Insight From the
Tropical Forest Alliance

For many people working on the forests and commodities agenda, the 2021 United Nations Climate Change Conference of the Parties (COP26) in Glasgow was a pivotal moment.

Globally, 141 countries stepped up to collectively halt and reverse forest loss by 2030 through the Glasgow Leaders’ Declaration on Forests and Land Use, and more than 30 leading financial institutions – with US$8.7 trillion of assets under management – committed to remove commodity-driven deforestation from their portfolios by 2025.

Furthermore, in one of the strongest signals of ambition by the food and agriculture sector, the CEOs of 13 of the world’s largest agricultural commodity companies, including Louis Dreyfus Company (LDC), signed a joint statement to develop a Roadmap for enhanced supply chain action consistent with a 1.5°C pathway by COP27.

These, along with a slew of other announcements, signaled an unprecedented recognition of the role of the food and land use sector in the climate transition.

Just five months later, Global Forest Watch announced their annual update on global forest loss and deforestation, and it was not good news. In 2021, the tropics lost 11.1 million hectares of tree cover. Of this, 3.75 million hectares was loss within tropical primary rainforests, which is equivalent to a rate of 10 football pitches a minute, and resulted in 2.5 GT of CO₂ emissions, equivalent to the annual fossil fuel emissions of India. Coupled with the stark reality that if we don’t halt deforestation by 2030 at the very latest, with significant reductions by 2025, we will not limit global warming to 1.5°C, these trends underscore how important it is to translate commitments into immediate, urgent action.

The stakes have never been higher, and the COP27 agri-commodity roadmap represents a significant opportunity for agri-commodity companies to work together to eliminate deforestation linked to the production of agricultural commodities. It signals to stakeholders that they are serious, as a group, about making meaningful, rapid progress on the elimination of deforestation and conversion in their supply chains, above and beyond what they have been able to do individually over the past decade. This is one of the most significant contributions that the signatories can make towards ensuring we stay in line with a 1.5°C pathway.

Together, the signatory companies largely control the global trade of soy, palm oil, cattle and cocoa, operate at the gates of farmers producing these commodities and understand what producers need, in order to choose to keep native habitat intact. This is why stakeholders expect the 13 signatory companies to be specific and ambitious about their individual and collective implementation plans and targets, coupled with radical transparency in reporting progress.

LDC’s recent commitment to eliminate deforestation and conversion of native vegetation of high conservation value for agricultural purposes from all its supply chains, by the end of 2025, is among the most ambitious in the group of companies, and sets an example of what is not only possible, but necessary. What the audience at COP27 will want to know is, what is the path to get there?

Expectations are also high for accelerating corporate climate disclosure. For the food and agriculture sector, Scope 3 emissions from supply chains can represent 80% or more of total emissions, and much of this can be attributed to agriculture and land use changes. Few companies, however, are comprehensively disclosing scope 3 emissions, and even fewer have set science-based emission reduction targets that include these emissions. Achieving the goals of the Paris Agreement requires businesses to develop and implement comprehensive climate transition actions plans.

TFA is delighted to be supporting the development of the COP27 Roadmap, in particular because of its emphasis on collective action. Ambitious, meaningful individual corporate action is essential, but to realize forest positive sector transformation it must be coupled with collaboration, with governments, other supply chain actors, the finance sector, civil society and producers. Commodity-driven deforestation is a truly complex problem. No single corporate commitment or policy can resolve this challenge, and it cannot be treated in isolation, as an environmental issue or a supply-chain problem, because it sits at the heart of the challenges facing global food systems. Keeping forests standing is linked directly to sustaining rural livelihoods, ensuring food security for a growing global population and supporting economic development.

Agri-commodities companies like LDC have a key role to play in bringing these complex agendas together, including working with others to mobilize finance to create incentives for farmers to adopt sustainable practices to conserve and restore by offering not just environmental, but economic benefits too.

As we approach COP27 in Egypt in November 2022, hopes and expectations are high, for companies and governments alike to demonstrate not only increased ambition, but concrete, measurable progress that puts the world on a 1.5°C trajectory.