500 companies and banks could stop the destruction of tropical forests. They are failing, report warns

‘Ignorance has long since ceased to be a defence’

Ten years on from a global pledge to ensure the survival of tropical forests, few strides have been made in doing so, according to a detailed new assessment.

In 2014, governments and businesses signed the New York Declaration on Forests which committed to achieving zero net deforestation by 2020.

In its wake, the nonprofit Global Canopy began tracking 350 companies and 150 financial institutions behind the greatest impacts on forests.

The theory was if this group - including leading fashion and beauty brands, furniture companies, and food and beverage conglomerates which use commodities from forests in their supply chains - took action, then deforestation would be dramatically reduced.

Now, after ten years and 1.3 million data points, the Forest 500 project found that only “pockets of progress” have been made and tropical forests still face extreme threats.

Shockingly, 30 per cent of companies on the list don’t have a single, publicly-available deforestation commitment, Global Canopy reported on Tuesday.

Among the report’s key findings were:

- Nearly two-thirds (63 per cent) of companies with forest protections have not published adequate evidence of how those commitments work in practice;

- Nearly two-fifths (37 per cent) are staying under the radar, publishing a deforestation commitment for one, but not all, of the commodities they are exposed to;

- 85 per cent of banks and financial institutions do not have a policy for all the four highest-risk commodities which drive two-thirds of tropical deforestation.

The new report also sounded the alarm on the “total blind spot” over human rights abuses. Conflict, violence and exploitation are part-and-parcel of deforestation and land conversion in many places, particularly for Indigenous peoples.

Yet, only 1 per cent of companies had published a commitment to human rights in relation to deforestation.

The Forest 500 contains some cause for optimism when it comes to palm oil, once a driving force of deforestation particularly in Indonesia. Just over half (55 per cent) of companies with a palm oil policy now report that at least half of their volume does not cause deforestation or land conversion.

On the other hand, far from enough is being done on cattle, the largest single driver of deforestation. Some 70 per cent of companies that use leather, and 65 per cent who use beef, have not set a single deforestation commitment.

The world lost a football pitch of tropical forest every six seconds in 2019.

Cutting down and clearing trees is responsible for 11 per cent of global greenhouse gas emissions, meaning that deforestation is having a devastating impact on the world’s shot at reining in dangerous temperature rise.

“There is no solution to climate change without ending deforestation,” Nikki Mardas, Global Canopy’s executive director, said in a statement.

“Yet, after a decade of being in the spotlight and numerous engagement attempts, it is remarkable that this group of highly-exposed companies has failed to produce a single publicly available deforestation commitment. Ignorance has long since ceased to be a defence.”

For the Amazon rainforest, currently in the grip of extreme drought, there is no time left to lose. Some 76 million acres of primary forest were destroyed in the past 20 years - an area greater than the size of Italy, according to an Amazon monitoring programme.

Scientists warn that the Amazon is approaching a tipping point that could trigger large-scale “dieback” - the spread of permanent degradation across the entire biome.

At Cop28 in Dubai last year, world leaders appeared to be getting to grips with this dire threat. For the first time, the international community unanimously agreed to include a pledge to halt and reverse deforestation by 2030 in the final Cop pact.

The Forest 500 report sets out an action plan for how to meet this target, just six short years away.

One of its core recommendations was that allowing corporate and financial players to make voluntary commitments would no longer cut it. Global Canopy called for new regulations, or toughening those already in place.

The European Union Deforestation Regulation (EUDR) will come into force on 30 December 2024, and prevent companies from trading products linked to deforestation in the bloc.

While this is good news, the experts call for those rules to also apply to financial institutions and not just businesses. The 150 financial institutions analyzed for Forest 500 provide a total of $6 trillion to the 350 companies also on the list.

In the UK, while the 2021 Environment Act would ban the import of commodities linked to illegal deforestation, the government has dragged its feet on secondary legislation needed to actually give it teeth, Global Canopy said.

In the US, a bipartisan group of lawmakers introduced a bill in December, which would ban products that come from commodities off illegally deforested land. However, with fraught divisions on Capitol Hill, passage into law is far from guaranteed.