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Home Supply Chain Updates

In the Race to Net Zero, Ignore Supply Chain Risks at Your Peril

usscmc by usscmc
July 10, 2021
In the Race to Net Zero, Ignore Supply Chain Risks at Your Peril
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Companies with a significant land footprint must act now to eliminate deforestation and conversion. If they don’t, the business risks are long-lasting, with emissions from deforestation remaining on balance sheets for the next 20 years.

No longer simply the latest buzzword in sustainability, net-zero
strategies

are dominating the agenda across both private and public sectors. Balancing the
amount of greenhouse gases (GHGs) we produce with the amount removed from the
atmosphere is increasingly seen as our best chance to avert the most severe
impacts of a changing climate.

Fuelling the race to zero is the setting of corporate targets. More than 1,000
companies have set, or committed to establish, a science-based target in
alignment with the 1.5oC target of the Paris Agreement. This group of firms make
up 20 percent of global market capitalization, and the rate of adoption for such
targets doubled in
2020
.

A good proportion of these companies are in the food, agriculture or forestry
sectors — which collectively represent around 25 percent of GHGs, and are
publicly reporting their emissions against their net-zero goals.

However, few of them account for the emissions associated with their
land-intensive operations or related supply chains in their targets and
disclosures. Many of them do not have zero-deforestation commitments or policies
in place to ensure the GHG impact of their land footprint is kept to a minimum.

Protect forests, achieve sustainability

It is clear that if we are to meet our future GHG goals, companies with large
land footprints must eliminate
deforestation

and land conversion immediately. The truth is that protecting forests,
ecosystems and land rights in supply chain operations is often the clearest
route to achieving a number of other sustainability priorities, such as
conserving
biodiversity

and respecting human
rights
.

As the Science Based Targets initiative (SBTi) states, companies with
net-zero targets should follow a mitigation hierarchy that prioritizes
eliminating sources of emissions within the value chain of the company, beyond
compensation or neutralization
measures
.
In fact, land-based climate strategies should focus on interventions that help
preserve and enhance existing terrestrial carbon
stocks
,
within and beyond the value chain of the company. After all, continued emissions
associated with the supply chains of food
companies

will remain a liability in their GHG calculation and reporting for the next 20
years, at least.

Streamlining the way companies measure and report GHGs

We are working to make it easier for companies to streamline the measurement and
reporting of land sector emissions alongside their zero-deforestation
commitments

and policies. Together with partners, the Accountability Framework
initiative
(AFi) developed a set of
principles, definitions and guidance to help companies achieve ethical supply
chains in agriculture and forestry that have already been integrated into major
company reporting platforms. AFi offers a clear and consistent way to set
commitments, take action and monitor progress on everything from deforestation
to human rights violations, and is working with partners to reflect this into
key climate and GHG reporting indicators.

For example, AFi’s reporting and assessment working group has been working with
both WWF’s FLAG/SBTi
team
and
the WRI’s GHG Protocol technical working
group
to align
guidance on accounting for these emissions. Together, we’ve made sure there is
alignment and joint messaging on technical issues such as definitions,
identification of land use
change
,
and time horizons. We’ve also developed aligned guidance on the allocation of
land footprints along a supply chain with different levels of supply chain
traceability.

The plan is for the partners behind the AFi to further integrate the
infrastructure for zero-deforestation supply chains more tightly with new
sustainability tools that companies will rely on during the next decade. For
example, the GHG
Protocol
’s
guidance for land sector emissions, science-based target-setting for climate and
nature,
and the requirements of the Taskforce on Nature-Related Financial
Disclosures

will all be increasingly valuable to companies. The interlinked systems will
enable firms to make zero-deforestation sourcing and financing “business as
usual” — and central to meeting all other sustainability-related targets.

It’s been two years
since the Framework was launched. Not only has it been adopted by some of the
biggest companies in the world; processors, traders, manufacturers and retailers
with total annual revenues of more than US$1.7 trillion are using it to make
ethical supply chains a reality.

Get to work, now

Put simply, companies cannot reach net-zero
emissions without forest protection
. Those with a significant land footprint must act
now to eliminate deforestation and conversion, which contribute significantly to
overall emissions.

If they don’t, the business risks are long-lasting, with emissions footprints
from contemporary deforestation remaining on balance sheets for the next 20
years
.

See what sort of impact the Accountability Framework has had in the last two
years
here; and
you can get in touch

here.

Published Jul 7, 2021 8am EDT / 5am PDT / 1pm BST / 2pm CEST


Jeff Milder

usscmc

usscmc

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