Soy traders failing to stop deforestation, new scorecard shows

The first ever Soy Traders Scorecard highlights failure to address deforestation

By Helen Burley

Corporate Performance Comms Lead

Global soy traders are failing to take adequate steps to ensure that the soy they sell is not linked to the destruction of forests or other important ecosystems, according to a new Soy Traders Scorecard, jointly produced by Global Canopy and WWF.

The findings in the Scorecard also highlight a lack of transparency in soy supply chains, making it difficult for buyers to identify where the risks lie. This will make it difficult for companies seeking to comply with proposals in the UK Government’s draft Environment Bill to address deforestation through due diligence measures.

Over 8 million hectares of native vegetation across the globe have been ploughed up for soy fields since 2001.

“The soy traders represent a crucial bottleneck in soy supplies – with just a few traders dominating global trade. If these traders were serious about tackling deforestation in their supply chains, and more transparent about the risks, it would be much easier for manufacturers and retailers to guarantee that the products on supermarkets shelves were deforestation-free.”

Global Canopy’s Forest 500 project manager and co-author of the Scorecard, Emma Thomson

The 22 traders were selected based on their exposure to deforestation risks – with most sourcing soy from the Cerrado and Atlantic Forest in Brazil, Bolivia’s Chiquitania and the Gran Chaco which spans four countries in South America, as well as North America’s Great Plains. Together the 22 traders represent 69% of global soy exports.

They were assessed through a questionnaire on their approach to addressing deforestation and conversion in their soy supply chains. Nine traders – Amaggi, Bunge, Cargill, COFCO, ADM, VIterra, Louis Dreyfus Company, CHS and CJ CheilJedang who together trade more than half of global exports – returned the questionnaire. The remaining 13 companies were assessed on the basis of information they make publicly available.

None of the 22 traders were found to be showing leadership in tackling deforestation, ecosystem conversion or human rights abuses in their supply chains.

Seven of the nine traders which responded to the survey had a commitment to deforestation-free soy, but the majority of these traders only applied their commitment to soy sourced from the Amazon region. Just three had a target date to achieve their commitment, with two aiming for deforestation-free supplies by 2025 and one by 2030.

Global Canopy’s latest Forest 500 assessment identifies 49 manufacturers and retailers who have made commitments to ensure that their soy supply chains are deforestation and conversion-free, with 32 of these companies setting a target date of 2024 or earlier.

“The companies that source products containing soy – including fish, meat and dairy from animals raised on soy – cannot deliver on their commitments if the soy traders do not step up and ensure that they are trading deforestation-free soy. And companies based in the UK and Europe cannot carry out effective due diligence on their supply chains if trading companies do not make key information on deforestation risk available.”

Emma Thomson

None of the traders who responded to the survey required their suppliers to commit to halt deforestation or conversion, which would help encourage them to ensure all supplies, not just those being supplied to the trader, are deforestation-free. And none required their suppliers to have a human rights commitment or to secure the Free, Prior and Informed Consent of indigenous peoples and local communities for new land acquisitions and developments across all of their operations, creating a risk that abuses may be happening elsewhere.

In their report, Global Canopy and WWF call on soy traders and soy buyers to have robust commitments in place to eliminate deforestation from their supply chains, with soy buyers urged to work together to push for change from producers and traders.

Company efforts should be reinforced by government measures to ensure action by all companies. The Scorecard calls on consumer governments to adopt and enforce legislation to ensure that agricultural commodities and derived products associated with deforestation, conversion or human rights abuse do not enter their markets.

With legislation in the pipeline in the UK and Europe, buyers need to increase the pressure on traders to take these steps.

But Global Canopy is urging the UK government to strengthen the due diligence requirements in the draft Environment Bill, which it says do not currently go far enough.

Due diligence should include all deforestation (legal and illegal), all conversion of natural ecosystems and include human rights’ abuses, as well as measures that apply to the financial institutions providing finance to companies in forest-risk supply chains.

See the Scorecard here: http://soyscorecard.panda.org/traders