Sustainable Soy
The Challenge
Rising global demand for soy, primarily as animal feed, has resulted in global production doubling over the last two decades, partially met by yield improvement but also by production expansion, leading to conversion of forests, savannahs and grasslands in certain producing regions. Supporting responsible soy production and minimizing negative impacts on native vegetation, natural habitats and local communities is a priority for LDC.
Our Approach
As non-producers, we work with a wide range of stakeholders and partners, within the industry and beyond, to promote sustainable soy production, processing and trade, aiming ultimately to address global climate change pressures and protect natural ecosystems.
What we do
- We promote responsible soy production and the elimination of deforestation and native vegetation conversion for agricultural purposes within our own soy supply chains;
- We actively promote progress toward responsible soy production via sectoral initiatives and collaborations;
- We explore innovative solutions to incentivize land conversion beyond legal requirements, in partnership with producers and other partners.
Our Policy
Our Soy Sustainability Policy stipulates our commitment to support sustainable soy production and sourcing.
In compliance with this policy, we commit to:
- Eliminate engagement in, or financing of, deforestation or conversion of native vegetation of high conservation value throughout our soy supply chain;
- Respect the rights of local communities;
- Comply with all eight International Labour Organization fundamental conventions;
- Respect internationally and nationally designated protected areas;
- Not endanger threatened species;
- Abide by rigorous anti-bribery and corruption standards.
Our policy and commitments are fully in line with our Human & Labor Rights Policy and our Supplier Code of Conduct.
Sourcing Responsibly
We collaborate closely with our suppliers and key stakeholders to uphold compliance with our Soy Sustainability Policy, while supporting the adoption of sustainable production practices.
Our Priorities
Supply Chain Risk Assessment
In Latin America, LDC predominantly exports soybeans from Brazil, Argentina and Paraguay. With the support of Proforest and The Nature Conservancy, we developed a risk-based deforestation- and conversion-free (DCF) methodology that guides our deforestation and conversion risk assessment and mitigation across all commodity supply chains, including soy.
Following this methodology, we identified a number of priority municipalities in South America where further supply chain traceability, deforestation and conversion due diligence and monitoring are required, as follows:
- Argentina: 340
- Brazil: 345
- Paraguay: 61
Reinforcing Traceability and Due Diligence
Recognizing traceability as a prerequisite for responsible sourcing, we require soy traceability to national, sub-national, facility and eventually farm level, in accordance with corresponding deforestation and conversion risks. In priority regions, we strive for full traceability to farm level for direct sourcing, and to facility and eventually farm level for indirect sourcing.
Traceability of indirect sourcing has been particularly challenging, given lack of awareness and commercial confidentiality concerns among indirect suppliers. To address these concerns in Brazil and Paraguay, we have deployed third-party platforms for indirect suppliers to upload farm polygons and conduct deforestation due diligence. We are looking to expand such partnerships in Argentina.
Our Progress in 2024
Brazil soy verified as DCF
Argentina soy verified as DCF
Paraguay* soy verified as DCF
* Due to a high percentage of indirect sourcing in Paraguay, we are addressing a significant traceability gap to enable deforestation due diligence.
We apply environmental and social risk screening on suppliers at purchase, to avoid any purchases from non-compliant suppliers.
In Brazil, we apply the following criteria:
- No deforestation after 2008 for farms in the Amazon biome, in accordance with the Brazilian Soy Moratorium, of which LDC has been a signatory since its inception in 2006;
- No embargo for deforestation from the Brazilian Institute of the Environment and Renewable Natural Resources (IBAMA);
- No overlap with conservation units;
- No overlap with indigenous and traditional peoples land;
- No listing on Brazil Ministry of Labour and Welfare “dirty list”;
- Compliance with the Green Grain Protocol of Pará State, which bans financing or sourcing of soy associated with illegal deforestation.
In addition, we conduct field audits on selected suppliers in high-risk regions, to verify their compliance with our environmental and social criteria. Based on audit results, we discuss with suppliers their performance and identified gaps, if any, to support their continuous improvement.
Incentivizing Native Vegetation Conservation
We believe that preserving native vegetation is not only essential for environmental and biodiversity purposes, but also for maintaining the long-term productivity and climate resilience of farms. This is a view shared by many of the farmers we work with. However, farmers need to receive proper compensation and incentives to invest in forest conservation beyond what is legally required. This approach is key to mitigating deforestation and conversion risks and requires collective action beyond individual companies’ supply chains.
In Brazil, we have made initial progress in deploying farmer incentives for voluntary conservation of native vegetation in the form of cash payments or biological crop protection products, in collaboration with external financial partners. We are investigating additional ways to unlock barriers to, and aggregate at-scale incentives for, farmers’ conservation efforts. These are a combination of crop price premium, preferential financing rates and direct conservation payments to producers. We expect to further pilot these models in collaboration with downstream value chain partners, financial institutions and other funding partners.
Supporting Sustainable Farming
In Brazil, Argentina and Paraguay, we have been actively providing support to soy producers to implement more sustainable agricultural practices. Working in collaboration with local partners, we provide technical assistance, systemic training and peer learning opportunities on a range of environmental, health and safety, and social criteria.
To date, we have expanded our sustainable soy programs and successfully certified over 430,576 hectares of soybean production areas, in accordance with LDC’s Program for Sustainable Agriculture and RTRS standards, resulting in a tangible sustainability premium for soy producers. We plan to further roll out these programs in 2025 and beyond.
Collaboration and Partnerships
We believe that collaboration among all soy value chain participants and stakeholders is key to achieve at-scale transformation toward sustainable soy production. We therefore actively engage in key partnerships and sectoral initiatives, such as:
LDC has a long-lasting relationship with global environmental nonprofit The Nature Conservancy (TNC). TNC and LDC have been collaborating to develop our DCF soy supply chain strategy, as well as cutting-edge tools to achieve this goal. We have expanded our engagement with TNC to design and deploy regenerative agriculture programs and effective incentive mechanisms for forest conservation.
LDC has been a member of the Brazilian Soy Moratorium since its inception in 2006. Through this concerted effort, LDC and other industry actors monitor soy suppliers and do not purchase soy from lands in the Amazon biome that were deforested after July 2008. This collaborative platform has made a significant contribution to curbing deforestation attributable to soy cultivation in the Brazil Amazon.
LDC is a founding member of the Soft Commodities Forum (SCF), convened by the World Business Council for Sustainable Development (WBCSD). This is a global platform for leading soft commodities companies to collectively improve soy supply chain transparency and support sustainable soy transformation in priority landscapes of Brazil’s Cerrado biome. Through the SCF’s Farmer First Clusters Initiative, LDC has been contributing to a combination of solutions to address soy-driven deforestation and conversion, in four key Brazil Cerrado landscapes: Western Mato Grosso, Southern Maranhão, Western Bahia and Tocantins. Please see the latest SCF annual report for more details.
LDC is signatory to the Agriculture Sector Roadmap to 1.5° initiative, launched in 2021 by leading agribusinesses, to develop and implement a sectoral roadmap for halting forest loss and native vegetation conversion from agricultural production, consistent with a 1.5°C pathway.
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