Tackling deforestation – 4 reasons companies should take a ‘landscape’ approach

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Jack Hurd, Executive Director, Tropical Forest Alliance; Member of the Executive Committee, World Economic Forum

• Traditional methods have failed to curb deforestation significantly but the landscape and jurisdictional approach could achieve sustainable land use and halt deforestation at the necessary speed and scale.
• The effectiveness of the landscape and jurisdictional approach lies in collaboration; companies must work with local governments, smallholders and Indigenous people to ensure sustainable commodity production and tackle systemic issues.
• Adopting the landscape and jurisdictional approach helps companies comply with emerging regulations, meet voluntary commitments and secure a sustainable supply chain.

Many living in cities and countries already stripped of native woodland may have become desensitized to headlines such as ‘Football pitch’ of Amazon forest lost every minute. But here’s a shocking statistic: what we ate and consumed – including beef, palm oil, soy, cocoa, coffee, rubber and wood fibre – led to the loss of 71.9 million hectares of forest between 2001 and 2015, an area twice the size of Germany.

Since then, the rate of deforestation has barely slowed. Last year, 3.7 million hectares of tropical primary rainforest were lost, leading to 2.4 billion tonnes of emissions. Then, consider the production pressure on forest land, given that global food demand is projected to increase by 30-62% by 2050. The sheer scale of forest loss demands a response at a similar scale. What can companies do to help reverse this terrible trend?

Put pledges into practice – climate, nature and livelihoods depend on it

The road to deforestation is paved with good intentions. In 2014, the New York Declaration on Forests pledged to halve deforestation rates by 2020, but it’s had to recalibrate. At the 2021 United Nations Climate Change Conference (COP26) in Glasgow, 141 countries agreed to “halt and reverse forest loss by 2030.” Meanwhile, a private sector group of more than 30 financial institutions with over $8.7 trillion in assets under management committed to eliminating deforestation from portfolios by 2025.

Yet, according to the latest Forest 500 report, “despite some pockets of progress, voluntary private sector action has failed to generate meaningful progress on commodity-driven deforestation.”

The risks of failure are hard to overestimate. Without reversing forest loss, we will fail to hit the Paris targets; there is a growing understanding that there is no net zero without nature.

And forests do a lot more than sequester carbon. They harbour over half the world’s terrestrial biodiversity, recharge groundwater, filter air, anchor fertile soil and act as flood barriers. At the same time, 1.5 billion people depend on forests for food, water and fuel. Climate, nature, livelihoods and rights are all at stake.

Sustainable supply chains are a priority for companies whose bottom lines depend on a steady stream of agricultural commodities. Meanwhile, as the European Union’s Deforestation Regulation (EUDR) comes into force, failure to comply with the ever-tightening regulation risks litigation or fines (4% of turnover in the case of the EUDR). When companies miss voluntary targets, boards will fret about damage to reputations and investor confidence.

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What’s the World Economic Forum doing about deforestation?

Halting deforestation is essential to avoiding the worst effects of global climate change.

The destruction of forests creates almost as much greenhouse gas emissions as global road travel, and yet it continues at an alarming rate.

In 2012, we brought together more than 150 partners working in Latin America, West Africa, Central Africa and South-East Asia – to establish the Tropical Forest Alliance 2020: a global public-private partnership to facilitate investment in systemic change.

The Alliance, made up of businesses, governments, civil society, indigenous people, communities and international organizations, helps producers, traders and buyers of commodities often blamed for causing deforestation to achieve deforestation-free supply chains.

The Commodities and Forests Agenda 2020, summarizes the areas in which the most urgent action is needed to eliminate deforestation from global agricultural supply chains.

The Tropical Forest Alliance 2020is gaining ground on tackling deforestation linked to the production of four commodities: palm oil, beef, soy, and pulp and paper.

Get in touch to join our mission to halt to deforestation.

Landscape approach – a new paradigm

With barely a handful of years left before the reckoning against 2030’s deforestation targets begins, a new approach is urgently needed. An in-depth report published by the Tropical Forest Alliance (TFA) explains how companies, countries and communities can work together to halt deforestation and conversion at the required speed and scale.

