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We can no longer ignore deforestation hidden in the goods we buy

Insight / 14 Apr 2021

New research shows the extent of the EU’s tropical deforestation footprint

New deforestation figures have again sent alarm bells ringing but it is easy to forget that your shopping may be driving deforestation. The agricultural commodities linked to tropical deforestation can be found in every aisle in the supermarket, from yoghurt to pet food. And despite zero-deforestation promises from retailers and manufacturers – deforestation rates have increased again.

Now new research, carried out by Trase (our project in partnership with SEI) for WWF EU, shows the true extent of Europe’s consumption patterns on tropical forests.

Between 2005 and 2017, imports to the EU (including the UK) were associated with 3.5 million hectares of deforestation – an area the size of the Netherlands.

The destruction of those forests for agricultural land was in turn linked to 1.8 million tonnes of emissions of climate changing CO2, as well as the loss of vital natural habitats.

We cannot continue to drive this destruction of nature – it is wrecking our climate, destroying biodiversity and draining water supplies.

The European Union knows as much, yet demand from EU member states remains second only to China in driving this expansion into forests, reaching ever deeper into the Brazilian Cerrado and the Chaco in Argentina and Paraguay.

Soy, mainly used in animal feed, has been the biggest culprit in the EU’s deforestation footprint over this period. Soy is particularly linked to the loss of forests and other important ecosystems in Brazil’s unique Cerrado. It is closely followed by palm oil, with the expansion of plantations on peatlands not only driving forest loss but also releasing carbon emissions from the peat as it is drained and destroyed.

Average imported deforestation (ha) by product and country of origin between 2005-2016

New regulations targeting imported deforestation

Voluntary deforestation commitments by companies and governments, such as the 2014 New York Declaration on Forests that aimed to remove deforestation from supply chains by 2020, have failed. To address this failure, the EU are now planning legislation to reduce the impact of its consumption on forests overseas. This is likely to include a due diligence requirement for businesses to ensure imported products are not associated with deforestation.

Similarly, the UK has outlined proposals to include measures in the Environment Bill that would require companies to carry out due diligence to ensure imports were not linked to illegal deforestation. It seems a small ask – that companies should ensure their products are legally sourced, yet many currently do not. But the UK government must also address the legal deforestation hidden in supply chains – in Brazil alone, 88 million hectares of forest is not protected by the law and could be legally cleared.

It is crucial that both the UK and EU’s proposals extend to legal deforestation, and that they cover important non-forest ecosystems which are also at risk of being destroyed.

While the EU and UK are important markets for forest risk commodities, they are dwarfed by China. Complementary measures that support producer countries address deforestation, for example technical assistance and funds for producers to utilise existing degraded land, will be critical to avoid shifting the problem to other consumer markets.

Time for companies to act

With legislation coming down the road, there are clear incentives for companies to act on removing deforestation from their supply chains.

Global Canopy’s Forest 500 assessments reveal that two thirds of the 350 most influential companies in forest-risk supply chains have already made a deforestation commitment for one of the commodities in their supply chains, although only a quarter had made a commitment that covered all of the forest-risk commodities in their supply chains. That means some companies ensure the palm oil they source doesn’t cause deforestation, but the soy they use still could. Unless we see action across all supply chains, zero deforestation cannot be achieved.

Financial institutions must also play their part. Just 28 of the 150 biggest providers of finance for companies in forest-risk supply chains have a policy on deforestation – and many of those banks and investors with policies continue to finance activities linked to deforestation. Ensuring they are covered by the proposed legislation is a critical first step to accelerating action by banks and investors.

More than a million people responded to the EU consultation demanding new legislation to protect tropical forests and other important ecosystems. Consumers clearly do not want deforestation in the goods they buy.

WWF’s new report clearly shows the extent of deforestation driven by consumer markets. With legislation in the pipeline, it is time for companies and financial institutions to read the writing on the wall and take steps to ensure their activities are deforestation-free.

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