Driving forward European action on tropical deforestation
Europe is an important market for forest-risk commodities such as soy and palm oil — making European demand one of the drivers of tropical deforestation. With a new European Action Plan on Deforestation still in the pipeline, how can European governments, and crucially European manufacturing and retail companies move forward on the commitments they have made to be deforestation-free?
Next week, Utrecht will host International Sustainability Week, bringing together many of the key players with the Round Table on Responsible Soy (RTRS) Annual Conference and a meeting of the Amsterdam Declarations Partnership (ADP) [see details of Trase team involvement below]. The latter brings together the seven countries (Denmark, France, Germany, Italy, the Netherlands, Norway and the United Kingdom) which have committed to support private sector action to remove deforestation from supply chains.
Companies have also made commitments, with the Consumer Goods Forum publishing its own deforestation commitments almost 10 years ago. But these commitments have not yet delivered the change that is needed in the sustainability of soy or palm oil.
Take the Matopiba region in Brazil for example. It is one of the most active frontiers for deforestation globally and is heavily connected to soy production. While many companies are taking action to address the deforestation challenge — those with commitments continue to be linked to deforestation.
Market penetration for initiatives which promote sustainable soy production — such as RTRS — also remain low (albeit growing). Developing a collective understanding of why this is the case and how companies and the RTRS can work more effectively together will be an important objective of next week’s meetings in Utrecht.
What has been the impact?
What progress there has been is far from equally distributed, as a recent report by IDH — The Sustainable Trade Initiative and International Union for Conservation of Nature (IUCN) highlights. While 80% of soy used in Norway and Switzerland is estimated to comply with the basic guidelines for sustainability recommended by the European Feed Manufacturers’ Federation, for Amsterdam Declaration signatory, Italy, just 3% is certified deforestation-free. Spain, one of the largest EU importers of soy, does not appear to import any certified soy at all.
Our own analysis suggests the deforestation risk associated with imports by Amsterdam Declaration Partners is higher per tonne than for China, the leading importer of Brazilian soy.
International Sustainability Week provides an opportunity to raise the bar on expectations, identify key challenges and push key players to support greater transparency and implementation.
What needs to happen?
There are plenty of reasons why companies have struggled to make their supply chains deforestation-free — supply chains are complex, and in some cases the risks are hidden. And there are few incentives for companies to make their supply chains more sustainable. Consumers, for example are seldom aware of the deforestation risks involved.
But there is also a growing recognition that the world cannot afford to lose its tropical forests — and that action needs to be taken. So how can these challenges be addressed?
We see one key opportunity as being increased transparency, combined with more effective monitoring. High-quality data can help shed light on where the risks lie in companies’ supply chains. Trase maps Brazilian soy flows from the point of production, through the trading companies. By focusing on the places associated with deforestation (and other environmental and social) risks, we can support jurisdictional-level and supply-chain level solutions to these problems.
But transparency alone is not enough. Individual companies can only achieve so much by acting on their own. But by working together there is much greater potential for addressing these problems and avoiding a two-tier system, where some companies can boast deforestation-free credentials, but the deforestation continues to supply markets elsewhere.
Finally there is a need to consider the question of cost. Companies need to invest in sustainability — but means that someone needs to pay the price.
Working together to promote progress
There has also been some progress on joint initiatives to address deforestation. A number of European countries have established working groups, or ‘roundtables’, which bring together private, public and third-sector organisations to tackle the deforestation issue within a national context.
These typically focus on developing commitments across whole sectors, exchanging knowledge and providing support for companies. Many of these roundtables are quite long-standing. For example, the Swiss Soy Network was established in 2011, with members sourcing 99% from sustainable sources in 2017 and accounting for 96% of the Swiss Market.
Other networks have emerged more recently. For example, the UK established a Roundtable for Sustainable Soya in 2018 which has examined the UK’s reliance on soy imports, and has plans for ongoing monitoring and implementation. UK-based retailers are now taking action, with new strategies or pledges on soy, including the Asda, Co-op, Sainsburys and Tesco.
The Trase team is also supporing the work of the Soy Buyers Coalition (established by the Consumer Goods Forum in partnership with Trase and Proforest) which aims to link downstream consumer goods companies to Brazilian production landscapes and identify local initiatives that might be supported to reduce deforestation risk in key areas of collective concern.
Italy is currently the only ADP signatory not to have an identified national working group or roundtable.
The ADP, RTRS and associated networks have an important role in influencing, supporting and investing in dialogue and action with other trading blocs, and the traders themselves including via the Soft Commodities Forum, a global platform established by the World Business Council on Sustainable Development to support transparent supply chains.
International Sustainability week represents an important opportunity to drive forward this momentum, bringing together all the key stakeholders and providing an opportunity to ‘harmonise actions’ towards these ends. This is an opportunity that cannot afford to be missed.
Trase in Utrecht
Chris West and other members of the Trase team will be in Utrecht for International Sustainability Week.
Trase Director, Toby Gardner will be moderating a panel on public policies at the RTRS meeting on 12 June with Fernando Sampaio, Head of the Produce, Conserve and Include Initiative from Mato Grosso, Brazil; Eduardo Lago, Chief Executive Officer, Maranhao government, Brazil; Bettina Hedden-Dunkhorst, Head of the International Division of the Federal Agency for Nature Conservation; and Vicent Van den Berk, representing the Ministry of Netherlands in the Amsterdam Declarations Partnership.
He will be moderating a panel on Inspiring to Innovate — innovations in monitoring at the Amsterdam Declaration Partnership meeting on 13 June at 10.25am, including discussions on the role of transparency, how to accelerate a cycle of continuous improvements, how to align tools and approaches, how to maintain information and transparency systems in the long term.