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Action

Unlocking supply-chain data to reduce deforestation

The Trase initiative

Transparency for Sustainable Economies (Trase) is an online platform aimed at improving the transparency, clarity and accessibility of information on the commodity supply chains that drive tropical deforestation. The Trase initiative, initially known as Transformative Transparency, is being led by the Stockholm Environment Institute and the Global Canopy Programme. As project partner, the EU REDD Facility is helping to tailor the platform to the needs of government, trade and customs authorities for monitoring risks and opportunities in commodity production and trade.

The Facility’s contribution builds on the International Forest Risk Model (INFORM), designed by the Facility in partnership with the Global Canopy Programme and Oxford e-Research Centre.

Key facts

The objective

The aim of the Trase initiative is to enable users to assess the risks of deforestation associated with purchasing practices and investments in supply chains. The initiative sets out to do this by using data to reveal the links between environmental and social risks in production areas with supply-chain actors such as producers, traders and retailers in consumer countries. Trase also addresses land-use risks and opportunities that are unrelated to deforestation.

By making information on the risks of deforestation associated with supply chains available, Trase aims to provide supply-chain operators and producing jurisdictions with a strong incentive to improve business practices. Improving the transparency of supply chains is necessary to meet ambitious private and public zero-deforestation commitment targets and to achieve sustainable commodity production. Trase also aims to help companies reduce the risks of deforestation associated with their supply chains and investments, and identify business opportunities.

The long term goal is to ensure that the supply chains of commodities from areas where agriculture is expanding and intensifying across the tropics are sustainable. Greater transparency can play a critical role in catalysing improvements in production practices, procurement and investment policies, third-party monitoring schemes and government strategic development planning.

Palm oil harvesting

Palm oil harvesting

Indonesia

Source: Golden Agri Resources

Palm oil harvesting

Indonesia

Source: Golden Agri Resources

The challenge

Deforestation has a significant impact on local livelihoods, destroys habitats and ecosystem services underpinning water, food and energy security, and is responsible for 15% of global carbon emissions. Agricultural expansion to produce a few globally traded commodities including soya, beef, leather, palm oil, pulp and paper and timber, has driven over 70% of tropical deforestation in the last decade.

Several hundred companies with a combined market value of over EUR 3.5 billion and motivated by reputational, policy and operational interests to take action, have committed to eliminating risks of deforestation linked to their supply chains. In carrying out their commitments, the challenge for companies and private institutions is to identify and reduce the deforestation risks and impacts associated with their procurement policies and supply chains.

Reliable information on complex global supply chains is limited. This lack of information is a serious barrier to effective decision-making on deforestation risks in the public and private sectors, and to transformational change.

The approach

The approach of Trase is to harness, through an online platform, large datasets of untapped production, trade and customs data in order to uncover the supply-chain pathways of internationally traded forest-risk commodities. These connections span from the local places of production to consumer countries through exporters, traders and ports. Trase makes comprehensive datasets available on the online platform which include detailed information on, for example, shipping transactions, individual operators and customs declarations.

Data that can be accessed on the online platform does not rely on voluntary initiatives nor on regulatory approaches, as these can encounter problems with participation and enforcement. Instead, the platform makes available concrete, reliable data from a wide range of sources. The initiative encourages actors to  add data to the platform to demonstrate legal and sustainable practices, which creates a reputational incentive. As transparency improves, supply-chain actors have a greater incentive to work together to address environmental and societal problems in producer regions.

The Facility’s contribution to the Trase initiative builds on a feasibility study for an International Forest Risk Model (INFORM). The study involved calculating probabilities and developing criteria to assess deforestation risks using a range of data, including earth observation, customs and trade data.

The EU REDD Facility initiative combines REDD+ jurisdictional approaches and supply-chain incentives to address the drivers of deforestation. This approach enables stakeholders at the jurisdictional level to benefit from REDD+ initiatives and climate finance while gaining access to forest-friendly commodity markets.

Going forward, Trase will undertake case studies of supply chains for three major commodities: soy, timber and palm oil.

The EU REDD Facility and its partners will investigate five thematic issues that will feed into the TRASE platform. The five thematic areas are:

  • Linking the Trase platform with jurisdictional monitoring systems
  • Integrating data on actor performance beyond deforestation rates, including criteria such as legality and land-use governance
  • Assessing the potential to provide data on smallholders and assessing progress towards deforestation-free standards
  • Analysing the Trase approach to timber and how it can connect to other approaches, including FLEGT
  • Researching the links between financial flows and supply chains

Work with Trase complements the ongoing work of the Facility on national information systems for legal, forest-friendly supply chains in over 15 tropical countries. 

Truck transporting harvested oil palms, Sabah, Malaysia

Truck transporting harvested oil palms, Sabah, Malaysia

Source: CIFOR

Truck transporting harvested oil palms, Sabah, Malaysia

Source: CIFOR

Results and impact

Results

  • The Stockholm Environment Institute and Global Canopy Programme, with support from the EU REDD Facility and a number of other partners, developed a beta version of the Trase platform.
  • A public beta version of the Trase platform will be launched at COP22 in November 2016 in Marrakesh, Morocco. The platform will provide data on international soy trade from Latin America and a case study on legal timber in Brazil.
  • Since COP21, around 20 supply chain transparency initiatives regularly meet and exchange information to foster joint coordination on supply chain transparency, a movement initiated by the Trase partners. This network helps to share information and experiences, identify opportunities, gaps, and potential partnerships. It also works to find common solutions to specific issues, such as how to attribute deforestation risks to specific commodity production and trade.

Impact

  • Trase is the first initiative to take an actor-driven, sector-wide, jurisdictional approach to supply-chain governance. Transformative Transparency is harnessing technological innovation and new partnerships to make international supply-chain data publicly accessible on one online platform. The data will cover at least 70% of the global trade in forest-risk commodities within the next couple of years.
  • Greater transparency is playing an important role in improving production practices, procurement and investment policies, third-party monitoring schemes and public development planning. These improvements, in turn, are helping supply-chain actors to assess their progress towards zero-deforestation goals and to fulfil other sustainability and legality commitments. With the help of customs authorities, the initiative could be used as a tool to help countries address international transfer pricing and inform fiscal and public incentive policies. It can also be used to encourage partner countries to join the effort to achieve forest-risk supply chain transparency.
Soya plantations

Soya plantations

Brazil

Source: Leonardo F. Freitas

Soya plantations

Brazil

Source: Leonardo F. Freitas

Resources

About the authors

Thomas Sembres EU REDD Facility expert

Contact:  thomas.sembres@efi.int

Alessandro Trevisan EU REDD Facility expert

Contact:  alessandro.trevisan@efi.int

Adeline Dontenville EU REDD Facility expert

Contact:  adeline.dontenville@efi.int