Mekong flooded forest landscape.
Since 2017, the Accountability Framework initiative (AFi) has worked to provide clarity and consensus on good practices for companies working to address deforestation, ecosystem conversion, and human rights issues in their supply chains. Recently, these issues have taken on even greater significance as companies are expected to play a proactive role in addressing the global climate emergency, biodiversity loss, and the Sustainable Development Goals. Regulatory mandates add a further set of considerations.
So what does this mean for companies as they work to set sustainability policies and goals that are sufficiently broad and ambitious, yet feasible to achieve?
Huma Khan, Global Communications Lead for Forests at WWF International, interviewed AFi director Jeff Milder to get a rundown of recent developments and how these pertain to the AFi’s guidance for companies engaged in the agriculture and forestry sectors.
Huma: Can you explain why the AFi provides a set of common guidelines for setting company commitments to address deforestation, conversion, and human rights issues in agricultural and forestry supply chains?
Jeff: Prior to the AFi, the asks being made of companies from different civil society organizations (CSOs) and other stakeholders were all over the place. This created challenges for companies wanting to be part of the solution. With the AFi, we have consolidated the consensus position of diverse CSOs together with leading market actors committed to sustainability all in one place. Companies can rely upon this common reference as they set commitments and put them into action.
Huma: So what does a good commitment look like, according to the AFi?
Jeff: A good commitment clearly articulates the company’s sustainability goals, both internally and to the company’s business partners and stakeholders. From the AFi’s perspective, first we ask the company to have policies that apply broadly across their entire business, covering all relevant commodities, supply chains, and business activities. Second, the topical scope should fully address deforestation, conversion, and human rights as outlined in the Accountability Framework’s first three Core Principles. Third, the commitment should provide enough detail that it can be objectively implemented and monitored. This includes the specification of a target date, cutoff date, milestones, and implementation mechanisms. Our user guide on how to write a strong supply chain policy is a good resource for companies looking to set or refresh their policies.
Huma: The AFi just issued a consensus recommendation that companies set a target date for eliminating deforestation and ecosystem conversion from their supply chains no later than 2025. Why is this important and how does it change things?
Jeff: It doesn’t change things so much as clarifies them. Within the Accountability Framework (which was published three years ago), Core Principle 3 calls on companies to publicly adopt time-bound targets to achieve environmental and social goals as quickly as is feasible, reflecting the urgency of these issues. The new recommendation elaborates upon this principle in the present context.
Current science is telling us that a rapid end to ecosystem destruction is essential if we are to avoid the most catastrophic impacts of climate change as well as ecological tipping points – such as the drying of the Amazon forest – which could spell deep hardship for entire regions and economies. The call for a target date of 2025 at the latest reflects the imminence of these risks and the important role that companies must play in addressing them.
Huma: So if a company sets a 2025 target date for no-deforestation and no-conversion supply chains, what exactly would they be committing to?
Jeff: The AFi defines “target date” as the date by which a company intends to have fully implemented its commitment or policy. Full implementation is achieved when a company has met its goal (i.e., no deforestation and no conversion) across its entire supply base and can demonstrate this through valid monitoring and verification. However, the Accountability Framework also recognizes the importance of companies continuing to engage with and support improvement processes for suppliers that cannot initially demonstrate full compliance. In such cases, full implementation by 2025 would entail advanced progress through such improvement processes in addition to robust supplier monitoring systems and ongoing actions to close any remaining gaps, such as restoration of lands converted illegally or after a cutoff date. During 2022, the AFi is developing additional guidance regarding the fulfillment of no-deforestation and no-conversion commitments in the case of such non-compliances.
Huma: Speaking of cutoff dates, what is the relationship between a target date and a cutoff date? Should companies be using both?
Jeff: The target date is the date by which a company intends to have fully implemented its commitment or policy. The cutoff date pertains to the places of origin where commodities are produced. It’s the date after which deforestation or conversion would render a production area non-compliant. The cutoff date is important for providing a clear signal to suppliers that further deforestation or conversion is not allowable. For this reason, company policies should include both a target date and a cutoff date.
Huma: Many companies are closely following the European Union’s proposal to regulate the import of soft commodities linked deforestation. How well-aligned is this regulation with voluntary commitments and multi-stakeholder guidelines from the likes of AFi?
Jeff: It is very well aligned, and that is not by accident. The good news for companies is that if they are following the Accountability Framework, they are preparing themselves very well to comply with this regulation. More specifically, the law is currently expected to be binding upon companies placing products on the EU market in 2024 or 2025 (i.e., a year or two after it is passed), which aligns well with the AFi’s recommendation of a target date for full implementation no later than 2025. The draft law also includes a 2020 deforestation cutoff date, which is the same as the cutoff date in the Accountability Framework.
Huma: Climate has been dominating the sustainability discourse lately and thousands of companies have set or are setting science-based targets for emissions reductions. How can companies make sure that their climate targets are well-integrated with their efforts around deforestation and conversion?
Jeff: For companies that produce or source agricultural and forestry commodities (that is, all companies who might use the Accountability Framework), the carbon emissions that arise from deforestation and conversion are likely to be a significant portion of their total greenhouse gas (GHG) emissions. To ensure their efforts to reduce deforestation and conversion are reflected in their climate targets, companies should set emissions reduction targets using the Science-Based Targets initiative’s (SBTi’s) new Forest, Land, and Agriculture (FLAG) guidance and account for land use change emissions using the GHG Protocol’s forthcoming Land Sector and Removals guidance. We’ve worked with the developers of both of these pieces of guidance to ensure that deforestation and conversion are defined in aligned ways, consistent with the Accountability Framework. In addition, to ensure that companies address deforestation and conversion as a key part of their emissions reductions targets, SBTi will require that companies set no-deforestation commitments with target dates no later than 2025 in order to have their FLAG targets validated.
Huma: This is also a big year for action on nature, with the Convention on Biological Diversity (CBD) meeting to set a new 10-year agenda. So I’ll ask the same question about alignment of nature targets with efforts to address deforestation and conversion in supply chains.
Jeff: While common standards for corporate nature targets are still being developed, it’s already clear that achieving no-deforestation and no-conversion supply chains will be a core element. In fact, in their initial guidance to companies, the Science Based Targets for Nature (SBTN) identified a set of initial targets companies could set immediately, without waiting for further guidance. One of those was to eliminate land use change, specifically deforestation and conversion, using the Accountability Framework. By working right now to halt deforestation and ecosystem conversion associated with supply chains, companies will be in a strong position to meet both climate and nature targets.
Huma: Are there any final thoughts you’d like to leave us with?
Jeff: Those of us who work on sustainability know that it was never meant to be a one-dimensional job – that’s what keeps it interesting! But while companies working in agriculture and forestry are being asked to consider an ever-growing set of sustainability lenses and mandates from diverse stakeholders, so many of these come back to how a company manages its supply base and its land footprint. That’s why we’ve been working behind the scenes to make sure that market and stakeholder expectations related to deforestation and conversion are well aligned with those related to climate and nature. By following the Accountability Framework’s detailed guidance to address deforestation, conversion, and human rights issues in the supply base, companies can take tangible action to address all these imperatives at once.