The Palm Scribe

Palm Oil Companies Lead Progress in Reducing Deforestation: Report

Companies in the palm oil supply chain are leading progress on deforestation among businesses using or producing the seven commodities most responsible for the majority of agriculture-related deforestation, a report issued by a non-profit charity running a global disclosure system showed.

The report titled  ”The Collective Effort to End Deforestation: A pathway for Companies to Raise their Ambition,” issued this week by not-for-profit charity CDP, looked at data disclosed by 553 companies dealing with the top seven deforestation commodities — palm oil, timber products, cattle products, soy, natural rubber, cocoa and coffee. CDP runs a global disclosure system for investors, companies, cities, states and regions to manage their environmental impact.

“Compared to all other commodities, companies reporting on palm oil have made the most progress on deforestation, by far,” said the CDP report. 

The report pointed out that nearly all, 98 percent, of the 187 companies that disclosed on their production or use of palm oil and related deforestation management, were taking at least one industry-accepted measure to address deforestation while only four companies were reporting none.

It said that more companies were demonstrating progress towards eliminating palm oil-related deforestation, even outperforming companies in timber product supply chains. Companies operating in the cattle products market and soy supply chains continued to trail behind.

However, the report also underlined that among the various crops, palm oil had both the highest speed of overall land expansion, the highest share of expansion into forestland and a large share of expansion on peatland. Seventy percent of palm oil expansion between 2008 and 2015 occurred on forestland while 18 percent were on peatland.

Companies in the palm oil supply chain also had the highest levels of rigorous no-deforestation commitments, at 20 percent, the most comprehensive risk assessments, at 25 percent, and had integrated forest-related issues into all parts of their long-term strategic business plans, at 57 percent.

“Companies in the palm oil value chain are also leading on setting and fulfilling targets – the largest proportion of companies to have set or achieved targets to either source 100 percent certified no-deforestation compliant commodities or trace 100 percent of commodities to at least municipality (at 18 percent),”it added.

The same companies were also ahead in terms of engaging with direct suppliers, with 25 percent providing them with financial or technical assistance and 41 percent engaging beyond first tier suppliers through supply chain mapping or capacity building.

Companies reporting on palm oil also had the highest levels of participation in jurisdictional approaches, at five percent, among companies reporting on the four commodities driving the majority of tropical deforestation. Among all commodities, this is the second highest rate, after cocoa.

Palm oil its the most productive oil producing crop in terms of tonnage per acreage with its closest competitor, soy, lagging far behind Palm oil and its derivatives have a variety of uses from edible products and cooking to non-food products such as cosmetics or detergents or as a biofuel.

CDP said that more and more companies were beginning to recognize the benefits of acting on deforestation. 

In spite of the challenges in 2020, the number of companies disclosing data through CDP on how they are managing deforestation had increased by 27 percent from the previous year.  In 2020, 687 companies reported through CDP on the steps they are taking to eliminate deforestation from their operations and supply chains.

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