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Blog Post
15 January 2018
Author: Linda Hansson

Supply chain transparency: A green light to sustainable consumption?

Photo by Miguel Pinheiro/CIFOR

Oil Palm factory – harvest.

Do you know where the palm oil on your breakfast peanut butter sandwich comes from? Can you tell if it comes from a former pristine rainforest? What if I tell you that it soon may be possible to find it out with just a mouse click? But first, let’s talk about why we need to know it at all.

Globalisation and trade are, perhaps, the most defining features of our times. As demand for certain agricultural commodities grows, farmers, who need to make money, clear out forests to satisfy the global urge for palm oil, beef, soy and wood products. These commodities alone are responsible for 70% of deforestation in the tropics, particularly in the Amazon and the forests of Southeast Asia.

Global trade, arranged in complex networks of supply chains, makes it hard to trace where the supplies come from. Low transparency within the supply chains makes it difficult to track down deforestation on the production side; It seems almost impossible to keep track of who is trading what with whom and where it eventually ends up. Achieving sustainable supply chains is not going to be possible without making the data of commodity trade available to suppliers, retailers and importers. Here, research can play a significant role.

These were the issues discussed at the seminar jointly organized by Focali and SIANI, held in Gothenburg the 8th of December 2017. The purpose with the seminar was to engage different actors involved in trade of agricultural products in conversations about what can be done to get rid of deforestation in commodity supply chains. Among the attendees were representatives from companies and organisations such as Nestlé, the Swedish Forest Agency, Kahls Kaffe, Rainforest Alliance, Natessen, Universeum, The Swedish Food Federation, Friends of the Earth and the National Agency for Public Procurement.

Orangutans at Camp Leakey, Central Kalimantan, Indonesia.

Photo by James Anderson, World Resources Institute via Flickr.

Why is destroying forests such a big deal?

Let’s start from the beginning. Agricultural expansion is a major driver of deforestation and is, together with forestry, accountable for almost a third of the world’s total greenhouse gas emissions. Forests store carbon, mitigate climate change and provide a multitude of ecosystem services, essential for thriving and resilience of humans and other species.

Martin Persson, Focali member and researcher at Chalmers University of Technology, explained that deforestation is the single largest contributor to biodiversity loss worldwide. Deforestation and land-use change are so high that we currently are facing the sixth mass extinction in the Earth’s history at a rate faster than species can evolve. What is more, forests regulate hydrological cycles, affecting water availability on a regional and local scale.

Torsten Krause, Focali member and researcher at Lund University, elevated the issue by showing reports on how deforestation in the Amazon has caused water shortages in Brazil. He then continued explaining the spiritual values of forests and how they are important for recreation and livelihood. Many forest communities are dependent on the forests for their livelihood and food, these people are largely affected by deforestation and forest degradation.

Aerial view of an oil palm plantation in  Dompas, Riau, Indonesia.

Photo by Mokhamad Edliadi/CIFOR via Flickr.

Trading forests for food

It is striking that a large part of forest destruction in Brazil, Indonesia or Cameroon can be attributed to me and you – the consumers who are at the very end of long supply chains. For instance, new data cited by Martin Persson and Javier Godar, Focali member and a senior research fellow at Stockholm Environment Institute (SEI), indicates that Swedish consumption and imports of beef, palm oil, soy and wood products are responsible for loss of 6700 hectares of forests. That is roughly the size of 12 000 American football fields deforested every year.

Global appetite for chocolate follows a similar trend. Torsten Krause provided examples from the Ivory Coast where chocolate beans grown illegally inside protected areas has caused major deforestation, and the rainforest cover has decreased by more than 80 % since 1960.

Despite all the sad numbers, Javier Godar pointed out that positive change is on the go. He highlighted the importance of the UN Climate Summit 2014 that sparked a trend of commitments driven by a boom in cross-sector partnerships. Hundreds of companies joined the Consumer Goods Forum and committed to achieve zero deforestation in major supply chains by 2020. It is also worthy to mention the Amsterdam Declaration, signed by governments and the industry, including the Swedish Food Federation, among other actors. The Declaration supports the goal of achieving fully sustainable palm oil supply chains by 2020.

So, the will to establish zero deforestation and sustainable production as a new business norm is there. However, lack of transparency is a major obstacle.

Transparency – the new green

Javier Godar presented the outlines of Trase – a web-based tool for mapping material flows within global trade of commodities such as soy, beef and palm oil. The vision behind the tool is to provide companies, governments, investors and other actors a public go-to supply chain information system with the data about the world’s major forest-risk agricultural commodities. Increasing transparency within complex supply chains will make it easier to backtrack product’s involvement in deforestation. “With the Trase tool you can actually see, in near real time, where your country or company imports soy from, down to the very production region in, for example, Brazil” explained Javier.

