Avoid Land Conversion Across Landscapes
Environmental Defense Fund
Companies should prioritize responsible commodity sourcing that avoids deforestation and other land conversion of carbon stores such as forests, grasslands, and wetlands. Compensation mechanisms like ecosystem restoration and carbon credits are positive steps towards climate action, but they should not replace a company’s efforts to halt deforestation and other relevant land-use changes in their supply chain.
Preventing the conversion of established carbon storage hotspots, such as tropical forests or boreal peatlands, is crucial in avoiding the release of significant amounts of carbon from these ecosystems into the atmosphere. Conserving these systems means that they not only can continue to maintain the crucial carbon stocks but also can build upon them. Moreover, preserving these ecosystems helps safeguard biodiversity habitats, maintains water provisioning, and supports the health and livelihoods of nearby human communities, among other benefits.
Although companies may be tempted to invest in ecosystem restoration projects or programs like tree planting, it’s essential to prioritize protecting existing carbon sinks as the primary climate mitigation strategy. Companies must first tackle the underlying problem – the land conversion and deforestation practices in their supply chains – with complementary compensation mechanisms that concentrate on restoring converted lands.
How Can Companies Stop Land Conversion Practices?
While it may appear simple to halt land conversion, the reality is much more complex. Many communities rely on supplying agricultural commodities like beef, soy, pulp and paper, palm oil, and cacao to outside companies for their livelihoods – and increased or sustained production of these commodities under typical practice regimes tends to require more land. Fortunately, many resources are available to companies to help them address deforestation in their supply chains. Below are the key steps that companies may consider curbing deforestation and land conversion in their supply chains.
- Conduct a risk assessment: This is a vital first step in understanding where deforestation, land conversion, and even human rights issues might be hidden in a company’s supply chain. By mapping the supply chain to major deforestation or other land-use change hotspots with tools including satellite imagery, remote sensing, and supply chain mapping, companies can better trace and target their efforts to meaningfully reduce land-use conversion.
- Develop a policy: Upon identifying the key hotspots, companies should develop a comprehensive policy that outlines their commitment to eliminating deforestation and land conversion within their supply chain. This policy should take the local community context of the sourcing region into account and incorporate perspectives from both internal and external stakeholders regarding labor rights, human rights, anti-corruption and fair business practices.
- Set targets: Companies should set ambitious targets for reducing or eliminating deforestation from their supply chain. These targets should be measurable and time-bound and should cover the entire supply chain, from the source of their agricultural commodities to the end consumer.
- Implement a traceability system: Companies should establish a robust traceability system to ensure that the commodities used in their products are not associated with deforestation. This system should track the origin of the commodities, including the specific location of the forest or plantation, and should be transparent and independently verified.
- Engage with suppliers: Companies should foster collaborative partnerships with their suppliers, emphasizing open communication and cooperation. This approach involves engaging suppliers as strategic partners, sharing knowledge and resources to collectively address sustainability challenges. It may entail offering training, capacity building, and financial incentives to supporting suppliers in achieving sustainability targets. Companies and suppliers can collaborate in obtaining international recognized certifications and adhering to standards like ISO 14001, SA8000, fairtrade certification, Forest Stewardship Council, which promote ethical and responsible practices, including the protection of Indigenous Peoples’ rights and local communities. Additionally, where relevant, companies may encourage suppliers to engage in local policy efforts aimed at preventing land-use change.
- Monitor and report: Companies should establish a monitoring and reporting system to track progress towards your deforestation targets. This system should be transparent and include regular reporting to stakeholders, including investors, customers, and civil society organizations.
Go Beyond an Individual Company Supply Chain to Address Deforestation
Most corporate efforts to combat deforestation have focused on improving individual company supply chains, resulting in isolated pockets of “green” amidst a larger landscape of deforestation. While it’s important for companies to take action within their supply chains, it’s not enough to address deforestation on a farm-by-farm basis.
One promising approach to combating deforestation is to invest in jurisdictional strategies, which involve partnering with governments and local stakeholders at the regional or jurisdictional level to develop new approaches to avoided or reduced deforestation that enhance the governance of forests and land use in larger areas. By focusing on legality, transparency, and monitoring, significant improvements can be made at scale. With this systemic approach, it’s possible to achieve both thriving forests and strong economic growth.
As a next step in combating deforestation, companies should make sure its supply chain practices are in line with jurisdictional program targets. That would require companies to collaborate with other key actors, such as governments, local communities, civil society organizations, and companies, who are actively involved in jurisdictional approaches. By incorporating supply chain engagement into jurisdictional strategies, forward-thinking companies can contribute to systemic change and foster the development of sustainable sourcing regions in the long run.
Invest in Compensation Mechanisms Like Ecosystem Restoration and Carbon Offsets
While addressing the destruction and degradation of forests, grasslands and wetlands in supply chains should be the number one priority for climate mitigation, companies can also consider funding large scale conservation and restoration initiatives through the purchase of carbon credits as a complementary strategy to offset residual emissions within their supply chain.
To do this, EDF recommends prioritizing funding projects and/or purchasing carbon credits from high-quality jurisdictional-scale carbon credit programs that involve partnerships with governments and local stakeholders to improve the oversight of carbon stores and land use in a larger jurisdictional area. Resources, like the Tropical Forest Credit Integrity Guide, provide guidance on how to differentiate high-quality carbon credits. The LEAF Coalition, which brings together companies, national governments, and philanthropy to finance large-scale tropical forest protection, is one avenue for supporting the development of high-integrity jurisdictional carbon credits.
Companies should invest in projects and programs that reduce threats to carbon hotspots and support the full and effective participation of Indigenous Peoples and Local Communities as active partners rather than passive beneficiaries. These initiatives must adhere to the REDD+ safeguards and undergo independent third-party verification and validation. By prioritizing these programs, companies can not only offset their emissions but also support sustainable land management practices and protect biodiversity. It is crucial to carefully assess the quality and integrity of the carbon credits purchased to ensure that they represent genuine emissions reductions and removals and provide long-term benefits for the environment and local communities.