When Will Corporations Take Deforestation Seriously?

Published on:
by Eric Burdon

During the buildup of the 27th UN climate summit, there was a lot that captured our attention. The biggest was the Coca-Cola sponsorship for the whole event. As a result, a number of significant events went under the radar, one of them being a protest in September in New York City.

Over Climate Week NYC, several demonstrators gathered outside of the Colgate-Palmolive headquarters, during which the CEO of Mars Inc., Grant Reid, spoke of the latest tracking report on an issue that was discussed in COP27: rampant deforestation.

The tracking the company presented was marginal, which is thematic to many corporations' track records on this matter. Last year, 21 consumer goods corporations - Mars, Unilever and Nestlé included - formed the Forest Positive Coalition

As hopeful as that is, it’s undermined by the fact that in 2010, 400 companies promised soy, palm oil, beef, pulp and paper would have “zero net deforestation” by 2020. That didn’t happen. This is on top of even more joining the New York Declaration on Forests in 2014, not even close to hitting their benchmark goals.

What we’re all seeing here is companies' willingness to disclose this information, but are doing very little to change their behaviour. A broader example of this is through an UN-commissioned study that was released in July 2022. It showed that the agriculture, forest and land sectors had a fivefold increase in corporations and that those corporations made commitments to net zero.

Out of the 148 that made that pledge, nine of them had made strong progress and were slowing down deforestation. Nine. 

So Why Can’t They Take It Seriously?

With the only significant global development being the loss and damage fund at COP27, it’s clear more pressure needs to be put on businesses and governments. In the case of corporations, we know they can adapt quickly. One example is the palm industry's deforestation, where companies finally started to make dramatic changes after public pressure.

While the palm industry still has plenty of problems still, it’s clear corporations can be serious about the planet. However, there are some big roadblocks that corporations struggle to deal with.

First Is Habits 

The biggest roadblock comes down to human nature. When you’re asked to change what you’ve been doing for years, it’s going to be difficult in various ways. When companies started to make pledges to fight deforestation in 2010, corporations made the shocking revelation that they had no idea how to fight it. 

Back in 2010, there were situations where companies knew they weren’t supposed to do something, however, they weren’t able to figure out an alternative. And so, instead of finding an alternative, which was difficult in its own way, key decision-makers defaulted to human nature and made little change.

While our greatest strength may be adaptation, we must first learn to accept that change is indeed the only constant. 

Second Is Suppliers

Suppliers also made it very difficult for corporations to get on board since a cornerstone for halting deforestation would be ensuring suppliers were actually ceasing such practices. Similar to corporations, suppliers would be faced with the same decisions, i.e. being told what not to do, but without being offered creative solutions to replace current practices.

Suppliers are perhaps placed under more pressure, since if they don’t abide by strict mandates, they could lose contracts and revenue. This, obviously, creates more incentive for suppliers to lie about their business practices.

And what’s worse about this practice is that the complexity of corporate supply chains makes auditing and enforcement challenging. More suppliers means more resources budgeted for tours, audits, inspections and investigations to take place.

All of this also becomes moot if one supplier works to stop deforestation while another continues that business practice. A mechanism needs to be in place that ensures all suppliers in a specific geography stop together, and that mechanism would need to supply appropriate incentives. 

In the end, even though suppliers are responsible, corporations enable behaviour through the perception of demand. Equally, embedded operational relationships in a given region should be nurtured, not abandoned, as the latter would create an opportunity vacuum into which less regulation-centric players could enter. 

Lastly Governments & Public

We, as the general public, are ultimately responsible for this as well. We’ve enabled these major corporations to continue doing business as usual and not change their way. It’s not until there is extreme public pressure that things can begin to change. That pressure needs to start with an acceptance that it is easier to make purchasing decisions based on convenience and price. This is a consumer demand-driven problem.

That said, one other significant pressure is from governments themselves. Though they’ve been very slow, governments over the years have passed laws to protect certain areas of forests and also written legislation that would force the industry to change course.

All of this falls back to the previous points, where corporations and suppliers have way more incentive to keep doing what they’re doing and are disincentivized to take this issue seriously or change. Like an addict on drugs, telling an addict to stop doesn’t help. What does help is when there are serious roadblocks, pressures, or something of unavoidable magnitude that would force someone to change course.

It’s Our Turn

The reason corporations can’t take this seriously ultimately falls onto our shoulders. If we start to take it seriously, that in turn influences our behaviour and how we interact with brands in the future around this issue. With enough people, corporations will start to notice and make changes little by little. As much as good intentions and statements are, we need good actions right now.

Those good intentions start, perhaps, with the question of whether you actually need something, or simply want it. When will you take it seriously?

More opinion on environmental and other ESG topics is available here


Featured Article Headlines

EU and ISSB reporting standards: key features, differences, and interoperability

EU and ISSB reporting standards: key features, differences, and interoperability

10 ESG Mistakes Made by the Anti-ESG Movement

10 ESG Mistakes Made by the Anti-ESG Movement

Stewardship and ESG Engagement: Paving the Way to Achieving the UN’s Sustainable Development Goals

What Is Anti-ESG?

What Is The SASB Materiality Map?

ESG Standards in 2023: Everything You Need To Know

What does the Carbon Disclosure Project Do?

What is the Climate Bonds Initiative?    

What does an ESG disclosure score mean?

Is MSCI owned by Morgan Stanley?