Deforestation-Driven Reputation Risk Could Become Material for FMCGs

Many fast-moving consumer goods (FMCG) companies have publicly committed to a 2020 deadline to end deforestation in their supply chains. However, it is becoming increasingly clear that most FMCGs will not meet this deadline. NGO campaigns against individual FMCGs and benchmark studies that show the differences in implementation of zero-deforestation commitments indicate increasing reputation risks …

The Chain: SLC Agrícola Clears 1,355 Hectares of Cerrado Vegetation Despite Customers’ Zero-Deforestation Commitments

Between March 7, 2019 and May 5, 2019, SLC Agrícola, the largest listed soybean producer in Brazil, cleared 1,355 hectares (ha) of native vegetation at its Fazenda Parceiro farm. This farm, which was exclusively used for soy production in 2018, is located in the municipality of Formosa do Rio Preto, at the border of the …

Brazilian State of Tocantins: A Hotspot for Cerrado Deforestation

The Brazilian state of Tocantins is the latest hotspot for soy- and cattle-related deforestation. In 2018, more land was cleared there than in any other state of the Brazilian Cerrado, a large tropical savanna biome that covers more than 20 percent of Brazil. Overall Cerrado deforestation rates have declined in recent years, but Tocantins continues …

The Chain: Cargill May Still Face Reputation, Business Risks Despite Updated Zero-Deforestation Policy for Soy

Major commodity trader Cargill, a privately held company based in the United States, recently updated its plans to eliminate deforestation in all of its agricultural supply chains by 2030. While the company’s aim to bolster its sustainability policies for soy is a positive development, it is unclear as to how the company will reach this …

The Chain: Limited Response from Financial Institutions to U.S. Senators’ Call to Tackle Deforestation

A group of U.S. Senators recently sent letters on February 4, 2019 to investors and asset managers urging them to take into account deforestation risks in their portfolios. The Senators, led by Brian Schatz, a Democrat from Hawaii, asked the financial actors to commit to pressuring companies in agricultural supply chains that do not adequately address …

The Chain: Soy Traders Adopt Key Transparency Measures to Counter Deforestation Risks

Major agricultural commodity traders that operate in Brazil have agreed to a set of principles and transparency measures in an effort to reduce deforestation driven by soy production in Brazil’s Cerrado. As part of the Soft Commodities Forum, companies such as ADM, COFCO International, Glencore, Louis Dreyfus, Bunge and Cargill said last week that they …

The Chain: COFCO Warns of Business and Reputation Risks in Agricultural Supply Chains

COFCO, a major Chinese company active in agricultural markets, released a statement in late January at the World Economic Form (WEF) in support of shoring up “sustainable” practices and curbing deforestation in commodity supply chains. COFCO’s CEO, Jun Lyu, warned industry that failure to curb climate change could lead to poor crop production and limit …

The Chain: Investor Engagement Prompts Aramark to Adopt No Deforestation Policy

Faced with investor pressure, food service provider Aramark announced January 23, 2019 that it plans to put into effect a no-deforestation commitment by 2025. As a result, Green Century Capital Management withdrew its shareholder resolution it had filed with Aramark. The company, headquartered in Philadelphia, says it will implement a No Deforestation, No Peat, No …

The Chain: Rising Brazilian Beef Exports to China to Test Sustainability Commitments

Higher Brazilian beef exports to China are likely to test sustainability commitments in both countries. China (including Hong Kong) imported 44 percent of Brazil’s total beef exports in 2018, compared to 40 percent in 2017 and 35 percent in 2016. Brazil, the largest exporter of beef in the world even though most of the country’s …

The Chain: Bunge’s Updated Sustainability Policy Does Not Address Legal Deforestation

Major agricultural commodity trader Bunge updated its commitment to sustainability along its grain and oilseeds supply chains last month in an effort to further curb deforestation. While Bunge has made progress in its sustainability strategy, its update falls short of expectations that the company would address legal deforestation and provide more details about its measures …