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Entries with tag transparency .

Season's greetings and 2021 in review

by Christophe van Orshoven 

As 2021 draws to a close, I’d like to take this opportunity to share some highlights from this year’s work by the EU REDD Facility. 

This year we celebrated the 10th anniversary of our founding, taking the opportunity to reflect on the lessons we learned over the last decade. We’re working to ensure these insights help to shape and accelerate action for protecting and restoring the world’s forests.  

Taking stock of progress towards addressing deforestation 

The Glasgow Leaders’ Declaration on Forest and Land Use, drafted as part of the UN Climate Change Conference of the Parties (COP26) process, is a significant achievement. The Declaration brings more than 130 countries to work collectively to halt and reverse deforestation by 2030.  

We’re collaborating with partner countries in Africa, Asia and Latin America to understand the governance challenges driving deforestation, track private finance for tropical forests, and develop pragmatic approaches that monitor and deliver change for forest and land-use sector governance. 

Assessing the revised climate plans of several of our partner countries, we’ve seen many opportunities to work in partnership to address forest land-use sector challenges. But we’ve also found a mixed picture in terms of overall pledges to reduce emissions, and forest-related targets.  

A new pathway to decoupling deforestation and trade  

In launching our Transparency Pathway, we offer a pragmatic method for turning policy aspirations into measures to decouple deforestation and trade. Our first Transparency Pathway insight demonstrated how supply chain data can be used to develop new understandings of commodity trade contexts. This information unlocks potential for partnerships between producers, consumers, and trader groups to shift commodity markets towards sustainability. Building on our partnership with the Trase Initiative and the support we provided to our Indonesian partners tracking jurisdictional sustainability, we found growing interest from our partner countries in supply chain transparency approaches. 

Land-use planning processes get easier with an updated website and training 

This year we gave our flagship Land-use Planner a major overhaul. Partners in Africa, Asia and Latin America used the tool to help develop land-use scenarios, compare social, economic and environmental impacts, and weigh policy decisions. The tool is now available in 6 languages and more than 100 participants have been trained throughout the year, now taking the tool forward in their own programmes and land-use planning activities across the globe.   

Towards 2022 

In 2022, we look forward to: 

  • Consolidating the work on inclusive land-use planning at local level in Central and West Africa 

  • Strengthening our tools with new modules and data, such as spatial applications for the Land-use Planner and private finance mapping guidelines for the Land-use Finance Tool, and developing a knowledge base on forest and land-use governance in our partner countries 

  • Continuing to work with country partners to increase transparency in palm oil, cocoa and coffee supply chains in light of emerging market requirements for promoting legal and deforestation-free trade  

  • Providing support to jurisdictional approaches to promote sustainable land use and inform public and private sector dialogues and policy development in Côte d’Ivoire, Republic of the Congo, Indonesia and Vietnam.  

If you’d like to know more about any aspect of our work, subscribe to the EU REDD Facility newsletter.   

Christophe van Orshoven 

Team Leader

EU REDD Facility

 

Tracking private finance in tropical forest countries – COP26 side event

By Adeline Dontenville

On the second day of the UN Climate Change Conference (COP26) in Glasgow, world leaders announced a pledge to save and restore our planet’s forests. With that deal came a long list of commitments from public and private sector actors to combat deforestation.

These included ambitious financial commitments to support forest protection and zero-deforestation commodities - including $7.2bn from the private sector - as well as commitments to align investments to sustainable land-use objectives. For instance, CEOs from more than 30 financial institutions, with over $8.7 trillion of global assets, have committed to eliminate investments in activities linked to agricultural commodity-driven deforestation. These commitments add up to almost a decade of announcements aimed at mobilizing private finance to support forests.

Despite this global recognition of the importance of unlocking private finance at scale to address deforestation, there is still very limited information available on the volume of capital flows into land use. These financial flows are not tracked or reported consistently. Monitoring of private finance is challenging across any sector, yet tracking flows related to land-use change in tropical forest countries is particularly challenging for many reasons. These include the issue of defining what constitutes sustainable land-use; the difficulties in accessing disaggregated data on private flows due to confidentiality and market regulations; and the very nature of land-use activities which are embedded into often largely informal rural economies.

