Cutting deforestation: A business imperative

With a number of rainforest conservation pledges being made at the recent climate talks in Lima, Aida Greenbury from Asia Pulp & Paper believes businesses must act on these commitments to end deforestation.

The Indonesian President, Joko Widodo’s recent statement about the importance of protecting peatland is a sign that political attitudes towards more responsible land management are changing.

Similarly, the recent Carbon Disclosure Project (CDP) report into deforestation is to be welcomed. Deforestation-free supply chains: From commitments to action acknowledges that some parts of the supply chain are moving faster than others and calls on businesses to act on their commitments to end deforestation. The good news is that commitments on ending deforestation recognise the scale of the issue, the challenge is that supply chains are not moving fast enough. Businesses need to act now, not in 2020 or 2030, to ensure that their supply chain is engaged and moving in the right direction.

As an indication of how much there is still to be done to tackle deforestation, the CDP found that almost two thirds of reporting companies are currently unable to trace the origin of commodities within their supply chains such as timber, palm oil, soy, bio fuel or cattle. This lack of supply chain traceability represents an unacceptable business risk, and should serve as a wakeup call to businesses everywhere.

The CDP outlines in the report the steps businesses can take to end deforestation within their supply chain. This process starts with making a commitment, before moving to risk assessments, identifying targets, implementation and finally displaying leadership. According to the CDP, companies are using a range of methods to approach implementation, but success stems in most cases from using a blend of certification, supply chain engagement, capacity building and traceability. Traceability is the key in my view, as it’s at the heart of understanding exactly what is going on within a business’ supply chain. I discussed these issues at the recent Asia-Pacific Rainforest Summit in Sydney as there is clearly a real interest from the business community in practical examples of businesses that have managed to successfully decouple commerce from deforestation.

Landscape approach

The CDP cite the example of Marfrig Global Foods, which utilises satellite data provided by the INPE (Brazil’s National Institute of Spatial Research) and the Brazilian Environmental Agency’s blacklist to remotely monitor its 7,000 suppliers in the Amazon region, delisting those found to be engaging in new deforestation or encroachment into indigenous lands. At the same time, the business builds capacity through its Marfrig Club Program to try and align social, environmental and animal welfare issues, engage ranchers in Marfrig’s commitments and reward suppliers for good practice.

At Asia Pulp & Paper (APP), we have been implementing a policy of zero deforestation by our suppliers since the start of 2013. Like Marfrig, we use satellite imaging in the management of our supplier concession areas, but that satellite imaging needs to be verified on the ground to ensure we achieve the required level of accuracy.

We have also been building knowledge within our supply chain, ensuring that all our suppliers understand the workings of the High Conservation Value (HCV) and High Carbon Stock (HCS) approaches and the principles of Free, Prior and Informed Consent that are central to our zero deforestation commitment. We have also committed to protect forested peatlands and to manage peat according to best-practice. All of these commitments will then be implemented using the landscape approach.

Financial reward

We need the support and commitment of our suppliers to make our policies effective. Therefore we’ve worked to make sure that our suppliers understand that zero deforestation will bring economic reward, as an increasing number of businesses place zero deforestation requirements at the heart of sourcing policies. Recognising this relationship between business change and business reward is key to making implementation work on the ground.

Economic reward, then, can play a role in ensuring the protection of forests. This is a similar approach, albeit on a different scale, as used by the European Union with its Voluntary Partnership Agreement (VPA) with Indonesia. If Indonesian products can be shown to meet a certain standard, then they will receive easier access to the markets of the European Union. In just three years, the VPA process has had a remarkably positive impact on Indonesia’s forestry sector.

Businesses have a vital role to play in the management of the world’s forests. If every supply chain were to prioritise deforestation-free products, there would eventually be no market for clearing forest. We share the CDP’s view that whilst there are certainly challenges ahead in getting other businesses to move from commitments to action, there are opportunities too. Businesses have the opportunity to build stronger supply chains, increase yields, enhance their brand reputations through educating consumers and mitigate the impact of climate change by putting a permanent end to commodity-driven deforestation.

Aida Greenbury is the managing director of sustainability at Asia Pulp & Paper.

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