Company progress on deforestation in supply chains | CDP

INSIGHT by CDP

New data from the Accountability Framework initiative (AFi) and CDP show that achievement of deforestation- and conversion-free supply chains is possible, but still uncommon around the world. The AFi and CDP examined hundreds of company disclosures and revealed their findings today in Time for Transparency: Deforestation- and conversion-free supply chains.

The report provides the first clear and quantitative look at the extent to which major companies have been able to eliminate deforestation from their supply chains. Based on disclosures made last year through CDP, 64 companies say they have achieved at least one deforestation- and conversion-free commodity supply chain, based on a high-quality disclosure.

The companies reported a total of 66 agricultural and forestry supply chains as free from deforestation or conversion of other ecosystems. Those supply chains include 31 for timber products, 15 for palm oil, 9 for soy, 6 for cattle products, 3 for cocoa, 1 for coffee, and 1 for rubber.

“Companies must eliminate deforestation and conversion from their supply chains to meet near-term climate and nature targets, as well as to comply with emerging laws like the EU Deforestation Regulation. These new data demonstrate that companies need to invest in effective monitoring and control systems to address deforestation and conversion associated with their operations and suppliers, however few are doing so.”

-Leah Samberg, Lead Scientist, AFi

In total, 881 companies disclosed through CDP on at least one commodity supply chain, for a total of 1,498 commodity-specific disclosures across seven high-risk commodities. About half of the companies (445) disclosed on deforestation- and conversion-free progress. However, only 186 companies provided clear and appropriate information to justify their claims.

“We recognize that many companies were transparent about the extent to which their supply chains are free from deforestation and conversion. But the latest analysis tells us that the majority of companies remain far from achieving deforestation- and conversion-free supply chains by 2025, which is the immediate target.”

-Tomasz Sawicki, Head of Land, CDP

A variety of issues undermined the reliability of information companies disclosed, such as reliance on certification programs and risk assessments that cannot guarantee commodities are deforestation-free. Additionally, some disclosures were missing important information on company activities, products, regions, or suppliers.

“Companies need to provide stronger evidence to support claims that their commodity supply chains are free of deforestation and conversion,” Sawicki said.

The report calls on companies that produce or source agricultural or forestry commodities to communicate publicly and to suppliers their intentions to achieve deforestation- and conversion-free supply chains. Importantly, they should consider the impacts of their supply chains on all natural ecosystems, not only forests. To achieve compliance with polices, companies should also monitor and engage their suppliers.

“Making no-deforestation or no-conversion intentions clear through public policies, commitments, and supplier engagement supports disclosure and helps accelerate the transition to responsible production and trade,” Samberg said.

The CDP forests questionnaire tracks company performance on eliminating deforestation from agricultural and forestry supply chains. A record-breaking 1,152 companies disclosed through it in 2023. It was the first year companies disclosed on deforestation- and conversion-free supply chains in a standardised format using indicators developed in partnership with the Accountability Framework initiative.