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Bringing ‘radical transparency’ to trade in forest-risk commodities

Bringing ‘radical transparency’ to trade in forest-risk commodities

Growing demand for commodities such as soy, beef and palm oil is driving deforestation, with harmful impacts on forest-dependent communities, biodiversity and efforts to limit climate change. Recent moves to eliminate deforestation from supply chains, as seen in company zero-deforestation pledges, are therefore important.

But to achieve zero deforestation will require better law enforcement, monitoring and a far better understanding of supply chains. One big problem is that supply chains for commodities linked to deforestation are complex and far from transparent, and this is a barrier to effective action.

Without transparency companies cannot systematically engage in a dialogue with their suppliers. This means they cannot work together to address and improve sustainability. Equally, governments cannot make smart decisions about policy interventions if commodity supply chains remain a mystery.

To discuss ways to improve supply-chain transparency, the EU REDD Facility organised a side event at COP22, last year’s UN climate change conference in Marrakech. The event showcased an innovative data platform called Trase (Transparency for Sustainable Economies), which promises to shine a light on supply chains, enabling the private sector and governments to act.

Trase draws on vast untapped sets of production, trade and customs data. By analysing and visualising this data, Trase can reveal, at an unprecedented scale, the flows of globally traded commodities most often responsible for tropical deforestation, such as palm oil, soy, beef and timber.

Companies, financial institutions, governments and others can use Trase’s open-access platform to understand and address the social and environmental impacts associated with particular supply chains, said Toby Gardner of the Stockholm Environment Institute which, with the Global Canopy Programme, has led the development of Trase.

Right now, Trase covers the supply chains for all soy from Brazil. By 2017, it aims to include all Latin American soy as well as beef from Argentina, Brazil and Paraguay, timber from Brazil and Indonesian palm oil. And five years from now it should cover 70% of all trade in commodities whose production drives deforestation.

So, what use is all this information? Participants at the side event said new approaches such as Trase could enable countries and companies to bring about transformational change in areas of commodity production, procurement and investment.

The information Trase will provide is vital, for instance, to design sustainable sourcing strategies, and to identify governmental and private-sector partners to deliver those strategies along supply chains. The data can also help show whether policy interventions are having the desired effects.

"Trase can help us move away from a blame game, to start practical discussions around issues and solutions." 

Lucas Urbano of Danone, one of the world’s largest dairy and packaged food companies 

The aim is for Trase to shed such light on supply chains that it levels the playing field, identifies gaps to fill and problems to address, and raises standards across entire sectors. That’s why the Trase team don’t just talk about transparency, but about “radical transparency”.

While better information is important, so is stakeholder dialogue, said Rosa Maria Vidal, executive director of the Governors’ Climate and Forest Fund, which works with a network of 35 jurisdictions in Africa and South and Central America. 

Vidal warned that Trase could pose a risk if its data compels companies to abandon areas with deforestation risks without entering into dialogue with the governments and producers in those areas. Failure to do so could lead to more deforestation, she said, because of impacts on the local economies.

"Dialogue and partnerships between governments, producer companies and all stakeholders are needed to ensure that solutions to deforestation challenges are identified and tackled together." 

Rosa Maria Vidal, executive director of the Governors’ Climate and Forest Fund 

Participants agreed. They noted that tools like Trase can help to engage stakeholders initially in shaping definitions and methodologies and, going forward, in joining a multistakeholder community committed to radical transparency.

The goal of Trase and related initiatives is to make it possible to decouple trade in agricultural commodities from deforestation. As participants noted, this will require governments, businesses and civil society actors at both ends of supply chains to work together. 

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