Friday 30 April is Arbor Day. It is a day of observance in which individuals and groups are encouraged to plant trees. As the climate crisis has worsened and governments are vowing to take action, the focus of this holiday has shifted to combat deforestation and bring attention to the climate crisis while promoting a carbon-free future.
According to the Intergovernmental Panel on Climate Change (IPCC), deforestation is a major driver of global warming and responsible for up to 20% of global carbon emissions. This stands to affect at least 1.6 billion people who rely on forests for food and economic stability. This will also affect climate globally as forests act as major carbon sinks which are beneficial for trapping carbon in the atmosphere thus limiting increasing temperatures.
The main cause of deforestation is the global trade of 4 commodities. They are soy, palm oil, cattle products and timber and these 4 commodities are present in many supply chains. Data disclosed to the Carbon Disclosure Project (CDP) from hundreds of companies that have a high impact or dependency on forests shows that, on average, 15% of these companies’ revenue is dependent on these big 4 commodities. Data further shows that 70% of these companies that rely on this revenue don’t have robust strategies in place to ensure sustainable and secure supply.
With forestry and agriculture responsible for around 23% of net man-made greenhouse gas emissions, there’s an urgent need for companies to come clean about their relationship with the land, says Morgan Gillespy of CDP. Deforestation in the Amazon has shot up by over 250% in the past 2 years according to recent reports, putting an end to years of progress. If “business as usual” deforestation continues we could have phased out the use of fossil fuels and could still see up to 2C warming by 2100 according to a report from IOP Science.
Like the energy sector, only a big few major corporations are directly responsible for deforestation. While your average high street might seem unrelated to the dense thick tropical rainforests in South America and Africa, major consumer brands and industries have close links to these ecological powerhouses. Your business could be contributing to deforestation through your supply chain and you might not even know it! To date, big business has remained largely under the radar of consumers, investors and society at large. This has changed dramatically over the past few years as pressure mounts to reduce global emissions and stakeholders are demanding change and transparency.
Profits will also become affected as companies risk over €800 billion in revenues through decreased productivity and damaged reputations that accompany deforestation, according to a report from the CDP. This report is one of several recent global efforts to give private companies the power to control their own supply chains and ferret out any potential links that may be exacerbating deforestation. The small proportion of companies surveyed that do report forest-related risks calculate a combined total of almost €30bn in potential losses due to the impacts of deforestation.
This should be a wakeup call as there are major rewards and competitive advantages up for grabs for the companies willing to take bold action on deforestation and the climate crisis as a whole. To have deforestation in your supply chain is a clear business risk – not least in terms of brand reputation. Key stakeholders want to know that your business isn’t directly or indirectly driving destruction of the Amazon or animal species extinction. There are massive corporations that are currently reporting business opportunities from addressing deforestation. Many are associated with increased brand value. Even in industries like manufacturing that may not be directly consumer focused, this is important to maintain.
As the urgency around the climate crisis in general continues to escalate, all stakeholders are now demanding transparency and action. It’s time for your business to play its part, assess any areas in your supply chain that may be contributing to deforestation and make adjustments now. Ensuring your supply chains are protective of forests, other natural ecosystems and land rights is the clearest route to achieving a range of sustainability priorities for your business. Companies cannot reach net-zero emissions without forest protection so early action must be taken to set your business apart both sustainably and financially.