Recently at the World Economic Forum in Davos, 20 of the world’s largest commodity producers, traders, manufacturers, consultants and retailers launched a new partnership with research institutions and banks to monitor deforestation and manage sustainability from farm to customer. Globally, 366 companies worth $2.9 trillion have committed to eliminate deforestation from their supply chains, but they need better information to make good on their commitments.
The partnership will focus on building a global decision-support tool to increase transparency and traceability across supply chains.
Led by the World Resources Institute’s Global Forest Watch team, partners include Bunge, Cargill, Carrefour, Conservation International, Daemeter, GIZ – Die Deutsche Gesellschaft für Internationale Zusammenarbeit, Envol Vert, IOI Group, Mars, Mondelēz International, IDH–The Sustainable Trade Initiative, the Inter-American Investment Corporation (IIC/IDB), FMO–Dutch Development Bank, National Wildlife Federation, Rainforest Alliance, Proforest, The Nature Conservancy, Transitions, Unilever and Walmart. It will also contribute to achieving the zero-deforestation goals of the World Economic Forum-convened Tropical Forest Alliance 2020, the Consumer Goods Forum, Banking Environmental Initiative, and more.
The tool will build on the technology and methods developed by WRI on the Global Forest Watch Commodities platform, which currently allows companies to evaluate supply chain risk through high-resolution maps of tree cover loss, near-real-time deforestation and fire alerts, and analysis of individual mills and farms. The new tool will not only be a source of information, but a fully operational management system.
“We already understand the need to combat deforestation in order to protect natural capital, curb climate change and sustainably feed the world. The political will is there,” said Andrew Steer, President and CEO of WRI. “Now is the time to use the power of information technology to meet those goals, while also generating sustainable business opportunities. That could really change the world.”
Deforestation presents a major risk to businesses, especially those with large agricultural supply chains, and investors are increasingly aware of risks to their portfolios. Agriculture accounts for more than 70 percent of tropical deforestation as forests are cleared for plantations, pastures and farmland. Deforestation can present legal and reputational risks – not to mention billions in potential financial risks – for companies if they source commodities from protected areas or land with disputed ownership. Companies that effectively protect forests while supporting local communities, however, can benefit from a more secure and sustainable supply of materials while preserving ecosystem functions that underpin productive agriculture.
The new and improved tool will expand GFW Commodities to become the go-to online system to utilize the power of satellite monitoring to track and manage forest-related sustainability performance. It will incorporate functions that allow banks and financial institutions to evaluate deforestation risk in their commodity investments. The new application will enable a company or bank to plot the location of thousands of production mills, farms or municipalities; access alerts and dashboards to track issues such as tree cover loss and fires occurring in those areas; and inform decisions to mitigate or eliminate issues. Key functionality will incorporate agricultural sustainability data and tools into companies’ existing platforms, while keeping their proprietary information secure.
Through this new approach, companies and banks will be able to integrate forest monitoring into their core business strategy the same way they track commodity prices or stock markets. The partnership’s vision over the long term is to draw on its members’ wide-ranging expertise to monitor other areas of sustainability, from water stress to labor and human rights issues. Over the next year, the partners will provide input into the design of the new tool and may test it across their supply chains.
Mars, Unilever, Cargill and Mondelēz are already using GFW Commodities to assess deforestation risks in their palm oil, soy and cocoa supply chains across a collective area of land the size of Mexico.
“Over the last year, Cargill partnered with WRI and GFW to help us establish a baseline for tree cover loss in our supply chains from which to measure our progress forward,” said Mark Murphy, Assistant VP of Sustainability-Corporate Affairs at Cargill. “We are proud to join this new initiative to expand GFW’s leading tools and advance a common framework to help all stakeholders better measure and monitor progress to protect forests.”
Delivered through an easy-to-use design, the new platform will allow decision-makers to prioritize certain geographic areas to fight deforestation where it is needed most, such as by certifying sustainable operations, partnering up with local communities or buying from producers who are sourcing from areas using sustainable practices. Such technology will also generate business opportunities by, for example, allowing trading companies to identify where their operations are geographically concentrated or enabling financial institutions to create new ‘green’ credit lines.
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