Data vs deforestation: A breakthrough in supply-chain transparency

Data vs deforestation: A breakthrough in supply-chain transparency

Article by Thomas Sembres, EU REDD Facility

This article first appeared in the OECD Observer

We are eating our way through tropical forests. Whether it’s a cappuccino for breakfast, a burger for lunch or a chocolate bar as an after-dinner treat, the things we consume in OECD countries are often linked to deforestation in the tropics, where trees are falling at alarming rates.

Agricultural expansion to produce commodities like beef, soy, coffee, palm oil and cocoa has driven over 70% of tropical deforestation in the last decade. Deforestation has a significant impact on local livelihoods in developing countries. It destroys the habitats and ecosystem services that underpin the security of our water, food, and energy resources.

Deforestation damages climate stability, but also business reputations. It is becoming increasingly difficult for companies to ignore the risks of environmental damage in their supply chains. In fact, several hundred companies with a multi-trillion-euro combined market value have made a commitment to eliminate even the possibility of deforestation from their supply chains. In 2014, world leaders from 18 OECD countries and 22 other countries signed the New York Declaration on Forests, a global pledge to halve the loss of natural forests by 2020, and end it by 2030. Since 2015, seven European countries have joined forces in shifting towards deforestation-free trade by forming The Amsterdam Declarations.

How do we transform these aspirations into action?

Until now, the complexity and opacity of global supply chains has made it difficult to tackle deforestation within mainstream markets. Much effort has been invested in traceability and certification but for the vast majority of commodities with deforestation risks there is simply no information to support action and policy implementation. The data revolution underway may provide solutions.

A global, open-access initiative led by the Stockholm Environment Institute and Global CanopyTransparency for Sustainable Economies, or Trase for short, reveals the detailed connections between internationally-traded commodities and the places where deforestation is happening. It does this by processing large and disconnected datasets of customs records, fiscal registries, production censuses, and transportation tracking systems that had been previously untapped. By tracking commodities from their local places of production to consumer countries through exporters and importers, Trase can systematically link the activities of supply-chain actors to specific production areas and better identify risks and opportunities. This has enabled Trase to map regions in Brazil where soy production is no longer encroaching on forested areas, for instance, and where companies have made commitments about the sustainability of their soy production (see map).

Trase’s director, Toby Gardner, explains: “As transparency improves, supply-chain actors have a greater incentive to work together to address environmental and societal problems in producer regions.”

At the European Forest Institute, we are working with Trase to develop applications tailored to the needs of governments on both ends of the supply chain. They will be able to use this data to better monitor forest-related risks and identify opportunities. Reliable, comprehensive and up-to-date information is essential for effective partnerships between producer and consumer countries. It also informs policies that ease market access for legal and sustainable products while discouraging those linked with supply chains tainted with, in this case, deforestation.

This enhanced transparency made possible by initiatives like Trase has become essential in national strategies to eliminate deforestation from supply chains. France, for instance, is currently drawing up its own strategy and Trase’s input was important early on in the process. Its data is contributing to a better understanding of whom to engage with and where to invest effectively to reduce the risk of deforestation being caused by French commodity imports.

Going back to South American soy, of all the agricultural commodities linked to substantial forest clearing in the tropics, soy is the most internationally traded, and Brazil is poised to overtake the US as the world’s leading exporter of soy. Global demand for this commodity is driving a significant loss of native vegetation in parts of Brazil’s ecologically crucial Cerrado region. While China is by far the biggest importer of soy grown in the area, and increasingly so in 2018, various OECD countries have also been importing large quantities of soy with a high risk of deforestation.

According to industry and the Brazilian government´s own projections, some 10 million hectares of land will be converted to soy cultivation in the next decade in Brazil, much of it in the Cerrado. Trase data and analysis can help companies, countries, civil society and consumers work together to ensure that South America’s remaining forests are not lost in the process.

Besides soy, Trase will be able to track over two-thirds of the total traded volume in forest-risk commodities by 2021, including beef, palm oil, pulp and paper, coffee, and cocoa.

This supply chain transparency can go a long way towards improving production practices, procurement and investment policies, and supporting independent monitoring schemes and public development planning. This is not just about deforestation but about the social and environmental quality of the commodities we produce, trade and consume. It is essential to our sustainability agenda and reinforces the goals of the Global Partnership for Sustainable Development Data.

Governments can seize this opportunity and start deploying their own data to support sustainability. They could contribute their customs records to support rapid-response monitoring systems and improve market intelligence on global commodity markets. This will help shape a future in which commodity trade is not accompanied by widespread environmental destruction and social exploitation. And that should make our favourite foods taste even better.

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Photo by alffot