Back To the (Supply Chain) Roots – Nipping Deforestation in the Bud
Diana Rodriguez | Jun 29th 2016

Around 70% of the world’s deforestation can be attributed to commercial agriculture – exacerbated by the operations along consumer good supply chains¹. Latin America has shown to have the highest rate of deforestation in the world, where 2.8 million hectares (ha) were deforested annually for the period 2010-2015 (2 million for Africa)². In total, some 14-18 million ha of forest are lost each year—equivalent to 28-35 football soccer fields every minute.

Luckily it is not all bad news: leading corporates, key in helping deforestation free initiatives reach scale, have acknowledged the urgency to act. The Paris climate conference saw an exceptionally active private sector and well-timed announcements in favor of a low-carbon economy.  In short: the awareness and commitment is there. What we are still missing is real action that lives up to these pledges. Informing the course of corporate action on deforestation is nonetheless no easy task, and many companies are struggling to define concrete implementation roadmaps to actually achieve their targets.

In this post, I would like to share a successful case of quantifying impacts and implementing action along the supply chain:

This is a story of a private company with a global presence that is involved in the handling and refinement of an agricultural crop into a final product – a process that requires the use of fuel. This company was aware of the urgent business imperative for translating its commitments on sustainable operations into practical action along its supply chain, and for transitioning to renewable energy. More importantly, the company realised that there were lucrative business opportunities to tap into by moving towards deforestation free supply chains, from better risk management to adding value to their overall operations and the communities they engaged with. Given increased global attention to and awareness of sustainability and best practices, the company was motivated to take action to mitigate the risk of receiving penalties for issues with its operations.

Getting started with the design of a comprehensive sustainability strategy was not easy though. Where to start? This company in question began by taking a hard look at the commodity-linked deforestation embedded within their global supply chains, and realised that the source of the wood they used was unknown. What was the source of this wood and was it sustainable? Was their wood coming from plantations, natural forest or – even worse – from mature forests? And apart from sourcing, how were their own operations affecting the forests and to what degree?

What came next was the following:

#1 Ready, set….evaluate!

To start, the company engaged with South Pole Group (SPG). SPG helped the company carry out a comprehensive evaluation of its existing sustainability efforts regarding the use of fuels in their supply chain, and create a roadmap for implementing future actions. A priority was to identify countries in which the company’s operations could potentially have an impact on forest. This was done through a high level risk assessment using satellite imagery to analyse deforestation rates, natural forest cover and production quantities.

Global risk map

Adapted by South Pole Group from Global Forest Watch

#2 Assessing & visualising impacts

Countries that ranked as high risk were selected for implementing an in depth impact assessment. This included extensive desk review of the state of forest in selected countries (focusing on areas where the company of interest had operations), identification of mature forests – or forests that have not been disturbed for many years that have created specific forest dynamic that benefit native biodiversity and other ecosystem services, as well as field visits featuring interviews with farmers and other stakeholders. This vast amount of information was used to quantify the impact the company’s operations had on the forest in terms of the volume of wood used and the equivalence of that volume in hectares of forest affected. The results were astounding: SPG found that in some countries where the company operated, its wood was not only coming from natural forest, but that by the unsustainable use of it forest were eating up at a whopping 10,000 ha per year! That’s more than the area covered by the city of Zurich in Switzerland or 12,200 soccer fields.

Local farmers were well aware of the negative impact that unsustainable forest use – from a myriad of different actors – had and could have on the surrounding forests. This message came through loud and clear in the questionnaire that we did on the spot with the farmers:

“Everyone knows that the near-by forests are protected, but with weak enforcement it happens, that people go and harvest wood illegally.”

“In the past, the forest was very close to our village. We even had native fauna visiting. Nowadays, we have to travel far to get to the forest and it gets more and more difficult to find enough firewood.”

The data of the study was translated into a detailed schematic representation of the supply chain (below) showing the main tree species and source of the wood used (e.g. plantations, natural forest, mature forest), as well as their transportation mode:

Supply chain

 

Being able to speak the same language was key, which is why SPG produced a color-coded risk map to indicate areas of mature forest under high, medium and low risk of being deforested or degraded due to the company’s operations. The risk map was produced by analysing satellite images together with the information collected by the desk review and field visits.

 

Forest risk map

Colored areas represent mature forest under different risk of deforestation and/or forest degradation

#3 On the road again

Evaluations, assessments, risk maps – these are the key ingredients of the company’s shiny new implementation roadmap and monitoring framework, which was built using a bottom-up approach. These two crucial items – the monitoring framework & implementation roadmap – will support the  company in its efforts to create fully transparent reporting of their production chain and actions  to reduce greenhouse gas (GHG) emission, shift into renewable fuels and reach a sustainable wood supply.  

#4 Reaping the benefits

Contributions to reduce CO2 emissions, full transparency in the supply chain and sustainable wood supply. These are all the benefits that this forward-thinking company can already expect to tick for integrating action on deforestation into their business.

Going forward, the monitoring framework will help ensure that the company is reaching its goals of swapping fossil fuels to sustainable sources such as biomass or firewood ensuring a deforestation free supply chain. Collaboration on the sustainable use of the forests among the different stakeholders along the supply chain will guarantee firewood resources not only for the company’s operations, but also for more than 100,000 farmers who rely on wood to cover their energy needs.

Sustainable forestry including natural regeneration and agroforestry can improve local biodiversity while providing various benefits to farmers. For example the planting of native fruit trees in agroforestry with a crop can provide food, fodder to feed livestock and firewood for their energy needs.

To sum up, I find this case is a great example of how top-notch industry-expertise coupled with continuous communication can help a company turn written deforestation commitments into a full-fledged monitoring & action plan. Having strong local and regional ties is important of course, especially for making informed adjustments and improvements to ongoing actions.

This project also goes to show that deforestation free supply chains are well on their way to becoming the new “business as usual” in the ongoing transition towards a sustainable, low-carbon economy. And new tools to support this move are being rolled out in parallel: in order to save time and resources, SPG has been busy developing a tool for a rapid assessment of deforestation linked to commodities. It will ultimately integrate cloud sourced big data to open the black box of forest management in remote regions of developing countries. These will be automatically integrated with satellite mapping and state-of-the-art forestry GHG accounting. Instead of consumer good companies clicking and calculating, the tool is ultimately set to automate as much as 90% of the work flow.

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After this process, the company is in a position to show, in a transparent manner, where exactly its wood comes from and what its estimated impact is on forests. On top of that, the next steps towards reaching their sustainability targets look less murky: the company has a plan to design and implement actions to avoid negative effects of its supply chain in forest – saving up to 10,000 ha per year and creating shared value for its commerce & communities alike.


¹ Kissinger, G., M. Herold, V. De Sy. Drivers of Deforestation and Forest Degradation: A Synthesis Report for REDD+ Policymakers. Lexeme Consulting, Vancouver Canada, August 2012.
² Food and Agriculture Organization of the United Nations (FAO). 2015. Global Forest Resource Assessment 2015

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