Companies profit, forests fall: everyone pays the price

In a pivotal year for climate and nature, Global Canopy’s 11th annual Forest 500 report, “Companies profit, forests fall: everyone pays the price”, presents an unsettling reality: while a handful of companies have made strong commitments for all their forest risk commodities, the vast majority are still failing to act on deforestation risks in their supply chains.

Forest 500 identifies the companies most exposed to deforestation risk and annually assesses them on the strength and implementation of their commitments on deforestation, conversion of natural ecosystems and associated human rights.

This year, the scope of the assessments has expanded; the report now covers three new commodities, all forest types and an additional 150 companies. Global Canopy continues to assess the 150 financial institutions that provide funding to the Forest 500 companies, and will release the findings later this year.

This year’s company findings

The leaders

The leaders are a small minority of 16 companies (3%). They have strong commitments for all their forest risk commodities and evidence of adequate implementation. These companies have shown that it is possible to assess risks, trace supply chains and take concrete steps towards eliminating deforestation.

The late majority

In the late majority sit 316 companies (63%), which have partial commitments and/or weak implementation. Companies in this group tend to make commitments for high-profile commodities like palm oil or timber while ignoring beef, which is the single biggest driver of global deforestation. They might also make strong commitments but score poorly on action. This limited approach hampers progress and undermines global deforestation goals.

The laggards

The 168 laggards (34%) don’t have a public deforestation commitment. 24 of these are persistent laggards – they’ve never made any kind of deforestation commitment after more than a decade in the Forest 500. Their inaction jeopardises their long-term sustainability and the future of our forests.

“The leaders recognise the reputational and future business risks of deforestation. They monitor their supply chains, engage suppliers and bring them into compliance on deforestation and human rights. Regulators need to build on these achievements, not water down existing regulation.”

Emma Thomson, Forest 500 Lead at Global Canopy

Inaction on deforestation is putting everyone at risk 

Last year was the 10th consecutive hottest year on record, marked by severe wildfires, widespread flooding and droughts. There is also the threat of reaching a tipping point where major forests like the Amazon “die back”, which scientists have warned could have far-reaching global implications for biodiversity, carbon storage and climate change.  

Climate events impact agribusiness disproportionately and threaten food security, with lower rainfall and shorter growing seasons already affecting soy yields. But the evidence drawn from over 300,000 data points assessed by Forest 500 clearly shows that too many companies are falling short on deforestation – prioritising short-term profits over their own long-term interests.

“In these turbulent times, it is sometimes important to restate the obvious: ending and reversing deforestation is a triple win for climate, nature and people. It is also the bedrock for economic stability in regions where drought linked to deforestation is already causing turmoil.”

Niki Mardas, Executive Director at Global Canopy

“There’s a reason why practically every country in the world has signed up to the 2030 target of ending and reversing deforestation,” Niki Mardas continued. “The leaders in the Forest 500 show how companies that have their strategic and operational act together can take steps to stop unacceptable harms today, while setting themselves up to flourish into the future.”

The way forward

As the world prepares for COP30 in 2025 in Belém, the Forest 500 report calls for urgent action from companies. 

Companies are exposed to reputational, compliance and business risk from deforestation. These risks can be reduced by setting strong deforestation policies with robust and transparent mechanisms for implementation and reporting.

Compared with a decade ago, the tools, data and guidance available to tackle deforestation, ecosystem conversion and associated human rights abuses have become far more sophisticated and easier to use. Leading companies have shown meaningful action is possible. 

Read the report to discover the critical next steps all companies must take.

Download the report

This insight was originally published on the Forest 500 website.