The report highlights a new paradigm to achieve sustainable land use, known by a name as complicated as the challenge itself: the “landscape and jurisdictional approach.”

The landscape part of the approach shifts the focus from narrow corporate interests towards companies working with farmers and suppliers to create positive impacts across whole landscapes or geographic areas of production. This approach still needs companies and their suppliers to make commitments and stick to them – but it also asks companies to reach beyond production to protect forests and support smallholders across the landscape.

Meanwhile, the jurisdictional scale of the approach means the landscape and jurisdictional approach can encompass a sub-national state or region, recognizing the irreplaceable role of local governments in land-use planning, governance and law enforcement when it comes to protecting forests.

Collaboration – the key to unlocking impact

In recent years, the landscape and jurisdictional approach has been gathering pace. According to research presented in TFA’s report, more than 110 companies have taken landscape-level action in the cocoa, palm oil, pulp and paper, beef and soy sectors. The number of landscape and jurisdictional approach initiatives supported by companies soared sevenfold in the six years to 2022.

The reason the landscape and jurisdictional approach can be so effective in helping companies tackle deforestation lies in one magical, if overused, word: collaboration. The premise is that local buy-in and collaboration increase the likelihood of long-term impacts. Additionally, there are factors outside corporate control that only communities or governments can influence.

So, for a company sourcing a commodity to have a positive rather than a negative impact, it must collaborate with relevant actors in that landscape or jurisdiction, ranging from local government officials and non-government organizations (NGOs) to suppliers, smallholders and Indigenous people. Each set of actors represents different interests but together – and only together – can they ensure the sustainable (and sustained) production of commodities from that area.

4 reasons why companies should take a landscape approach

Apart from the huge risks to climate, nature and society posed by uncontrolled deforestation, it is in companies’ commercial, legal and reputational interests to eliminate conversion from supply chains – whether to meet voluntary net-zero and deforestation commitments, comply with emerging regulations or secure an ongoing pipeline of produce.

But why should companies use a landscape and jurisdictional approach to complement their ongoing (and necessary) supply chain actions? Here are four reasons:

1. Compliance is too difficult to ensure alone

Guaranteeing compliance with commitments and regulations is a complex challenge that can include millions of smallholders, especially in cocoa and palm oil supply chains. Tackling systemic challenges – such as deforestation, land tenure, law enforcement, Indigenous and local rights – requires collaborating with a wide range of actors on the ground, each of whom can effect change in different parts of the system.

2. Collaborate to achieve impact at scale

Voluntary certifications in sustainable palm oil, cocoa and timber cover just 10-20% of global production areas. As 2030 approaches, achieving results at scale is a top priority. Companies can leverage their impact through the landscape and jurisdictional approach by aligning with local institutions and initiatives, such as Mato Grosso’s state-wide Produce Conserve Include programme in Brazil.

3. Future-proof business through diversifying supply networks

The landscape and jurisdictional approach offers companies the chance to broaden their approach from supply chains to landscapes, reaching beyond individual producers to engage with a whole network of suppliers. To borrow a rainforest metaphor, the deeper and more diverse the root system of producers, the stronger and more sustainable the tree of commodity supply.

4. Reduce duplication and increase efficiency

By pooling resources and sharing knowledge, companies can save time and money while avoiding duplication of efforts. A landscape and jurisdictional approach reduces “leakage” by preventing bad actors from switching to buyers with lower standards. It also mitigates the unintended consequences of the EUDR, which might otherwise cause buyers to abandon smallholders in favour of larger, more compliant producers.

When it comes to protecting forests, collaboration between diverse actors at the landscape scale is the new direction of travel – and it’s gathering pace. With over 110 major companies already committed to a landscape and jurisdictional approach, as well as governments, NGOs and thousands of farmers in producer countries, a landscape approach offers our best chance to halt and reverse agricultural commodity-driven deforestation.

Read the full TFA report – co-published with the Jurisdictional Action Network and supported by partners Proforest and CDP – here: Company Action in Collective Efforts for Sustainable Land Use at Scale.