In February 2021, Preventable Surprises held a week-long online dialogue to set an investor agenda for biodiversity loss. In this Chatham House-rule, text-only online format, participants were invited to discuss and respond to a series of “provocations” – short texts written by leading experts, designed to yield creative thinking, test the wisdom of the crowd and challenge the status quo. We are publishing these provocations on our blog this month in an effort to broaden this conversation.
By Nathalie Walker, Director, Tropical Forest and Agriculture, National Wildlife Federation
- Commodity agriculture is the largest driver of deforestation and biodiversity loss and unchecked poses a multitude of risks, including contributing to climate change and the spread of zoonotic diseases. Cattle, oil palm, soy, cocoa, coffee, wood fiber, and rubber, are responsible for over half of all deforestation linked to agriculture. Some commodities, especially palm oil, soy and wood products in particular, have received a lot of attention which has resulted in well-developed initiatives to support ‘deforestation-free’ supply chains (such as the Forest Stewardship Council (FSC), the Roundtable on Sustainable Palm Oil (RSPO) and the Amazon Soy Moratorium). However, cattle contributes two-thirds of all agriculture-driven deforestation, yet efforts towards large-scale ‘sustainable’ beef and leather supply chains are lacking in market uptake and effectiveness.
- Few examples of supply chain interventions have evidence of the ability to have a conservation impact, because rules are weak, market share of participating supply chain actors too low, or because of leakage via indirect suppliers or other efforts to override or evade monitoring. Shortcomings can be overcome when transparency allows for the identification of weaknesses, continuous improvement of rules and standards, and by ensuring robust auditing systems are in place.
- While many consumer-facing companies have deforestation commitments and actively participate in multi-stakeholder initiatives such as commodity roundtables, coordinated efforts by investors have been lacking and action or implementation patchy. In recent years, efforts to support collective action have increased, with divestments, new policies and shareholder resolutions but overall, they have been slow to capitalize on their potential influence.
- In almost all major deforestation and biodiversity-loss hotspots, there is sufficient already-cleared land suitable for diverting expansion. In addition, low tech methods such as manual weeding, rotational grazing and crop rotation can increase productivity. Deforestation threatens agricultural productivity by reducing rainfall and increasing soil temperatures. However, uptake of improved practices is slow due to lack of upfront finance (an issue that is directly relevant to investment), skilled labor and the availability of inputs in remote areas, where ample land availability often results in expanding spatially, a simpler and in the short term cheaper option .
- How can the full costs of deforestation be brought to bear in decision-making of farmers, supply chain actors and investors?
- How could agriculture transform to meet biodiversity loss challenges? How can production meet demand without encroaching upon native habitat, by increasing productivity or making use of already-cleared degraded lands? How can supply chain actors support these efforts, through traceability and monitoring of land-use change or by other means? What are the steps needed, and what are the barriers?
- What is the role for investors in driving this change? Which actions could be most effective? How can investors both support improved production while discouraging destructive industries? Do direct land investors hold specific power in this regard?
- If the cattle sector is most responsible for deforestation, why has it received the least attention? How can international supply chain actors and investors influence meatpackers, when major markets have not shown sufficient environmental concern (most beef is destined for domestic markets in South America, or destinations where few consumer-facing companies have deforestation commitments, such as the Middle and Far East.)
- Which actions could provide the most gains in the shortest time and therefore should be prioritized?