Building robust approaches to track private flows in land-use is essential to increase the transparency of investments impacting forests and ecosystems, hold actors accountable to their commitments, and measure progress.

On 8 November, the EU REDD Facility hosted a COP26 side event to explore tracking private finance in tropical forest countries. The virtual event provided a public platform for practitioners who are paving the way towards building approaches that shed light on the private sector’s role in financing nature-based solutions and sustainable land-use.

Three presenters spoke to this topic from different angles:

  • The Forest Stewardship Council’s Chief Climate and Ecosystems Officer Asger Olesen discussed the diversity of angles through which private land-use investments can be approached, and made practical recommendations on how to implement tracking studies.
  • Gabriela Coser from Climate Policy Initiative shared a country perspective, namely Brazil’s experience in identifying private investments into land-use, and lessons learnt from that comprehensive exercise. The study demonstrated that supporting tropical forest countries in understanding their financial landscapes and the leverage effect of their public policies is key to enhancing domestic resource mobilisation efforts.
  • Ivo Mulder, head of UNEP’s climate finance unit, presented results of UNEP’s efforts in quantifying global investments into nature-based solutions, and described concrete steps for action to deliver on the ambitious pledges coming out of COP26.

Their remarks were followed by a question and answer session. We invite you to watch the event recording.


Adeline Dontenville

Land-use finance expert

EU REDD Facility

 

A new transparency pathway to decoupling commodity trade from deforestation

By Thomas Sembres



Global supply chains are notoriously complex and opaque, making it very difficult to address sustainability issues in mainstream markets – including deforestation, sustainable livelihoods, child labour and land grabbing.

In recent years, however, there’s been a surge of global supply chain transparency instruments, data and analysis to help company and government efforts to stop deforestation associated with commodity trade. These include:

  • online databases
  • dashboards
  • scorecards
  • traceability platforms
  • interactive maps
  • independent local monitoring initiatives

These advances in supply-chain transparency are transforming capacities to identify more systematically the greatest opportunities for action. For instance, subnational data analysis across major commodity producing countries in the tropics shows that the vast majority of deforestation linked to the production and trade of agricultural commodities occurs in a handful of places where the commodities are produced.

However, this is not where efforts to manage deforestation risks in commodity supply chains are systematically concentrated. 
 

Traditional approaches to tracking forest-risk commodities

Traditional approaches to tracing and verifying forest-risk commodities rarely penetrate a market far enough to be able to separate the bad from the good, at scale. The bad is often kept hidden in complex and opaque supply chains. Good practices like sustainable production don’t get the market visibility they deserve, and thus often fail to receive incentives from commodity markets to sustain their efforts.

The following are illustrations of the proportion of total world production covered by a sustainability certification scheme (green) versus the proportion that concentrates 80% of commodity-driven deforestation within four global supply chains (red). These are estimations made by EFI based on various sources.
 

Initial situation: efforts and risks disconnected

Share of the world production covered by a sustainability certification scheme (green) versus the proportion concentrating 80% of commodity-driven deforestation in four global supply chains (red) extrapolated from patterns of the largest producing tropical countries for each of these supply chains (Brazil, Indonesia, Argentina and Côte d’Ivoire).
 

This is a situation without prioritisation of efforts, with a high disconnect between areas concentrating the highest risks and voluntary certification and verification efforts.

Clearly, the data revolution alone is not enough. Many actors are overwhelmed with information or remain unable to seize the opportunities that it can provide. Increasingly, the most significant challenge is making data useful for specific policy purposes, based on shared understanding of trusted information.
 

A new approach: the Transparency Pathway

A new approach is possible: one that leverages transparency at both ends of major agricultural commodity supply chains, and that can turn policy aspirations into pragmatic measures to decouple deforestation and trade.

Our new Transparency Pathway offers a pragmatic method to shift commodity markets towards sustainability, by harnessing the potential of existing information and transparency instruments.
 

Transparency Pathway: Channelling efforts towards risks

In this situation, efforts are channelled towards risk areas through the Transparency Pathway, after agreeing on a risk-based mechanism with stricter requirements (e.g. mandatory third-party verification) for high-risk areas only. This also enables reducing the burden of proof on producers in low-risk areas.
 

