the challenge, the ‘New York Declaration on Forests’ was endorsed in 2014 by the US, the EU and multinationals from the food, paper, finance and other industries. The declaration pledges to halve the rate of deforestation by 2020 and eradicate the issue completely by 2030.

And, at the same time, companies have collectively made 760 commitments to curb forest destruction in supply chains ranging from palm oil, soy, timber, pulp and cattle, as of August 2018.

Nonetheless, CDP believes that global forest loss is continuing at a rate of five million hectares annually, or 15 football pitches every minute.

The good news is that the corporate sphere is beginning to see the financial risks of failing to act on the issue as well. A group of 76 corporates collectively reported a potential $30.4bn loss from deforestation risks to CDP – a figure which takes into account brand damage, unpreparedness for regulatory changes and physical climate risks. They additionally valued the business opportunities associated with ambitious action on forestry at $26.8bn. 

Sarah George

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