Five years ago, companies and governments signed up to the New York Declaration on Forests, committing to eliminate deforestation from agricultural supply chains by 2020.
In a recent report (Rogerson, S., 2019. Forest 500 annual report 2018 – the countdown to 2020, Global Canopy: Oxford, UK. Lead author: Sarah Rogerson, contributing authors and reviewers: Helen Bellfield and Helen Burley.) it was stated than none (not even one!) of the 500 companies that made public commitments regarding removing the deforestation ‘drivers’ from their supply chain will meet those targets.
The question is why? Why did they fail to deliver on their promises? These are big businesses with massive procurement power, yet all have failed to deliver. It’s true – some to a greater degree than others – but nevertheless a pretty hopeless performance by many.
What’s the cause? Why the lack of compulsion to meet these very public targets?
These commitments are focused on the key commodities whose production drives tropical deforestation, namely: palm oil, soy, cattle and timber products. Global Canopy describes what it terms as the ‘implementation gap’ – the gap between what companies say they will deliver and reality. They state that the implementation gap is closely linked to a company’s performance in terms of how it:
- ‘monitors and verifies its suppliers against its own commodity commitment;
- engages with non-compliant suppliers;
- has a grievance mechanism so that issues in its supply chain can be raised;
- is actively involved in collaborative actions to improve sustainable commodity supply chains;
- is transparent and has published supplier lists or coordinates of specific sourcing regions.’
In TRG’s experience – and we’ve been undertaking supply chain due diligence for large business and consumer facing retailers for well over a decade in over 40 countries – what really makes supply chain practices fundamentally change are the following:
- A commitment from the senior directors of the company (that powers the demand chain – from the company secretary to the commercial director) to realistic supply chain performance targets
- Well trained and committed buyers (that talk directly to their tier 1 suppliers) who fully understand and recognise this as a basic product ‘quality’ issue – regarded in the same light as product health and safety requirements. They must be prepared to change to suppliers if their current supply base cannot deliver
- Well trained and supported tier 1 suppliers (after all they have to pass this new quality requirement up the demand chain to their suppliers) that understand that if they don’t deliver (on this new quality) by a certain deadline, their client is going to stop paying them and find a new supplier that can meet the new spec, and
- Reliable, efficient and effectively IT systems that support the collection of data sets and mitigating documentary evidence that demonstrate – in a transparent manner – that progress towards targets is being met and if not – then exactly why not, sop that remedial action can be taken in time.
If these are in place, then radical changes in supply chain practises can be made. Companies that are identified under the Global Canopy 500 programme can shut the ‘implementation gap’ if they adopted the above approach.
Frank Miller, TRG Managing Director