Forest 500, a Global Canopy project, focuses on commodities such as palm oil, soy, cattle and timber products.
“Nestlé reported that 75% of their soy was compliant with their policy in 2017. Nestlé also has a commitment to trace their soy supplies back to the farm. In 2017 the company reported that 78% of its soy was traceable back to the crushing facility.
“Nestlé monitors suppliers for compliance with its policy, engages with non-compliant suppliers and reports both total and compliant volumes of soy,” according to the authors of the Forest 500 study.
The total volume of soy Nestlé purchased in 2018 was 477,000 tons. Most of the soy it procures is for use in pet food.
However, the review did not give Nestlé full marks for its soy commitment on the basis that, then, it did not have a deadline for its traceability commitment, nor did it report on involvement in any collaborative actions in soy supply chains and nor did it share details of its soy suppliers or specific sourcing regions.
A spokesperson for Nestlé told us today, though, that it disclosed a list of its soy suppliers and its sourcing regions in February this year.
Helen Burley, contributing author, Forest 500 report, told FeedNavigator the latest review was based on assessments made in the last quarter of 2018. "We will be completing the 2019 report at the end of this year, and so Nestlé should score points for disclosing in the next assessment."
The 10 companies with the highest scores for their soy commitments in the review are all either signatories to the Soy Moratorium or the Cerrado Manifesto Statement of Support (SoS). They include ADM, Mars Inc, Marks & Spencer Group PLC, Bunge Ltd, Unilever PLC, Louis Dreyfus, Wal-Mart Stores Inc, JBS, and Arla Foods.
None of the companies assessed disclosed a list of soy suppliers or sourcing regions, noted the authors.
“In comparison, a quarter of the companies with a forest-related commitment for palm oil disclosed supplier lists, the concessions sourced from, or both. Disclosing these details shows a willingness to be transparent, helps others to hold companies to account, and can help companies themselves track non-compliance in their supply chain.”
The reviewers also urged companies to make sure their soy linked deforestation commitments cover all the biomes that they may be sourcing from, including the Chaco in Argentina and Paraguay.
Conversion-free soy sourcing pledges
Louis Dreyfus and Chinese commodities trader, COFCO, were the only companies to have made a commitment to conversion-free soy sourcing in the 2018 assessment, found the publication.
Louis Dreyfus has committed to eliminate engagement in, or financing of deforestation throughout its supply chain, and to conserve biomes proven to be of high ecological value, such as the Cerrado, Brazil, with the intent to discourage and eliminate conversion of native vegetation.
Its conversion commitments, stressed the report, go beyond deforestation commitments and include all native vegetation types, not just forests.
“This is particularly important when considering biomes with high ecological value, such as the Cerrado, that may not be included in most companies’ definitions of forests.”
However, the authors said the trader drops points for its soy commitment because it lacks key actions on implementation. “The company does not report on any efforts to monitor or engage with suppliers, or provide details of any plans to do this, it does not have a grievance mechanism, and does not publish supplier lists or detailed sourcing regions.
COFCO also is downgraded slightly because the commitment made is by the subsidiary, COFCO International, rather than the parent, and only applies to Brazil.
COFCO has no commitment to trace its supply chain, does not have a grievance mechanism and does not publish sourcing information, said the assessors.
Financial institutions assessed
The Forest 500 study also evaluated the 150 financial institutions identified as having the largest financial exposure to the 350 companies assessed for their activities in forest-risk supply chains. Institutions were assessed on their financing policies for companies in these supply chains. It said none of the top 10 including Rabobank, Credit Suisse, and Deutsche Bank achieved a top score.
“Deforestation, and the associated human rights’ abuses, could create a material risk for the companies involved, and as a result, expose the investing institution, and the rest of the supply chain to that risk. Financial institutions need to recognize these risks and can mitigate them by requiring action from the companies they finance.”
The 2018 Forest 500 assessment shows that companies are not on track to meet the ambitious 2020 zero deforestation commitments agreed by many companies, and that there is an urgent need for more progress to be made.
Global Canopy urges the Forest 500 companies to:
- Recognize the role that they play in the supply chains that are driving deforestation and maintain global ambition to tackle deforestation beyond the current 2020 target.
- Assess their exposure across forest-risk commodities, and set and implement strong commitments that address each commodity.
- Strengthen commitments by building detailed action plans including steps to implementation and how they will monitor and deal with non-compliance.
- Back up commitments and action plans with clear reporting of implementation efforts, difficulties and successes.
- Learn from advances in specific commodity supply chains, understand best practice in both commitments and implementation in each sector, and apply these to their other commodities and contexts.
It said that financial institutions should set their own targets and financing policies to eliminate deforestation, and associated human rights abuses, from their lending and investment.
Publisher: Global Canopy: Oxford, UK.
Lead author: Sarah Rogerson, contributing authors and reviewers: Helen Bellfield and Helen Burley