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While corporate commitments to zero-deforestation are increasing, the gap between commitment and progress continues to widen. We consider some of the challenges and explore the potential of carbon finance projects to support a faster pace of change.
The 2016 results from the Global Canopy Programme’s (GCP’s) “Forest 500”1 revealed that zero-deforestation targets for 2020 and 2030 are unlikely to be met at the current rate of progress. “Despite growing momentum in the number of commitments across key supply chain actors, the Forest 500 reveals that many of these commitments lack the teeth to make meaningful change in the sustainability of commodity production,” said Sarah Lake, Head of the Supply Chains programme at GCP2. This challenge of commitment versus progress is critical to the credibility of corporate pledges, and carbon finance projects offer a means to close the gap, enabling rapid and effective progress against zero-deforestation goals.
Tools vs. outcomes: moving beyond certification to track impact
Popular commodity-based certifications include the Roundtable on Sustainable Palm Oil (RSPO) which covers around 21% of global palm production3, the Forest Stewardship Council (FSC) and/or the Programme for the Endorsement of Forest Certifications (PEFC), certifying 10-15% of global managed forest areas4, and the Round Table for Responsible Soy (RTRS).
Standards and certification schemes establish industry best practices, standardised metrics for monitoring performance, and, in some cases, consumer labelling. While research has suggested that certification can also help companies achieve operational improvements, resulting in greater volume and quality of yields, certification is not the solution to the zero deforestation holy grail. Many schemes deal with the “already converted” and while certification helps to define best practice it is a tool to meet a commitment rather than an end point in itself. To meet the ambitious goal the focus must be on outcomes and the ability to track the impact of interventions at a project based level, while also identifying opportunities to deliver even greater scale and impact.
Carbon finance forestry projects enable corporates to get precise and verified measurement of results. Projects are monitored on an ongoing basis and results are independently verified to measure the impact of the project. To meet international standards, these projects must provide assurance against typical forestry project risks. This includes demonstrating that forest protection activity has not led to more deforestation nearby (leakage), and showing how any planted trees will remain standing for at least 30 years (permanence), along with a buffer to cover any trees lost through disease or fire. In order to quantify emission reductions the carbon accounting process will monitor and verify the number of hectares of rainforest protected or the number of trees planted. In addition, organisations like the Climate, Community and Biodiversity Alliance (CCBA) validate additional positive impacts of carbon finance projects, such as the types of flora and fauna in the project area - and therefore the impact on biodiversity – and the value of fruit and nuts trees to households.
Public vs. private: put business in the driving seat
While NGOs are often viewed as the “critical parent” to business, the public-private dynamic and greater collaboration is essential for deforestation impact at scale. By holding business to account, the public sector can promote good governance of forest assets and drive progress in the private sector. Likewise business has the authority to engage governments and other public sector actors, demonstrating the economic value of sustainable approaches. Carbon finance forestry projects provide an opportunity for business to continue demonstrating this leadership position and maintain momentum by offering an immediate, cost-effective solution to take proportionate action and make progress against zero-deforestation commitments and other climate action goals.
Exclusion vs. engagement: how to manage those that don’t deliver
While many in the public sector may feel that with the volume of supply chain data available, business should be exercising its market power to exclude destructive companies within its supply chain, businesses want to engage, enable and educate suppliers to make change happen. If exclusion is the primary approach it delivers many other negative consequences including the risk of leakage to other markets and exacerbating smallholder poverty.
Engaging suppliers for change is critical but is a long-term activity that can take time to show positive results. In the meantime, business can show immediate action and impact through carbon finance projects. By their very nature, these projects will only be successful if local communities are engaged and understand the value of conserving forests. Showcasing this approach to suppliers offers the chance for replication, focusing on long-term behaviour change by adopting sustainable practices and livelihood alternatives that avoid deforestation.
In Madagascar, the Makira REDD+ project has engaged youth groups as the most influential in driving change and ensuring the Makira Natural Park is conserved for the long-term. One group has converted an existing rubbish dump into a fish pond to provide an alternative protein source for households to reduce the rate of poaching of lemurs, and they have learnt how to grow and process cacao as a new income source. In Kenya, the Meru and Nanyuki Community Reforestation project works with smallholder farmers to plant trees on their land and provides training on conservation farming to enhance land productivity and access to food, and create new income streams from fruit trees and beekeeping to improve financial security. In Indonesia, the Rimba Raya REDD+ project has developed a community-based agroforestry programme as a means to provide communities with an alternative source of income and food that avoids forest exploitation. This includes the construction of two community poultry farms and a series of training courses with local residents to build understanding and long-term commitment to the activity.
As of March 2016, there were 579 deforestation-related commitments from 366 companies. According to Forest Trends’ 2016 Supply Change report5, most time-bound commitments target 2020, but the number of commitments without a target date is increasing. Despite these pledges, public information on progress toward achieving these goals is only available for one in three commitments. For those companies struggling to make inroads, carbon finance projects may deliver a solution to bridge the gap while more systemic changes deliver results. If you’d like to discuss how carbon finance can help you achieve your zero-deforestation commitments, improve livelihoods and resilience for supply base communities, and engage your staff and customers through high impact action, please contact us.
1Global Canopy Programme, 2016. Sleeping Giants of Deforestation: The Companies, Countries and Financial Institutions with the Power to Save Forests, The 2016 Forest 500 Results and Analysis. Global Canopy Programme, Oxford, UK.
2Sustainable Brands, 2016, Report: 2020 Deforestation Goals are Unlikely to be achieved – companies need more help. Available online: https://goo.gl/zPJAxL (accessed 12th December 2016).
3Roundtable for Sustainable Palm Oil (RSPO), 2016, Impacts. Available online: http://www.rspo.org/about/impacts (accessed 26th April 2016).
4Forest Stewardship Council (FSC), Facts & Figures. Available online: https://ic.fsc.org/facts-figures.839.htm (accessed 26th April 2016); Programme for the Endorsement of Forest Certifications (PEFC), Facts & Figures. Available online: http://www.pefc.org/about-pefc/ who-we-are/facts-a-figures (accessed 22nd May 2016); Food and Agriculture Organisation of the United Nations, 2015, Global Forest Resources Assessment. Available online: http://www.fao.org/forest-resources-assessment/en/ (accessed 22nd May 2016).
5McCarthy, Ben, Supply Change: Tracking Corporate Commitments to Deforestation-free Supply Chains, 2016. Washington, DC: Forest Trends, 2016.