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Surge in Brazilian beef production calls for responsible sourcing to prevent deforestation. Here are 3 best practices

Beef buyers are taking steps to mitigate deforestation risks and accelerate the food sector’s sustainable transition. Read More

(Updated on July 27, 2024)
A cattle pasture on an agricultural farm in the Amazon rainforest, which has experienced deforestation
Source: Shutterstock/Wirestock Creators

Amazon deforestation rates have fallen sharply, but that success could be eroded if major companies shifting to Brazilian beef from weather-disrupted U.S. supply chains don’t proceed responsibly.

After severe droughts across the American plains culled cattle herds last year, U.S. beef production is down to a 73-year low and prices are up considerably. To find cheaper alternatives, beef purchasers are turning to Brazil — where beef production surged to a record high in 2023.  

That trend is raising deforestation risks for those companies, since cattle production accounts for the bulk of deforestation and land conversion in the Amazon and Cerrado, two of Brazil’s most biodiverse regions. Sourcing beef from deforested and converted lands exposes companies to operational, reputational and regulatory risks, as well as systemic risks from climate change and nature loss. Investors and consumers are increasingly demanding that companies align products with global emissions reductions goals, and companies that are associated with deforestation-linked goods are under growing scrutiny. 

And regulatory risk is also compounding. 

The European Union Regulation on Deforestation-Free Products goes into effect for most companies selling into the EU bloc at the end of this year, and a Ceres analysis found dozens of companies across sectors are not prepared. It’s also particularly challenging to eliminate deforestation in beef supply chains, especially from “indirect,” early-stage suppliers because cattle often pass through multiple ranches.

With high stakes for deforestation action, and new tools to improve transparency, some beef buyers are making measured progress in three critical areas: time-bound commitments; implementable action plans; and disclosure of progress. 

Setting robust no-deforestation commitments

Time-bound commitments are a crucial first step for companies acting on their deforestation risks, but companies set commitments for eliminating deforestation linked to cattle production less often than they do for soy, palm or other commodities. These commitments should cover their entire supply chains, cover both legal and illegal deforestation and conversion, and adhere to sector-specific cutoff dates for when deforestation occurred. They should also include a 2025 target date for achieving a deforestation-free supply chain, and incorporate human rights protections for farmworkers, Indigenous peoples and local communities. 

For example, Walmart Inc., as part of its commitment to transform its key producer supply chains by eliminating deforestation and conversion of native forests and vegetation, includes establishing standards for beef shipped from South America. The company’s forest policy includes a deforestation-free target date of 2025 and cutoff date for deforestation of 2020 or earlier. It is based on the Accountability Framework’s guidance, a roadmap for ethical supply chains that protect forests, natural ecosystems and human rights. Walmart also requires its South American beef suppliers to submit farm-level data for third-party geomonitoring and verification of deforestation- and conversion-free production. 

Implementing action plans

A company’s time-bound commitment is only effective if it is implemented across its beef supply chains, including indirect suppliers. This means the company sets sourcing and procurement policies specifying supplier requirements, and it only accepts beef and other byproducts material produced in accordance with those policies. As part of implementation plans, companies need to develop mechanisms to map and trace their full supply chains. They should also monitor and verify supplier compliance, manage non-compliance, and financially and technically incentivize practices that protect forests, other natural ecosystems and human rights. 

McDonald’s has an extensive procurement policy that sets deforestation-free requirements for raw materials suppliers such as slaughterhouses and meat-packers. It also includes a system for tracking and monitoring its full beef supply chains in the Amazon region. This policy is consistent with the Monitoring Protocol for Cattle Suppliers in the Amazon, which sets the standard for deforestation monitoring across the Brazilian Amazon and includes a commitment to develop a newly released voluntary protocol in the Cerrado. 

Disclosing deforestation progress

Public disclosure of progress holds companies accountable for their commitments and allows investors to evaluate potential risk within their portfolios. Corporate disclosures should be framed against key performance indicators that directly reflect the success of implementation plans. For example, that could mean disclosing the amount of their beef supply that is traceable, monitored and verified as deforestation-free and conversion-free. It could also mean disclosing the percentage of their suppliers who comply with robust commitments.  

Carrefour discloses that nearly 90 percent of its direct Brazilian beef suppliers — on some 33,000 farms — are monitored by location and compliant with its forestry policy or have their own ambitious policy to combat deforestation. The company also cross-references its beef purchase data with deforestation maps and maps showing protected areas and Indigenous peoples’ territories across the Amazon and Cerrado. While Carrefour does not separately disclose the progress of indirect suppliers, as is recommended, it has started a pilot initiative to monitor them. And the company requires direct suppliers to monitor and report on its indirect suppliers.  

By following these best practices, companies sourcing beef from Brazil can play a crucial role in preventing the destruction of critically important ecosystems, along with accelerating the food sector’s transition to a more sustainable and resilient economy.

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