Zero-deforestation commodity approaches

Recently, a significant effort has been made to produce agricultural commodities in ways that reduce their impact on forests. Businesses increasingly acknowledge the competitive advantage of eliminating deforestation and promoting sustainability in their supply chains, as a way of securing both supply and markets.  

Several hundred companies with a total market valuation of over EUR 3.5 trillion have already made public commitments to eliminate deforestation from their supply chains by 2020. Mirroring these developments, governments in both consumer and producer countries have formulated intentions to stop deforestation in major commodity supply chains.  

The New York Declaration on Forests in 2014 grew out of dialogue among governments, companies and civil society, and calls for action to slow, halt and reverse global forest loss, including by eliminating deforestation from the production of agricultural commodities. Several EU member states reiterated their commitments to fully sustainable and deforestation-free agricultural commodity supply chains in Europe by 2020 in the Amsterdam Declaration in 2015. 


REDD+ and sustainable supply chains 

Private and public sector initiatives around sustainable supply chains are highly complementary to REDD+. They offer opportunities, in addition to the carbon market, for the private sector to engage on ways to reduce deforestation and forest degradation, thereby also reducing carbon emissions. 

These initiatives are addressing directly agricultural expansion, the major driver of deforestation, through supply chain interventions (e.g. certification, supply chain transparency), investments (e.g. risk assessments) and through establishing the enabling environment to guarantee sustainable commodity sourcing and production (e.g. land-use planning, impact monitoring, public-private partnerships). As such, these initiatives support efforts to reduce deforestation and implement REDD+ and Nationally Determined Contributions under the UNFCCC.  

In turn, ongoing REDD+ investments are mainly focused on: building stakeholder capacities; systems for monitoring, reporting and verification; increased understanding of drivers; national strategies; land-use planning; clarification of tenure, etc. These are all very valuable to assist countries in progressing on their low carbon and sustainable growth agendas, which may include sustainable commodity sourcing and production.  

In fact, sustainable supply chain approaches, primarily driven by the private sector, do not always have the leverage to initiate the necessary land-use governance reforms, hence the need for complementary REDD+ (result-based) incentives and approaches. Policy coherence between REDD+ incentives and broader development finance, trade and investments are therefore important to ensure they complement and mutually enforce each other in achieving deforestation objectives. In parallel to measures and reforms in the country of commodity production, demand-side interventions in consumer countries are required, to build greater market share for sustainably produced commodities. 


Integrating supply chain approaches at jurisdictional level 

As REDD+ implementation evolves and is increasingly entwined with responsible commodity sourcing and production, working at the jurisdictional level (i.e. with national or local governments) has gained momentum. Increasingly private sector actors and partners are realising that supply chain interventions are not sufficient to reduce and halt deforestation. It also requires action on local and national governance challenges (e.g. on legal clarity, tenure, land-use planning, etc.), beyond a specific supply chain, with the aim of raising the bar for all producers in a given jurisdiction.  

Though there is no single definition of a jurisdictional approach, it is considered that the jurisdictional level is closer to where land-use decisions are taken and commodity production is happening. The jurisdictional approach requires the participation of government together with other stakeholders to address complex issues in relation to land-use governance, incentives, monitoring, etc.  

Working beyond supply chains offers a way to reduce the risk of leakage (i.e. shifting deforestation to other actors within the jurisdiction) and to make certification cheaper, more efficient and more inclusive of small producers. Jurisdictional approaches also offer buyers a practical way to reduce the risk that their responsible sourcing commitments are not met by all producers in a landscape.   

However, jurisdictional approaches are complex as they engage many stakeholders, and may not be able to address issues that are usually dealt with at the highest political level, such as tenure reform. Jurisdictional approaches should also be aligned with national processes and objectives and supported by a combination of financial, fiscal, technical and trade incentives to trigger the required changes.