<big>Catalyzing Collective Action <br>
Tropical countries lost over 11.1 million hectares of tree cover in 2021. One third of this – an area the size of the Netherlands – occurred in primary rainforest. The resulting carbon emissions from this forest loss amount to double the emissions of all the cars in the United States. It is vital for us to reverse deforestation within this decade if we are to stand any chance of keeping the 1.5°C dream alive. I believe that this is still possible though the window of opportunity is closing fast – we need everyone from smallholders to agribusinesses, civil society to national governments to get on board and do their part. The high-pressure of expectation around COP26 last November led to some ambitious blue-sky commitments on ending deforestation. Thirteen of the world’s largest agricultural commodity companies, engaged in soy, palm oil, cocoa and cattle, committed to halting forest loss and managing supply chains consistent with a 1.5°C pathway. Over 30 financial institutions, with more than $8.7 trillion of assets under management, committed to eliminate agricultural commodity-driven deforestation from their portfolios by 2025. And the leaders of 141 countries – including Brazil, the Democratic Republic of Congo (DRC) and Indonesia–signed up to a declaration committing them to halt and reverse forest loss and land degradation by 2030. But beyond Glasgow, the storm clouds of COVID-19, the Ukrainian conflict, and climate extremes are threatening to derail these commitments and transitions. War in Ukraine has sent food prices spiralling to record levels since 60 years ago. Droughts from Canada to Kenya have slashed crop yields. A “seismic hunger crisis” could drive 47 million people in 81 countries to the edge of famine. Unfortunately, this may not be just a passing storm – research by the Tropical Forest Alliance (TFA) shows that global food consumption is increasing at more than twice the rate of human population growth. As the food crisis deepens – and the value of products such as palm oil rises – there is a serious risk that companies and countries alike could backslide on forest protection measures and clear more trees for industrial farming. To keep any hope of staying with the 1.5°C warming limit, we cannot allow this to happen.
The causes of deforestation are complex and deeply intertwined with the need to create more sustainable land use practices, more resilient supply chains for food and timber globally, and the need for rural development and dignified livelihoods. These issues can only be addressed through systemic change that engages a wide range of partners across value chains that straddle geographies and markets. This publication showcases examples where collective efforts are gaining momentum and making a positive difference, with TFA working alongside producer and consumer governments, farmers and agribusinesses, financial institutions and civil society.
Since the 1950s, the Brazilian Amazon has lost 19% of its tree cover – perilously close to the tipping point of 20-25% beyond which, scientists warn, the rainforest could rapidly transform into savanna. The consequences of this, in terms of lost biodiversity, carbon release and changing weather systems is unimaginable. Cattle ranching alone is responsible for over 90% of this deforestation as it’s cheaper for farmers to buy virgin forest, cut down the trees and raise cattle than to invest in keeping existing ranch land productive. But creative financial products could break this vicious cycle of production by destruction.
The TFA and its partners are spearheading a new initiative called Innovative Finance for the Amazon, Cerrado and Chaco (IFACC) which aims to provide South American farmers the money they need to improve the productivity of their beef and soy farming, without having to resort to clearing virgin forests and ecosystems. The initiative has already raised $4 billion in commitments and aims to reach $10 billion by 2025. As well as helping producers, it’s a growth opportunity for investors looking to meet their targets for net-zero emissions and forest-friendly portfolios.
The Intergovernmental Panel on Climate Change (IPCC) estimates that 23% of total anthropogenic greenhouse gas emissions (2007-2016) come from agriculture, forestry and other land uses. About 11% of overall emissions are from forestry and other land use, mostly deforestation.
As part of its Green Deal, in November last year, the European Commission published what it called “the most ambitious legislative measure ever put forward by any country anywhere in the world to curb deforestation and forest degradation”. The new Deforestation Regulation – which has yet to be ratified by the EU Parliament and Member States – will provide a guarantee to consumers that any beef, palm oil, soy, wood, cocoa or coffee products they buy in the EU do not contribute to global deforestation or forest degradation. Producers will be required to provide the geographic coordinates of the land on which they produce their commodities, allowing traceability by satellite to guarantee they are deforestation-free. While this regulation has a laudable aim, it risks putting all the responsibilities on producers and may push them to export to markets with less onerous requirements, without addressing the root causes. So the TFA convened a series of roundtable discussions among companies and NGOs, which resulted in a call for the EU to consider a “smart mix” of measures to tackle the negative impacts of forest-risk commodities. These measures, supported by over 50 companies from TFA’s platform, include creating more market demand for sustainable products, requiring due diligence by companies in commodity supply chains and steering financial flows towards sustainable commodities. Most important of all, TFA has called on the EU to create “producer partnerships” with producer countries, to improve governance and law enforcement, as well as to create an enabling environment by providing SMEs and farmers with more support, services and infrastructure.
The most ambitious legislative measure ever put forward by any country anywhere in the world to curb deforestation and forest degradation.
Competition on the supermarket shelves is good for business, but if we stand any chance of tackling commodity-driven deforestation, companies have to work together to unlock progress at the scale needed. The Consumer Goods Forum’s Forest Positive Coalition of Action, comprised of 21 global retailers and manufacturers with a combined market value of more than US$1.8 trillion, is taking collective action to remove deforestation, forest degradation and conversion from key commodity supply chains. The TFA is a strategic partner to the Coalition, helping the group set the highest bar for corporate leadership and action to drive sector transformation. The Coalition is leading the way for corporate engagement at landscape scale and increasing transparency by regularly reporting on progress against a set of KPIs.
Several other collaboration platforms, like the Action for Sustainable Derivatives, the Soft Commodities Forum, and the Palm Oil Collaboration Group and OP2B are spaces where companies can work together to advance progress on supply chains, landscape engagement and increased transparency.
The COP26 announcement by the agri-commodity traders is another significant opportunity for the private sector to work together to advance progress.
COP26 showed the world the clear linkage between deforestation and climate change. And we know that no solution to deforestation is possible without making food systems – responsible for a third of greenhouse gas emissions – less destructive and more sustainable. We must break the cycle of forest degradation, rising temperatures and falling productivity driven by unsustainable food and commodity systems. In Davos, in May this year, leaders from governments, business and the private sector met to make further progress on these issues.
I believe the critical years remaining in this decade are full of hope. There is unprecedented interest among governments, subnational jurisdictions, companies and financial institutions in embracing net-zero commitments and seeking returns from products and services with high environmental, social and governance (ESG) integrity. Meanwhile, the prospect of deforestation regulations and stricter ESG reporting draws ever closer. The businesses that adapt before this legislation comes into place will be far advanced compared to their peers, and likely to see significant returns on their investments, further incentive for why changing now is essential. Now is the moment for all players implicated in commodity-driven deforestation to raise their ambitions and ensure that, by COP27 in Egypt later this year, they are firmly headed on a 1.5°C pathway. The TFA, in partnership with the World Economic Forum, stands ready to catalyse the collective action – with supply-side and demand-side governments, private sector, NGOs and civil society – needed to make this ambition a reality.