Businesses must do more to address deforestation risks

Deforestation presents operational threats to supply chains

Companies need to do more to address the threat posed by deforestation to their supply chains, according to international non-governmental organisation CDP.

In a report entitled Deforestation-free supply chains: From commitments to action, CDP reveals the business case for disclosing exposure to forest-risk commodities.
It points out that the major driver of global deforestation comes from the demand for four critical agricultural commodities: cattle products, palm oil, timber products and soy. These commodities feature in the supply chains of countless companies across sectors, varying from food to fuel.

The resulting deforestation is itself a key driver of climate change, accounting for approximately 10-15% of the world’s greenhouse gas emissions, which is equivalent to the emissions from the planet’s entire transport sector.

Some 13 million hectares of forest have been lost annually over the past decade.

CDP’s report highlights that companies are inconsistent about recognising risks and taking action. In particular, companies that are further along the supply chain are less likely to recognise operational risks to their business. For example, just 35% of manufacturers identify operational risks associated with soy even though 83% of producers see that same risk.

Meanwhile, CDP claims businesses that fail to act on deforestation risk lagging behind their competitors.

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