A report by CDP has found corporate transparency on deforestation lags behind other environmental issues despite deforestation being the second largest source of anthropogenic greenhouse gas emissions on the planet.
CDP global director of forests Morgan Gillespy said: “The silence is deafening when it comes to the corporate response to deforestation. 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."
CDP is the not-for-profit that runs the global disclosure system that helps companies, cities, states and regions manage and measure their environmental impact. Its report, The Money Trees: The role of corporate action in the fight against deforestation, said: “It is clear that the business and financial risks associated with deforestation are going under-reported and ignored”. The overall rate of commodity-driven deforestation has not declined since 2001, it said.
Nearly 450 companies and more than 50 governments have pledged to end deforestation by 2020, but industry action to date has not been enough to achieve this, the report found. It said nearly a quarter of companies have yet to take significant action on deforestation, either taking no action, or acting on only one commodity when they have others requiring attention.
Of those that responded, more than a third are yet to start working with suppliers to reduce deforestation. “This is a critical gap as deforestation is almost always a supply chain issue, unless the company is a direct producer,” the report found.
CDP said the majority of companies (86 per cent) with 2020 deforestation commitments had no control over land. Only 16 per cent of those that control land have similar targets, it found. “By taking a holistic approach and working with suppliers to build capacity upstream of the deforestation risk companies can achieve sustainable sourcing.”
The report found companies report a potential US$30.4 billion in losses due to the impacts of deforestation risks, such as brand damage, regulatory change and physical impacts like forest fires and crop failures.
In 2018, 1500 companies that have high impact on forests were asked to disclose on four forest-risk commodities (timber, palm oil, cattle and soy). Seventy per cent failed to do so, and more than 350 of them had consistently failed to report over the last three years.
Australian companies in that list included Woolworths Group, Graincorp, Dominos Pizza Enterprises. Other major food and beverage companies that failed to report included Mondelez International Inc, Kerry Group, Hormel Foods and Lion Corporation. CDP said Mondelez’s palm oil supplier Rimbunan Hijau Group, the largest palm oil company in the rainforest region of Sarawak, Malaysia, also failed to report.
The 306 companies that did disclose forest data, reported on their sourcing of timber, palm oil, cattle and/or soy and the actions taken to reduce deforestation in their supply chains. But nearly a third did not include forest-related issues in their risk assessments, CDP said.
Gillespy said: “Businesses that want to maintain market share need to listen to the calls from their customers, investors and consumers – or they could face a backlash.
“Companies are already telling us 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.”
