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Nigel Topping, Senior Supporter of Climate Action at COP26, said: “The time has come to increase our collective ambition to achieve the Paris Agreement globally.
“Stopping agriculture-driven deforestation by 2030 to halve emissions and reverse biodiversity loss is not an option, but a necessity for companies that are credibly committed to net-zero emissions to meet their science-based commitments condition.
“Without this, 1.5C cannot be kept within reach. Companies that interact with the food system across the value chain need to address deforestation to protect their future business and make a difference in protecting forests, wildlife and forest-dependent communities play a role in them, helping to shift the system toward a nature-positive future.”
The report evaluates and ranks the 350 companies that produce, use, trade, or sell the largest quantities of these commodities, as well as the 150 largest banks, institutional investors, and pension funds that finance these commodities.
It monitors whether they have published clear policies for each forest risk commodity they are exposed to in their supply chain or portfolio, and how they implement and report on their commitments.
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Many people ignore soy, which can be a hidden ingredient in meat, fish, dairy and eggs because it’s commonly used in animal feed. Brands with no deforestation policies for soy include General Mills’ Haagen-Dazs ice cream, Kraft Heinz and Hershey’s.
Companies face immediate threats to their business as deforestation exacerbates climate impacts, causes biodiversity loss and affects water supplies, which in turn affect growing conditions for commodity crops, affecting supply and prices.
The report also linked deforestation to human rights abuses, and indigenous peoples and local communities often lose access to their lands. None of the companies assessed had a comprehensive approach to protecting human rights.
Financial institutions have provided a total of $5.5 trillion to the 350 companies most exposed to deforestation in their supply chains, but they have not used this leverage to drive change.
Nearly two-thirds of firms do not have specific commodity policies for deforestation risk in their portfolios, including BlackRock, Vanguard and State Street, the world’s three largest asset managers.
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Even financial institutions committed to climate action fail to recognize the link between deforestation and undermining their goals. The report found that 22 of the 150 companies made net-zero climate commitments, but all continued to fund companies that did not commit to ending deforestation, totaling $66.9 billion.
Governments are now requiring companies to conduct checks to ensure there is no illegal deforestation in their supply chains. The Environment Act created the law in the UK in November 2021, and the government is negotiating the full scope of the measure. Similar due diligence legislation is being developed in the EU and the US.
Leaders from 141 countries with more than 90 percent of the world’s forests signed a declaration issued at the 26th Conference of the Parties in Glasgow, pledging to “stop and reverse forest loss and land degradation by 2030”.
Speaking at the climate summit, European Commission President Ursula von der Leyen said: “European voters and consumers … no longer want to buy products that cause deforestation or forest degradation.”
At COP26, more than 30 financial institutions pledged to do their best to eliminate commodity-driven deforestation from their portfolios by 2025. However, the report shows that only four of them are among the 150 companies with the greatest impact on the industry: Fidelity International; Legal and General Investment Management; Schroders; Sumitomo Mitsui Trust Asset Management.
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Brendan Montague is ecologist. This article is based on a Global Canopy press release.
