Addressing Deforestation Important in Net Zero Goals, Supply Chain Sustainability

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by | Nov 30, 2021

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A new approach to tackle deforestation can help businesses better monitor their supply chains and make important advancements toward net zero goals, according to a report by CDP.

CDP says implementing tactics called landscape and jurisdictional approaches can address deforestation and on a local level and used across corporate supply chains. They are frameworks that can bring companies together with local stakeholders, including indigenous groups, and can be supported with subnational governmental coordination.

By being involved at this level, CDP says businesses can more closely monitor and protect their supply chains, which will lead to less risk. The framework also addresses drivers of deforestation that has not been previously attempted, the organization says.

The report comes after COP26 where more than 140 countries announced goals to end deforestation by 2030. The BBC reported that the current pledges included investing more than $19 billion in public and private funds.

Deforestation can be a key component of net zero goals because it takes away a natural resource that can absorb carbon emissions. Many companies and governments have announced efforts to limit the practices, but CDP says a similar pledge as this year’s CDP was made in 2014 and already missed a 2020 target.

The CDP report found that 40% of tropical deforestation is the result of four goods – palm oil, timber, soy and cattle.

While clean energy is among the leading topics in tackling emissions, natural areas are often overlooked in sustainability issues. The World Economic Forum says deforestation creates nearly as much greenhouse gas emissions as all of the world’s road travel. An S&P Global Ratings report suggests that putting a natural capital value on landscapes can encourage investors to make changes much like the influence of carbon pricing. Regenerative agriculture is also becoming an important piece of improving supply chain sustainability across many industries, especially food production.

The landscape and jurisdictional tool can help companies and governments disclose their efforts and commitments on deforestation and how they are advancing toward hitting those goals. Investors can use the tool as well to see how companies are addressing deforestation to aid in their own risk assessments and investment decisions, the organization says.

CDP says an analysis of 2020 and 2021 forest data found that only 10% of companies that disclosed information had 90% of their production of one of their products certified in a non-deforestation area. Of those companies only 20% held a risk assessment in 2020.

It also allows businesses to work together with local affiliates, which will lead to improved sustainable practices and conservation of local ecosystems, CDP says.

CDP says 27 companies used the landscape and jurisdictional approaches in 2020 and that increased to 47 in 2021. The organization says it will introduce new framework into the tool to help companies better evaluate their efforts to address deforestation.

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