The forests scene the world over is depressing, quite depressing indeed. The ones plundering forests are not complying with international benchmarks, and the impunity with which the ravaging of forests is under way will leave one frustrated and in utter despair.
There are as few as 250 companies across countries that are engaged in this unfettered loot, and the ones from India come a cropper when it comes to performance.
The Global Canopy Programme (GCP), which evaluates and ranks 500 organisations around the world that are responsible for the commodities driving deforestation, has found that only seven companies have scored top points in implementing policies to protect forests, and most governments that commandeer forest resources are lagging way behind goals. And all five Indian companies in the list have fared disastrously in both performance and transparency.
The five Indian companies that have a bearing on driving deforestation are: Amul, Godrej Group, JVL Agro Industries, Kamani Oil Industries and Emami Ltd. The first four managed one out of five points, the last scored a nought. All five trade in palm oil, soya and paper.
So, what’s Global Canopy Programme (GCP) and Forest 500?
The Global Canopy Programme (GCP) is a tropical forest think tank working on the scientific, political and business case for safeguarding forests as natural capital that underpins water, food, energy, health and climate security for all. GCP works through its international networks – of forest communities, science experts, policymakers, and finance and corporate leaders – to gather evidence, spark insight, and catalyse action to halt forest loss and improve human livelihoods dependent on forests.
GCP’s Forest 500 ranking identifies, ranks, and tracks governments, companies and financial institutions worldwide that together could virtually eradicate tropical deforestation. The ranking is based on the premise that the majority of tropical forest loss and degradation is driven by the production of a few globally-traded ‘forest risk’ commodities: palm oil, soya, beef, leather, timber, and pulp and paper. These move along complex supply chains – from producers, to traders, processors, manufacturers and retailers – ending up in over 50 per cent of packaged goods in supermarkets worldwide. This is what consists the hidden deforestation economy.
In September 2014, leaders from governments, major multinationals, indigenous communities and civil society signed the New York Declaration on Forests (PDF), which spells out ambitious commitments to end deforestation, including by eliminating it from the production of agricultural commodities by 2020. This mirrors an earlier pledge by the Consumer Goods Forum, a global alliance of 400 companies with combined sales of $3 trillion, to achieve net zero deforestation supply chains by 2020. Similar commitments have been made within the financial community, most notably through the Banking Environment Initiative.
To measure progress, the GCP developed rigorous methodologies to identify and rank governments, companies and financial institutions based on their public policies and potential impacts on forests related to forest risk commodities. The Forest 500 assesses 50 jurisdictions (25 forest countries, 15 trading countries, 10 subnational forest jurisdictions); 250 companies from different parts of the supply chain; 150 investors and lenders; and 50 other powerbrokers.
Analysis highlights include:
- Tropical deforestation is being addressed to varying extents by governments in tropical countries and regions, yet a more comprehensive approach with support from the most important trade partner countries is needed.
- The countries included in the Forest 500 represent nearly 90% of the world’s tropical forests and almost 90% of the tropical deforestation that occurred in the last decade. Yet few countries have so far developed zero or net zero deforestation goals that echo the ambitious goals of the New York Declaration on Forests.
- On average, Latin American countries, including Colombia, Brazil and Peru, ranked highest
- Lower scoring countries include Madagascar, in part due to its high forest loss between 2000 and 2012, and Nigeria, for its relatively low forest policy and governance scores.
- The most developed forest policies in commodity importing countries, such as those in the Netherlands and Germany, tend to be commodity specific and industry led, rather than government, initiated.
- Crucial importing countries such as China, which is responsible for importing over 22% of the value of all forest risk commodities, and India, a key importer and consumer of palm oil, achieved low scores.
- As a group, the 250 companies are falling short of adopting policies that ensure a speedy transition to a zero deforestation economy by 2020, but individual actors are making good progress.
- The consumer-facing home care, and cosmetics and personal care industries are shown to perform best, whilst the animal feed industry lags behind other sectors.
- Companies with higher revenues score significantly better than those with lower revenues. In particular, once companies surpass annual revenues of US$10 billion, policy scores increase sharply, averaging nearly double that of companies below the ten billion threshold.
- Publicly-listed companies score more than 50% higher than privately-owned companies and those with other governance structures.
- The location of company headquarters is found to be a key differentiator with the best scoring companies headquartered in North America, slightly outperforming those in Europe and Latin America, while companies in the Asia-Pacific region lag behind.
- Companies in some of the most critical forest risk commodity importing countries, such as China and India, score well below the average, with Russian companies at the bottom of the table.
- Investors are in a unique position to ensure a rapid transition to a zero deforestation economy, yet most have poorly developed sustainable investment policies.
- None of the investors assessed have a commitment to overall zero or net zero deforestation for forest risk commodities.
- Of those assessed, sovereign wealth funds and hedge funds scored very low for their sustainable investment policies, while banks achieved higher scores – proving that progress is possible within the investment and lending community.
- Assessments show that investors headquartered in Europe tend to have more developed sustainable investment policies than those headquartered in North America and the Asia-Pacific region.
