Business awareness of deforestation-related challenges has dramatically increased over the past years, as demonstrated by the growing number of business commitments to reducing deforestation impacts in their commodity supply chains. A recent report by Supply Change highlights that the number of companies that made deforestation related commitments grew by 22% in 2016 alone, with a total of 447 companies and 760 commitments.
This increase is partly triggered by creation of platforms, initiatives and alliances that drive this change from the demand-side. In 2010, The Consumer Goods Forum (CGF) resolution to achieve zero net deforestation by 2020 in key commodity sectors (soy, palm oil, paper & pulp/timber and beef), has played a key role in galvanizing business commitments to zero deforestation amongst CGF member companies and beyond. More recently, on 16 March 2017, thetwelve largest global chocolate and cocoa companies committed to working together, pre-competitively, to end deforestation and forest degradation in the cocoa supply chain, an initiative which was convened and supported by the World Cocoa Foundation (WCF), The Prince’s International Sustainability Unit (ISU) and IDH (the Sustainable Trade Initiative).
Diverse initiatives and platforms have thus driven company adoption of commitments and policies to address deforestation in their supply chains. However, as they were adopting these commitments, companies have realized that they couldn’t reach them through certification-based approaches only. Certification often stops at the farm gate, does not consider landscape-level pressure factors that lead to deforestation, and do not include all stakeholders needed (especially government) to tackle the issue.
Landscape approaches aim to address that issue. Based on multi-stakeholder coalitions, they consist in the adoption of a landscape or jurisdictional lens, to address the interconnections between social, environmental and economic factors that lead to land use change.
Implementation through compacts
How should these approaches be implemented so that they lead to more sustainable landscapes? IDH is aiming to respond to that question through the development of Production, Protection and Inclusion (PPI) compacts. These are agreements between public, private and civil society parties to enhance productive land and secure livelihoods in exchange for forest protection. These compacts are based on participatory land use planning, whereby land for production, livelihoods and protection is clearly identified, and their related uses are agreed upon by the landscape stakeholders and recognized by local and national governments. The compacts also include goals for each of the PPI components, a time bound plan of action, clear definition of roles & responsibilities and a budget for implementation. IDH, together with its partners, is piloting PPI compacts in several landscapes in Indonesia, Liberia, Côte d’Ivoire, Kenya, Ghana and Brazil. As explained in this short video, in Liberia, the compact will bring together communities, the Forestry Development Authority and Golden Veroleum Liberia, for them to agree to conserve, actively monitor and manage forests, in exchange for access to investment capital and technical assistance to establish community oil palm farms.
Convening Market Demand
But working on the supply side alone is not enough. Market demand needs to be redirected throughout the supply chain towards the producing regions, towards a landscape approach in which improvements are taking place. Two brief examples of how this can look like. Together with nine national palm oil initiatives and three umbrella European food organisations, IDH has convened the European Sustainable Palm Oil project, with the overall objective to achieve 100% sustainable palm oil in Europe by 2020. This 2015 private sector commitment was followed by governmental support from six European countries through the Amsterdam Declaration. This was the first time ever that Europe spoke with one voice with regards to sustainable palm oil – a signal that was very well received by the producing countries and which we leverage, linking it to the Indonesian landscapes where we work.
We also recently finalized a soy footprint study with four major European retailers. It showed that only a handful of direct suppliers to those retailers deliver about 50% of the volume of meat, dairy and eggs. Only five feed suppliers deliver the feed to the farmers to cover the volume, while only three soy traders deliver up to 75% of the imported soy. That is a key learning, as this is a relatively simple supply chain model to handle. All the retailers, direct suppliers, and feed suppliers have to do is come together and condition the traders to source soy sustainably from a Mato Grosso jurisdiction. To that end, in January 2017 we signed a Memorandum of Understanding (MoU) by AproSoja, ABIOVE, FEFAC, FEDIOL and IDH at the Brazilian Embassy in Lisbon. The purpose of the agreement is to strengthen cooperation in the area of responsible soy production in Brazil.
Finally, during the World Economic Forum Annual Meeting in Davos in January, a new Production, Protection, Inclusion Fund was announced to kick-start investments in deforestation-free agriculture in countries that are working to reduce deforestation and peat degradation. With a capitalisation goal of $400 million by 2020 this Fund is an exciting opportunity for CGF companies to jointly shape solutions to mitigate deforestation.
To conclude – as the number of landscape program grows, so does the knowledge and experience in convening these initiatives. IDH together with its partners will constantly strive to analyse and disseminate findings along the way, continue to actively connect demand and supply, and support Consumer Good Forum companies in achieving their 2020 deforestation targets.
This post was written and contributed by:
Global Landscapes Director
Daan van der Wekken
Head of Retail and Trade