Posted on 27 November 2019
But how can companies pursue jurisdictional approaches effectively and at scale?
By Akiva Fishman, WWF-US
Over the last decade or so, hundreds of companies have committed to eliminating deforestation from their agricultural supply chains by 2020. The commitments promised to protect millions of hectares of forest from being cleared to produce commodities like beef, soy, palm oil, and timber. Unfortunately, 2020 is now just weeks away and it’s increasingly clear that many won’t meet this goal.
Companies have a lot more work to do to implement their supply chain commitments. But even the world’s most influential and ambitious companies cannot achieve sustainable production systems if local communities, government agencies, financial institutions, and other stakeholders are not deeply involved as well. The term of art for this diversified, all-of-the-above strategy is “jurisdictional approach.”
Jurisdictional approaches aim to implement socially and environmentally sustainable commodity production policies and practices at local, regional, or even national levels. When everyone in a given jurisdiction (usually a province or state) plays by the same rules, it can be easier for buyers to purchase from sustainable sources and more lucrative for producers in the region who can attract those buyers. Some companies are already supporting these initiatives, such as Unilever, which is partnering with others in Sabah, Malaysia
, to advance the state’s efforts to sustainably certify 100% of its palm oil production. It’s a quintessential illustration of the proverb: “If you want to go fast, go alone; if you want to go far, go together.”
But how can companies pursue jurisdictional approaches effectively and at scale? World Wildlife Fund has been working to answer that question and others through a series of global workshops.
Throughout 2019, WWF joined with Proforest, Tropical Forest Alliance, and dozens of other forest stakeholders in Colombia, Ghana, and Germany to identify tangible and viable steps that companies can take to support jurisdictional approaches across the globe. In the coming year, we’ll produce actionable guidance for companies on how best to engage in these multi-stakeholder initiatives to protect forests. In the meantime, here are some of our preliminary findings.
- Rewarding improvement is a critical first step. Exclusively sourcing certified products –paper and wood products carrying the Forest Stewardship Council label, for example – encourages more sustainable forest management. But companies should also support producers working toward certification to help increase the overall supply of sustainable products. One potential model to emulate from another sector: In the seafood industry, WWF works with large U.S. buyers to source from “fishery improvement projects” where fishers are on a well-defined path toward sustainable seafood certification, even if they haven’t yet earned that status. This supports individual fishers as they shift to more sustainable practices while moving the entire sector forward.
- Corporate collaboration is easier said than done – until you do it. Precompetitive action may seem complicated and foreign at first, but in practice, it can be straightforward and good for business. It also drives progress more steadily; consider the time and effort it takes a supplier to meet different production standards for each buyer compared to meeting one uniform set of standards. Collaboratively developing commitments, financing mechanisms, and land use planning can also better drive sustainable practices. Sometimes all that’s needed to spark collaboration is a catalyst such as an independent third party or the creation of a multi-stakeholder platform. In Ghana and Cote d’Ivoire, the World Cocoa Foundation is playing a key role in convening cocoa traders and downstream buyers to facilitate collective action in deforestation hotspots.
- Policymakers need to set a baseline for forest protection. Market incentives encourage and enable producers to reduce their negative environmental impacts and increase positive ones, but they’re still voluntary. Some producers, especially those that sell to markets that don’t prioritize sustainability, may not be moved by incentives. Further, better practices that boost yields may be designed to reduce the need for deforestation, but higher yields also mean each hectare can generate more income, creating a perverse incentive to deforest more land. Government policies that set a baseline for minimally acceptable standards can complement market-based incentives for the greatest impact on the ground. The upcoming entry into force of Malaysia’s Sustainable Palm Oil standard as a mandatory requirement – requiring all palm oil producers to implement certain management practices – is a good example of a legal floor above which voluntary efforts to achieve the more stringent Roundtable on Sustainable Palm Oil standard can nest.
- You can’t fight something with nothing. People who rely on converting forests to other land uses to put food on their table need alternative sources of income. Communities like those WWF works with in DRC’s Mai-Ndombe province are heavily dependent on forests but with some external support in the form of a Payment for Environmental Services program are able to reforest degraded lands in ways that benefit both wildlife and their livelihoods. Companies need to work collaboratively with local communities and local governments to identify alternative livelihoods, taking into account different needs and cultural preferences.
- Producers need tailored support. Shifting to deforestation-free production requires farmers and ranchers to invest time and money over a period of years. In some jurisdictions, long-term contracts give farmers confidence to invest, knowing that they’ll have buyers for their products at predictable prices for several growing seasons. With other commodities in other areas, though, such as soy in Brazil, producers prefer to let buyers compete season to season, so different incentives are needed. Engaging with producers directly is critical. Unilever is demonstrating one important engagement strategy in Sabah, Malaysia, where it is supporting extension services to smallholder oil palm growers to attain certification requirements.
- Companies can help farmers restore degraded land. It takes decades to centuries to build layers of rich soil, but when forests are cleared for agriculture, the earth can lose its fertility in a matter of years – and then it’s back to clearing more forest in search of fertile land. Companies can help farmers use agriculture to bring degraded land back to life, which reduces pressure on forests and bolsters the land’s ability to absorb carbon out of the atmosphere. Government policies that restrict deforestation can further drive land rehabilitation.
- Finance matters. Banks, investors, insurers, and other financial institutions can help shift better production and sourcing by offering favorable lending rates and premiums for more sustainable practices, structuring purchases and other transactions to support up-front investments in new tools and techniques, and leveraging carbon finance markets, among other strategies. HSBC and Walmart announced an innovative finance program this year that will grant Walmart suppliers access to improved financing based on their sustainability performance.
There’s a lot more we’ve learned, and a lot more still to learn. But one thing is clear: the future of life on Earth depends on healthy forests, and the only way to really protect these precious ecosystems is to engage every stakeholder early and often. Only together can we go far.