Burgess COMMENTARY

Peter Burgess

Some musings on progress around deforestation in business supply chains

Yesterday I took part in a webinar hosted by Forest Trends / Supply Change and our company, Innovation Forum.

Our brief was to discuss progress made on tacking deforestation in corporate supply chains. I made a few remarks in an attempt to offer some challenge to current thinking, and to think about where we need to go next.

So here they are below. I hope they might be of some interest to readers.

When it comes to corporate activities on preventing deforestation, we must recognize the progress made since 2011 in particular. I refer to 2011 given that seemed to me to be a seminal year, more on that here.

I recall at our first business conference on the topic in late 2014 one campaign protagonist noted that: “if you’d told me two years ago we’d be sitting here having this level of conversation I’d have asked what you were smoking”. Our forthcoming event in Singapore reflects this.

The recent Forest Trends/Supply Change data again absolutely reflects that progress. The progress, however, is so far clearly more about policies and targets than on the ground performance.

That’s understandable, but companies seeking to meet their zero deforestation targets will not want to be in the same situation as apparel and other agricultural firms.

These companies have been talking about zero tolerance of child labour for fifteen years or more, yet we still see evidence of failure every day. This is for myriad and complex reasons, but remains an ongoing “black eye” for their reputation.

Thankfully technology may play a more effective role in helping companies avoid this. But the jury is still out.

A few comments on considering where we are on preventing deforestation in corporate supply chains, and what’s needed in terms of improving our thinking on progress in the coming few years.

Innovation: Whilst the incentives for change are improving, more creative thinking is needed. This is perhaps because one could argue that NGO brand campaigns are becoming less effective. Sometimes campaigns can even backfire and their limitations become even clearer (Resolute vs. Greenpeace).

From the events and research we’ve worked on, it’s become very obvious that soy and cattle are so very different from palm oil and timber for a wide variety of reasons. Just look at sugar cane to see the differences.

The kind of pressures used to catalyse action that have worked on palm oil and timber over many years are unlikely to have the same result in those sectors beyond the Amazon.

This will present some serious challenges, and already is, if we look at how regional or local much of the beef supply is, and how places beyond the Amazon or South East Asian rainforests are harder to base awareness raising campaigners around.

Innovation in these areas is difficult and demonization of these commodities is unlikely to get the result we need. So an open question is, what kind of innovations may get us there?

Learning lessons: Recent events in SE Asia show there are serious lessons to be learned even amongst leading companies and organisations.

We should document and disseminate the engagement lessons from IPOP’s demise but also from IOI’s situation.

IPOP is said to have come about more or less by accident. It underestimated national and local/regional business political power and underinvested in ‘defence and offence”.

In the IOI case, there was a serious reaction to punishment for a lack of progress, then a huge over reaction.

So we need generally to raise awareness in boardrooms about what actions on the ground can and do mean for markets, reputation and trading ability.

How do we do this? Well, better communication in the mainstream business media may help.

CEOs seem to love publications like Harvard Business Review and Forums like WEF, so perhaps these are mediums where better coverage and conversations about risk can be aired.

Transparency vs. certification: Certification clearly has its limits. Pushing costs and a broken system of expensive audits into the supply chain and hoping for the best is no longer an option.

Yet I am concerned that the beyond certification debate has turned back into certification and beyond.

We need to much better understand the mechanisms, data and technologies that lead to transparency that enables better business AND improved sustainability outcomes, not just ticks boxes.

Nestle and other companies are making some progress here, but the shift from third party conflicted certification to useful knowledge from the ground up needs to happen much faster, if companies are to hit targets on no deforestation, and keep promises.

We need to think about certification will need to transform/adapt to aid with transparency, rather than stifle sustainable outcomes.

So looking at change needed not from business, but from the certification body side. How many more company rankings will be effective?

Taking and adapting working multi stakeholder models to scale. Can it be done?

Beyond Brazil, we need more resources to work out how to scale work globally.

A need to work much harder on transferable lessons and techniques and thinking that can deliver changes that work for governments who must manage multiple stakeholders on a fairly short term basis.

CIFOR and Forest Trends, like many others do some great work on research and promoting what we know, but brands will need to get behind these efforts much more, with time and financial support.

We also need to think about where multi-stakeholder efforts work, and where a few focused and significant actors can deliver needed change, faster.

The role of the traders still seems a little neglected to me, given how supply chains are shortening, and the traders are very much in the middle, can their influence be better used than today?

Finally, Markets. If pension funds are part of the answer, how do campaigners push long term financial institutions harder on the deforestation prevention performance of their investments, and how can companies be better rewarded by long term investors for delivering on no deforestation promises?

Norwegian leadership must hold some lessons that might be better disseminated around the financial industry and to governments to get them to consider jurisdictional-wide protections for forests.

We’ll be debating all this in Singapore on September 27-28th, at a PPT-free and discussion driven event hosted by Unilever. I hope you’ll consider joining us.

Our forthcoming events

• How business can tackle deforestation: Asia under the lens – 27th-28th September – Singapore

• How business can tackle modern slavery and forced labor – 17th October – Washington DC

• How business can engage smallholder farmers – 19th-20th October – Washington DC

• How business can better manage human rights risks – 24th-25th October – London

• Sustainable seafood supply chains – 15th-16th November – London

• Sustainable Sugarcane – 1st-2nd December – London

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