Report: Prioritising anti-deforestation in supply chains can help companies save up to US$80b


Firms in timber, palm oil and cattle industries are off track to meet deforestation commitments at COP26.

Kuala Lumpur, 25 May 2022 - The Accountability Framework initiative (AFi) and CDP's latest research have shown that companies cannot afford further delay in tackling deforestation across supply chains, with forest-related risks identified at almost US$80 billion by 211 disclosing companies.

Only 36% of disclosing companies globally (245/675) have public company-wide no-deforestation or no-ecosystem conversion policies. Only 13% of companies have commitments to no-deforestation/no-conversion aligned with good practice.

Most companies do not have sufficient traceability (77%) or monitoring systems (74%) throughout their supply chains to implement commitments made or assess progress against them.

Thomas Maddox, Global Director, Forests, CDP, stated that the large scale production of agricultural commodities is the primary driver, and companies should significantly ramp up efforts to combat deforestation.

"Large scale production of agricultural commodities is the primary driver. But societal acceptance is shifting, generating significant business risks for all involved. Companies are starting to respond, but they are far from where they need to be," said Maddox.

While the report underlines companies from SEA were taking more meaningful actions when compared to their global peers, John Leung, Director, Southeast Asia and Oceania, CDP, noted that companies need to push harder and implement strategies to ensure pledges made in COP26 are duly met. John Leung, Director, Southeast Asia and Oceania, CDP, said, "It is great to see the progress being made by companies in Southeast Asia; however, this report demonstrates whilst meaningful action is being taken, companies still need to go a lot further and faster to ensure pledges made by across Southeast Asia at COP26 will be met. In conclusion, progress made by companies demonstrates that a deforestation-free future is possible but requires companies to make significant adjustments to their business practices.

With the data suggesting that the cost of responding to identified risks was US$6.7 billion, a minuscule amount compared to the damages that are valued at almost US$80 billion, it can potentially save companies a great deal of money if they take immediate action.

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