Ending deforestation is essential to achieving net zero targets and mitigating the worst impacts of climate change. Yet agricultural commodity production continues to drive forest loss at an alarming rate. Investors are looking for companies to mitigate these and other risks, including new global regulations, by incorporating comprehensive, time-bound no-deforestation policies in their transition plans.
To assess the efforts of some of the world’s largest companies to eliminate deforestation from their supply chain at a foundational level, Ceres developed the Deforestation Scorecard, simply asking: Does the company have a robust no-deforestation policy?
Key findings of 53 companies:
Most companies assessed have a no-deforestation policy, but only 18 companies have a company-wide, no-deforestation policy that covers all the commodities subject to new European Union regulation.
Only four have policies that cover their full supply chains and all their sourcing regions, exposing them to reputational and market risks.
Most companies have specified a target date by when they intend to fully implement their no-deforestation policies. But only eight of these company policies are ambitious enough to meet the recommended 2025 no-deforestation target date.
Only five include a cutoff date that prohibits commodities from being produced on land that was deforested after 2020. A 2020 cutoff date is necessary for compliance with the new EU regulations and removes the incentive for continued deforestation.