Trase has a resolution that takes us as close as the level of municipalities –  a highly important scale for commodity trade. Narrowing the data down to country of origin isn’t enough to assess deforestation risks, and Trase has the potential to change this.

A common problem in global trade is that consumers don’t know what happens downstream. With transparent supply chains, we can pinpoint the starting point of a product. This makes it possible for all the actors along supply chains to make more informed decisions, avoid forest risk regions, increase awareness among consumers and enable them to make sustainable choices.

If we don’t know what happens, we can’t change it. Supply chain transparency will help countries understand their impact abroad, increasing chances for sustainable procurement decisions and exert pressure on less sustainable companies or sites at a whole new level. Transparency is therefore an important step to eliminating deforestation from supply chains. In this sense, transparency really is the new green.

Smallholder - Seu Manoel picking Oil Palm in his own plantation. Photo by Miguel Pinheiro/CIFOR via Flickr.

Smallholder – Seu Manoel picking Oil Palm in his own plantation.

Photo by Miguel Pinheiro/CIFOR via Flickr.

From obscure to transparent, how do we get there?

Trase and the concept of radical transparency offer a promising root. However, there are still challenges to overcome. For instance, connecting actors to places and impacts is an area where the knowledge gap is still significant, according to Javier Godar. There are also risks of “naming and shaming” as well as “greenwashing”, where transparency could be used as a label in sustainability and social responsibility reports.

Martin Persson highlighted that transparency is a tool and not a goal in itself. The objective is not to make everything transparent just for the sake of it, the objective is to increase transparency so that we can start working with the data it provides.

A point of controversy in the discussion about palm oil is whether we should make its supplies 100% sustainability certified or reduce and eliminate the use of palm oil in our products whatsoever. Universeum, a public science centre and a museum in Gothenburg, shared their experience with achieving a palm-oil free restaurant in their museum: “We were constantly reminded of how many products contain palm oil.” However, through this struggle they also learned that palm-oil can be exchanged for more sustainable alternatives, such as rapeseed and sunflower oil, and that it is possible to challenge the current market norms, where palm oil is on top.

On the other hand, World Wildlife Fund, WWF, estimates that around 4.5 million people in Southeast Asia depend on the income from the production of palm-oil. Nestlé highlighted that certifying these sites could thus be part of the solution for both social and environmental sustainability. Indeed, there are reports showing that certified sites have lower deforestation rates than non-certified sites, as well as larger canopy cover.

Certification, in its turn, has its own challenges. Getting certified requires paying fees to certifiers and evaluators, and can exclude smallholder farmers with low economic capacity. So, there are cases when sustainably produced products are sold as conventional.

Also, there are great differences between regions, ecosystems and production sites – the reason why establishing a global certification might lower the standards of sustainability at some sites. In fact, companies working in the region can have greater knowledge of the matter than a certification organ working on a global scale.

There are also different certification schemes: some only focus on social aspects of production, while others have a more environmental focus, and some certifications include both. However, overall, these differences mean the level of sustainability might vary depending on the certification.

All of this is troublesome for the consumer, since the logos of different certifications are about the only knowledge one can take into account when shopping. It’s also tricky and time consuming to stay updated about which certifications make a difference and which don’t. On this note, Martin Persson highlighted: “Whether we choose to exclude or to certify products doesn’t really matter if the result is zero deforestation, but it sure would be easier for consumers if legislation ensures that all products in a store are produced sustainably”.

How to eliminate deforestation from supply chains is a heated debate within academia. But this issue needs to be mainstreamed among different sectors and on a larger scale, especially if we are to fulfill the requirements of zero deforestation within supply chains before 2020.

Transparency is an important pre-condition for deforestation-free supply chains, and tools like Trase can play an invaluable role. However, even so, transparency alone cannot substitute other regulations or incentives for sustainable trade. Neither can certifications alone support the transition towards sustainable supply chains.

In other words, it’s not only about transparency and zero deforestation commitments and it’s not only about certification. Torsten Krause stressed that we also need to focus on our collective consumption: “The questions we ultimately have to think about is how, what and how much we produce and consume,” he said.

If we are to really make our consumption sustainable, as we aspire in the SDG12, we all need to get on board and work together. Maybe in the future, tools like Trase could be accessed through apps on our phones, providing firsthand information about the sustainability of products we are about to buy. In this sense, transparency can really give a green light to sustainable consumption.

This blog is based on experiences from the seminar about how to get supply chains free of deforestation, jointly organized by Focali and SIANI in Gothenburg 2017, and the views are the author’s only.

Linda Hansson

Communications Coordinator (GMV)

Linda is involved in several programs and projects at the Gothenburg Centre for Sustainable Development (GMV) where the main part of her time is within the AgriFoSe2030 program where she is the...

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