COP27 started with the announcement of a plan to end deforestation in soy, palm oil and beef but experts think it's without backbone or bite
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This year's COP27 climate negotiations started on a sobering note for me. The world's largest commodity traders that control much of the global beef, soy and palm oil supply have once again chosen short-term profits over the future of our planet (and by extension, that of their own businesses).
You might remember last year's announcement from Cargill, ADM, Bunge et al, in which they promised to finally work together as an industry to eliminate commodity-driven deforestation and align their supply chain emissions with a 1.5C climate pathway. The latter requires going beyond forests to end all native vegetation conversion, which is notably absent in the trader's work. The commodity companies pledged to publish a roadmap on how they would achieve these goals within a year.
And so they did. Unfortunately, that's the only promise they kept since the roadmap itself fails to deliver the expected commitments to end deforestation and align their business practices with Paris climate goals.
In response to the roadmap, WWF's US president and CEO Carter Roberts wrote that it "demonstrates progress on palm oil and steps forward on beef but falls well short of what is needed on soy and falls short on expectations that the roadmap delivers what's needed for a 1.5-degree future".
When writing about the announcement last year, I identified five critical areas to watch that could provide guidance on how seriously commodity traders would take their promise. Most of them turned out to be pretty spot on, and sadly, now stand out as big missing pieces:
1. Inconsistencies in the definition of deforestation: The roadmap uses different meanings of eliminating deforestation throughout. While some action areas pledge to get rid of illegal and legal deforestation, others don't specify. And if traders are going for zero illegal deforestation instead of zero gross deforestation (including legal and illegal), then the roadmap isn't more than just reiterating national laws. In my eyes, that certainly doesn't merit a big COP announcement. The roadmap's definitions also bring up a geography question. While the palm oil commitment requires zero deforestation in all sourcing regions, soy and cattle mainly focus on South America's Amazon, Cerrado and Chaco regions. This bears the risk of displacing conversion to other regions if demand doesn't budge
2. Missing action on the conversion of other ecosystems: Conversion of native ecosystems for commodity production has long moved beyond the world's forests. Grasslands, shrublands, peatlands and other carbon and biodiversity-rich ecosystems are also being plowed up too. Any company with serious sustainability ambitions needs to also stop these practices, but the roadmap doesn't go there. It limits action to forests and peatlands for palm oil. For cattle, action ends with forests. And for soy, it acknowledges the need for no-conversion policies, but the companies couldn't agree on a definition, let alone strategy. Instead, it's taken them a year to agree on carrying out a risk assessment, which is superfluous since the risks of soy-driven land conversion have long been established.
3. Not identifying a bold time horizon: The roadmap might make some progress on the what but hasn't sufficiently addressed the when. When do no-deforestation and no-conversion practices need to be implemented, and what are the baseline years for comparison? While the roadmap has 2025 plans for ending deforestation, it lacks cut-off dates for land conversion. Even 2025 seems late and might trigger a destructive land-clearing race over the coming three years.
4. Absence of strategies to involve indigenous groups and address other human rights issues: A document search for "Indigenous" and "human rights" delivers zero results. Let's just say that's not a good sign for a problem so intricately linked to local communities and ecosystem guardians.
5. Commitments to transparency and traceability lack clarity: Reporting appears as a more robust area in the document, referring to respected industry frameworks such as the NDPE Implementation Reporting Framework, CDP and Science-Based Targets initiative (SBTi). But it's unclear whether all these steps will be mandatory or are just recommended and how they would interact with roadmap goals. For example, SBTi seems to have stricter no-deforestation requirements than this roadmap, so if SBTi reporting is required, then why aren't the goals aligned? In terms of traceability, if traders truly wanted to be transparent about their progress and help along their investors and customers in their sustainability journeys, they should start disclosing annual data on the percentage of deforestation and conversion-free commodity volumes each year. Since many of them have missed previously made deforestation commitments, why should investors and downstream customers accept another three-year black box and trust that there will be a different outcome this time?
So, there's a vast gap between what environmental NGOs and climate scientists ask companies to do and what they plan to do. According to WWF's statement, Amaggi and Louis Dreyfus are two companies that have signed up to the industry roadmap but have separate commitments that "go above and beyond" the roadmap's goals. I imagine the negotiations must have been frustrating for them, but I hope that they were able to increase the group's collective level of ambition.
Still, it begs the question: Why is this the best the industry can do? I wish I had a better answer, but the reality is that beyond the sustainability world, there's still no consensus of sustainable practices being in businesses' best interest. These companies' CEOs are swayed by today's profitable markets rather than longer-term investments in resilient supply chains.
"Both exporting soy for animal feed and protein from Brazil is just a way to make big money," Jason Clay, WWF's senior vice president for Markets, told me. The vast majority of Brazil's beef and soy exports go to China, which, according to Clay, remains a lucrative market with little environmental conscience. "This leads to a situation where traders simply do not want to address the issues and don't have to as long as they stick together." It's a global problem that requires global solutions.
Brazil's newly elected president Luiz Inácio Lula da Silva, better known as Lula, is one light at the end of this dark and depressing tunnel. He could help Brazil pursue a path where the rehabilitation of degraded land enables continued agricultural growth without further deforestation or land conversion.
An analysis of the potential of such rehabilitation indicates that land already converted to pastures could be used more intensively for cattle and cropland to boost productivity and meet the projected growth of demand for both soy and beef. But land won't rehabilitate itself. It requires investment, farmer outreach, training and so forth. Continuing agricultural expansion through new land clearing has been the easier and cheaper path for commodity traders. Lula could help channel investment into large-scale rehabilitation initiatives and, simultaneously, strengthen regulation and enforcement of forest and grassland protection policies.
So, on the bright side, let's thank Brazilian citizens for electing a progressive leader and hope he can get new initiatives off the ground quickly and reactivate a once well-oiled forest protection system. But on the "what the hell side," knowing that commodity trading companies still aren't even choosing what might be a slightly less profitable middle ground and are instead burning the planet with their eyes wide open is leaving me even more outraged. I thought we'd be doing better than this by now.
[Want to learn more about how to accelerate your company's journey to a climate-positive future? Check out VERGE Net Zero, a free online event, Dec. 6-7, online.]
This article first appeared at GreenBiz.com.
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