Supply-chain governance is needed to avoid deforestation

A major reduction in global deforestation is needed to mitigate climate change and biodiversity loss. Recent private sector commitments aim to eliminate deforestation from a company's operations or supply chain, but they fall short on several fronts. Company pledges vary in the degree to which they include timebound interventions with clear definitions and criteria to achieve verifiable outcomes. Zero-deforestation policies by companies may be insufficient on their own to achieve broader impact due to leakage, lack of transparency and traceability, selective adoption, and smallholder marginalization. Public-private policy mixes are needed to increase the effectiveness of supply-chain initiatives aimed at reducing deforestation. We review current supply-chain initiatives, their effectiveness, the challenges they face, and identify knowledge gaps for complementary public-private policies.

No abstract

New supply chain interventions offer promise to reduce deforestation from expansion of commercial agriculture, as more multinational companies agree to stop sourcing from farms with recent forest clearing. We analyzed the zerodeforestation cattle agreements signed by major meatpacking companies in the Brazilian Amazon state of Pará using property-level data on beef supply chains. Our panel analysis of daily purchases by slaughterhouses before and after the agreements demonstrates that they now avoid purchasing from properties with deforestation, which was not the case prior to the agreements. Supplying ranchers registered their properties in a public environmental registry nearly 2 years before surrounding non-supplying properties, and 85% of surveyed ranchers indicated that the agreements were the driving force. In addition, supplying properties had significantly reduced deforestation rates following the agreements. Our results demonstrate important changes in the beef supply chain, but the agreements' narrow scope and implementation diminish outcomes for forest conservation.

SignificanceDemand for agricultural commodities is the leading driver of tropical deforestation. Many corporations have pledged to eliminate forest loss from their supply chains by purchasing only certified “sustainable” products. To evaluate whether certification fulfills such pledges, we applied statistical analyses to satellite-based estimates of tree cover loss to infer the causal impact of a third-party certification system on deforestation and fire within Indonesian oil palm plantations. We found that certification significantly reduced deforestation, but not fire or peatland clearance, among participating plantations. Moreover, certification was mostly adopted in older plantations that contained little remaining forest. Broader adoption by oil palm growers is likely needed for certification to have a large impact on total forest area lost to oil palm expansion.