Six steps for harnessing the power of data

The Transparency Pathway is a tested method that builds on our experience in supply chain transparency in various countries. In particular, it draws on our partnership with Trase, the first initiative to unlock subnational supply chain transparency at scale in tropical countries.

The method charts six pragmatic steps designed to make collaboration between public and private supply chain actors more impactful and inclusive, while reducing costs and gaining positive visibility in global commodity markets. Incremental information disclosure is used as a mechanism to reduce information asymmetry among actors, improve governance and support increased accountability.

The six steps are:

  1. Building trust by engaging stakeholders
  2. Measuring subnational commodity deforestation
  3. Assessing jurisdictional sustainability
  4. Tracking supply chains to jurisdictions
  5. Establishing a central point of information
  6. Independent monitoring

These steps are adaptable to the country and supply chain context, and the whole process can be applied to any measurable sustainability issue.
 

A jurisdictional approach

We have chosen to take a jurisdictional approach in the Transparency Pathway for several reasons:

  • Possibilities for balancing detail and scale.
    Jurisdictional approaches provide a middle ground between finer approaches that are impossible or too costly to implement at scale, in the absence or incompleteness of property-level data on deforestation, production and supply chain connections; and on the other hand, coarser scale approaches. These may be risk analysis at national level that cannot have the necessary finesse for targeted and proportionate interventions, ending up with much fewer levers for action. 
  • A strategy to include vulnerable actors.
    Traditional farm-level certification approaches tend to exclude the people with the greatest needs, such as small-scale farmers and indigenous communities. This is because they usually place the burden of proof on commodity producers. Small-scale producers rarely have the skills and resources needed to meet this burden of proof and obtain certification. Small-scale producers can also struggle to meet sustainability standards if their land is not zoned for legally planting crops, if administrative procedures are complex, or if official monitoring and law enforcement are not fairly or evenly directed. Only the government and local authorities can address these governance issues.
  • Recognition of government authority to control land use and supply chains.
    The advantage of involving local governments is that they often have the authority and legitimacy to implement sustainability policies – and sometimes, in decentralised systems, to issue regulations – that cover the entire land area under their control. They may also have the authority to monitor and enforce relevant laws and regulations. When their authority is limited, through their institutional connections and the involvement of the national administration, they can leverage regulatory changes at the necessary level. Adopting a jurisdictional approach in monitoring enables building on existing national information systems as much as possible.
  • A strategy to reduce the risk of leakage across supply chains and territories.
    Deforestation, water contamination, and child labour are among many challenges that unfortunately have a great capacity to shift across places and supply chains. These ‘leakage effects’ are a constant concern in efforts to reduce deforestation and forest degradation. Jurisdictional approaches allow for going beyond the inevitable fragmentation of other approaches that would focus on just one supply chain or group of actors in a territory. ‘Free riders’ or ‘poor performers’ don’t go unnoticed and peer pressure from other supply chain actors can help bring them on board. Leakage effects may still occur between jurisdictions, hence the interest in nesting a subnational jurisdictional approach within a national process. This is the approach taken in the Transparency Pathway, inspired by the Terpercaya experience in Indonesia.
     

A guide to decoupling commodity trade from deforestation

Governments, supply chain organisations and anyone convening a multi-stakeholder process to improve the sustainability, governance and reputation of a sector or supply chain will find the Transparency Pathway a practical guide for harnessing the transformative potential of data.

Its principles have been informed by several initiatives supporting the sustainability of commodity supply chains. These initiatives have facilitated constructive engagement among stakeholders, and made the Transparency Pathway a tested way to inform domestic policy making, investment decisions and commodity trade.

We invite you to explore the method further – take a look at the new Transparency Pathway website and don’t hesitate to get in touch for more information.

 


Thomas Sembres

Supply chain transparency and land-use planning

EU REDD Facility

 

Disclaimer

The views and opinions expressed in this blog are solely those of the original authors and other contributors. These views and opinions do not necessarily represent those of the EU REDD Facility, or other contributors to this site.