Corporate action takes root on deforestation

Adapted from State of Green Business 2019, published by GreenBiz in partnership with Trucost, part of S&P Global.

The lungs of the Earth are under assault, and their well-being will worsen without bold recovery plans from businesses and governments. That’s the conclusion of the latest report by the Intergovernmental Panel on Climate Change (IPCC), which paints a bleak picture of the health outlook of the world’s forests — and the plants and animals that depend on them — if global warming exceeds 1.5-degree Celsius from pre-industrial levels.

“Emissions would need to decline rapidly across all of society’s main sectors, including buildings, industry, transport, energy, and agriculture, forestry and other land use,” the report stated.

Scientists long have championed forest protection as an important climate strategy because trees act as sponges of carbon emissions. For many industries, conserving forest land also reduces a variety of risks, from ensuring a sustainable supply of raw materials and water to preventing wildfires and air or water pollution that increase business costs. A good number of companies — including in paper products, fashion, technology and print media — have invested directly in buying forests for preservation or funded other efforts to keep forests’ ecology intact, such as restricting logging and researching alternative raw materials. 

But our planet continues to see larger and larger bald spots where trees used to stand. In fact, 2017 was the second-worst year on record for tropical forests — 39 million acres of trees disappeared from countries such as Brazil, Democratic Republic of Congo and Indonesia, according to Global Forest Watch.

In an October report, Global Forest Watch calculated that 8 percent of the world’s GHG emissions come from tropical forest losses, which release stored gases when trees are cut down or burned. To put this in perspective, the environmental group showed that deforestation would rank third behind the United States and China as a major emitter if it were a country. Yet government spending around the world on forest protection accounted for less than 3 percent of the money for climate mitigation.

Human activities — clearing trees for farming, raising livestock and mining — largely are responsible for the disappearance of forests worldwide. These remain major forces of destruction, particularly in countries such as Colombia, which saw a 46 percent jump in tree losses from 2016 to 2017. That spike coincided with the government’s peace treaty with Revolutionary Armed Forces of Colombia rebels, which ceded control of the Amazon forests that used to be off limits to logging and other commercial developments.

Increasingly, wildfires and powerful storms are threatening the health of forests as the warming climate contributes to more droughts and intense hurricanes. The most comprehensive climate assessment by the U.S. government, released in November, pinpointed this trend for the country’s 130 million acres of forests, or 33 percent of its land:

It is very likely that climate change will decrease the ability of many forest ecosystems to provide important ecosystem services to society. Tree growth and carbon storage are expected to decrease in most locations as a result of higher temperatures, more frequent drought and increased disturbances.

Preserving forests isn’t a new idea for corporations, to be sure, as many companies have signed up for tree-planting projects (PDF) as a philanthropic charity, employee-engagement or brand-building effort. Forest protection projects also have offered a source of carbon credits for businesses looking to meet voluntary or mandatory goals for reducing emissions, such as Pacific Gas and Electric’s cap-and-trade program in California. But the level of concern and engagement over tree loss is reaching new heights.

One of the biggest challenges for businesses seeking to address deforestation is tracing the journeys of the pulp and paper they use from forest to factory. To solve that, a group of companies including Eileen Fisher, H&M, Kering and Marks & Spencer, and funded a project by a Canadian nonprofit, Canopy, worked to create an online map of the locations of ancient and endangered forests from around the world. Canopy launched ForestMapper in November to enable businesses to track their supply chains and avoid buying materials from endangered forests. Global Forest Watch also offers an online tool to track forest clearance and reforestation occurrences around the world.

The fashion industry is particularly interested in forest management because it relies on wood pulp to make a commonly used fabric, rayon. Even an electronics giant, heavily reliant on paper packaging, is on board. In September, Apple revealed its plan to plant and preserve 27,000 acres of mangrove forest in Colombia. The tech leader first expressed interest in sustainable forest management in 2015 when it announced projects to buy forests to conserve and implement sustainable logging and management plans in the United States and China.

Sometimes, it takes pressure from environmental activists to force companies to invest in forest protection. Greenpeace’s campaign against one of the biggest palm oil traders in the world, IOI Group, caused the Malaysian company to lose big customers, including Nestlé and General Mills. The latter eventually agreed to stop deforestation on its land and monitor suppliers to ensure they, too, invest in forest preservation. Increasingly, other large companies with complex supply chains are monitoring and pressuring their suppliers against using materials from endangered forests or otherwise contribution to deforestation. Walmart launched such an initiative last year.

The 2015 Paris Agreement — and the dire IPCC report — has put a sharper focus on the need to work urgently to prevent deforestation and replant in decimated woods. That call to action has prompted some large-scale efforts. Nine foundations, including the Ford Foundation, The Rockefeller Foundation and the ClimateWorks Foundation, recently pledged (PDF) $459 million to restore and expand forests worldwide through 2022.

Organizations such as the United Nations and the World Bank have been drafting policies that the international community labels as Reducing Emissions from Deforestation and Degradation, or REDD+. Those policies provide financial incentives for governments, businesses and communities to preserve forests. All these public and private efforts certainly will help, considering that just a year ago, a report showed that government subsidies and private spending in agriculture and other land-use development totaled $777 billion since 2010, compared with the $20 billion spent during that period for stopping deforestation and reducing forest emissions.

Closing that gap will require significantly more money and commitments. And companies, from product makers to financial institutions, need to play a greater role to protect the forests and let the planet breathe more easily again.

Key players to watch

Apple — while increasing the use of sustainable materials in products and packaging, it has taken an unusual step of buying forests and working with nonprofits to implement sustainable management (PDF). That has led to projects in the United States, China and, most recently, Colombia.

H&M — apparel giant made an early commitment to stop using wood pulp from ancient or endangered forests for making fiber, a pledge emulated by others including VF Corp, Levi Strauss, Stella McCartney, Ralph Lauren and Guess.

Kimberly-Clark — has become a champion against clearcut logging. It adopted materials from certified and sustainably managed forests after Greenpeace pressures more than a decade ago, and continues to invest in forest protection and alternatives to virgin wood fiber.

L’Oreal — the cosmetics giant monitors its suppliers, particularly of palm oil, to help ensure its products aren’t linked to deforestation. Like Unilever, it received a high score from the CDP for forest protection.

Unilever — the company has supported the development of forest mapping and monitoring technology and presses its vast network of suppliers to disclose how and where they source raw materials, particularly palm oil.