Commodity-Driven Deforestation

Key Takeaways

  1. Deforestation can have severe consequences on the environment.

  2. When assessing the impact of deforestation, make sure to focus on environmental impacts to contextualise the impact (i.e., assessing CO2 emissions or others). 

  3. Social impacts and the ecological impacts due to investments are covered in separate topics.

  4. Some companies source products that contribute to deforestation directly, while others produce them.

  5. Make sure to analyse the depth, breadth, and persistence of the impact. Make sure the readers can clearly identify the scale by providing the amount of deforestation that took place.

    What it is?

    95% of deforestation worldwide occurs in the tropics, a majority of which is driven by agriculture. Forests are cleared to grow crops, raise livestock, and produce products such as paper. 60% of tropical deforestation is attributed to beef, soy, and palm oil (also known as oilseeds) cultivation. Paper products are the third-largest driver of deforestation.

    Various environmental impacts result from deforestation: increased greenhouse gas emissions, drought, land infertility, and soil erosion and flooding, among others.

    The impacts on habitat destruction and biodiversity loss are treated in separate topics.


    Forests also play a critical role in mitigating climate change. They act as a carbon sink, soaking up carbon dioxide that would otherwise be free in the atmosphere and contribute to ongoing changes in climate patterns.

    Around the world, temperate, tropical, and boreal forests are being degraded and cleared. The main drivers are farming, resource extraction, logging, and urbanisation.


    Sources

    https://www.worldwildlife.org/threats/deforestation-and-forest-degradation

    https://ourworldindata.org/what-are-drivers-deforestation

    https://www.pachamama.org/effects-of-deforestation#:~:text=The%20loss%20of%20trees%20and,of%20problems%20for%20indigenous%20people

    SDG choice


    Impact assessment

    Introduction


    Other than carbon dioxide equivalent emissions from land conversion, the introduction should clearly state the environmental impact such as land and soil erosion, drought, and flooding, among others. One to two lines on this in the introduction will suffice.

    Ideally, the geographical context of where those activities are taking place should be discussed, i.e., if the core analysis discusses the impact of a company regarding deforestation or ecological devastation in Indonesia, then the introduction should provide context to the ecological devastation that Indonesia has experienced specifically.



     = > If the company is sourcing beef, oilseeds, or forestry/paper products:

    These concerns companies that are consuming these commodities to produce their products and services.

    The core analysis should capture the company’s impact concerning the broader issue by providing the following information:


    • How much of the commodity did the company source? This is likely to be reported in tonnes.

    • Disclose the amount sourced sustainably (if any), and remember to be critical of certification schemes, whether it is by the RSPO, FSC, PEFC, GRSB...etc.

    • Provide an estimate for the amount of land deforested in hectares to produce the commodity.

    • Evaluate the environmental impacts: how is the climate affected?

    • Try to be as specific as you can: where is the deforestation taking place, and since when?

    • How many suppliers does the company have? How large are those companies? How much do they purchase/consume per year? Specificities per supplier are a plus.



    = > If the company is producing beef, oilseeds, or forestry/paper products:

    Again, these concerns companies, most likely suppliers producing these commodities, sell them in the relevant markets.

    The core analysis should capture the company’s impact in relation to the broader issue by providing the following information:


    • How much of the commodity did the company source? This is likely to be reported in tonnes.

    • What is the company’s market share in the commodity industry?

    • Disclose the amount sourced sustainably (if any), and remember to be critical of certification schemes, whether it is by the RSPO, FSC, PEFC, GRSB...etc.

    • Provide an estimate for the amount of land deforested in hectares to produce the commodity.

    • Evaluate the environmental impacts: how is the climate affected?

    • Try to be as specific as you can: where is the deforestation taking place, and since when? How much do they produce per year?



    No matter what the company’s activities are, you may go back to the Logical Model if needed.

    To help readers assess the impact scale and value, you should contextualise the impact. For instance:

    • How extensive is the company’s deforestation compared to the industry is it part of? (Learn more about comparisons here).

    • In evaluating the impact on climate, how much CO2 could these forests absorb if they were still there and how much CO2 is released by cutting them down?



    Also, ask yourselves the following questions:

    1/ The breadth of the impact

    • Is the impact local, national, or global?

    • How many species or people are concerned?

    2/ The depth of the impact

    • Is the biodiversity or people concerned deeply affected, or does the issue just marginally impact them?

    • Are the changes brought by the issue profoundly changing society or the planet?

    3/ The persistence of the impact

    • How long would the impact described last for? Months? Years? Decades?

    • How reversible is the impact described in the impact analysis? Can it be easily stopped/extended?


    Find more about evaluating the scale of the impact in Step 5: Assess scale and value.


    Helpful Sources

    Forest 500: an NGO which reports and assesses the deforestation policies of the largest players in commodity production, processing, manufacture, and/or retail and ranks them.


    RSPO and other certifications are certainly a good step for companies to take. However, it’s essential to be critical of this certification (like any). These reports shed some light on the issues associated with certificates: 


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