Stabilize the Climate

Land Restoration and No Deforestation

Eliminate deforestation across the value chain and protect and restore land to keep carbon in the ground and preserve vital ecosystems and the services they provide.

Companies commit to achieving deforestation-free operations, supply chains, products, services, financing and investments and to setting quantifiable targets that are linked to specific timeframes that are both achievable and aligned with recognized global expectations. Companies will require suppliers to cascade the commitment to being deforestation-free across their own supply chain by 2025. Companies also commit to investing in the remediation of land previously impacted by their business activity. Specifically, companies will:
 

  • Establish data systems and regularly disclose quantifiable progress towards  the elimination of deforestation and the conversion of natural lands across the value chain
  • Implement a cross-commodity policy and a time-bound action plan to eliminate deforestation and natural land conversion in their operations and supply chains
  • Deploy effective assurance programs that trace commodities along the supply chain, monitor, evaluate and verify compliance with company policies, and provide grievance mechanisms and protocols to bring processes back into compliance 
  • Engage suppliers to transition away from deforestation by providing financial incentives to avoid further deforestation
  • Require that all new financing and investments avoid deforestation and the conversion of natural lands
  • Include emissions from agriculture and land use change in science-based GHG emission targets and disclosure 
  • Develop plans and invest in strategies to begin carbon removal as soon as possible, guiding future use of natural climate solutions that is consistent with achieving net-zero GHG emissions before 2040

Companies have eliminated deforestation and the conversion of natural lands as part of their operations, supply chain, products, services, financing and investments. Companies’ suppliers have successfully cascaded the elimination of deforestation and conversion to their own supply chains. Companies have begun the remediation of land previously impacted by their business activities. Specifically, by 2025 companies will: 
 

  • Evaluate the effectiveness of supplier engagement and incentive programs to avoid deforestation and conversion of natural lands and identify the programs that can be brought to scale with suppliers 
  • Require verification and certification of suppliers that operate in high-risk regions or with high-risk commodities
  • Pursue and invest in technologies to improve supply chain traceability
  • Require that all financing and investments avoid deforestation and the conversion of natural lands
  • Invest in projects that restore and remediate land previously impacted by business activities in ways that protect biodiversity, water resources and local and indigenous rights.
  • Reduce dependency on credible carbon offsets by maximizing absolute GHG emissions reductions and the use of natural climate solutions to remove carbon

Companies verify the elimination of deforestation and the conversion of natural lands across operations, supply chain, products, services, financing and investments. Companies only partner with suppliers that are deforestation-free. Companies expand investments in land restoration projects that protect biodiversity, water resources and local rights and livelihoods, especially those of indigenous communities. The projects are integrated into the company’s larger carbon management plan and carbon removal from these projects are permanent, additional, verifiable, and quantifiable. The integrity, offsetting capability and effectiveness of the land restoration projects and their strategic alignment with the company’s carbon management plan is continually assessed. 

Accounting for and Managing Deforestation Impact and Risk

Halting deforestation and the conversion of natural lands is necessary to limit global warming to 1.5 ºC. However, if we want to increase our chances of avoiding the 1.5 ºC threshold, companies should work toward restoring forests and natural ecosystems through cross-industry collaborations.  By collaborating with stakeholders in shared and vulnerable jurisdictions, investments in natural climate solutions can go much further.  In addition to partnering with other companies, it is critical that local stakeholders, including workers, communities, advocacy organizations and government entities, are involved in developing solutions that are equitable and permanent.

One particular challenge that requires increased multi-stakeholder collaboration is the development of methods to better account for land-based emissions. Managing the climate impacts of land use decisions will require companies to quantify and disclose GHG emissions from agriculture and land use within their direct operations and supply chains and to include these emissions when setting their science-based GHG emission targets. Since standardized methods for accounting for land-based emissions in GHG inventories and science-based targets are currently lacking, there is a clear opportunity and need for companies to collaborate with a diversity of stakeholders, including, peer companies, investors and issue experts, to develop industry-specific metrics and accounting standards. 

Improving accounting standards and overall disclosure will also help companies engage more effectively with investors. Consistent with their fiduciary duty to effectively manage climate-related risks in their portfolio, a growing number of investors are coming to understand the large financial risk inherent in land use practices—and the even larger opportunity presented by changing them. The Ceres Investor Guide to Deforestation and Climate Change helps investors evaluate their deforestation and land use exposure in three ways; (1) analyzing a company’s sourcing patterns; (2) examining a company’s GHG inventory; and (3) evaluating a company’s deforestation mitigation strategy. Companies can also use this guidance to proactively engage with investors on deforestation, communicating to investors how deforestation and land use practices impact the business and what steps are being taken to address those risks and opportunities.  Improving executive and senior leadership fluency on material deforestation and land use issues and opportunities will build investor confidence, increase transparency and help investors reward top performers.

Getting Started

This section of the Ceres Roadmap 2030 identifies the foundational steps companies can take to begin implementing the actions needed to stabilize the climate.
 

✓ Engage Role Players

To capture the full breadth and depth of risks and opportunities in stabilizing the climate, companies should consider the role of various business units across the value chain and regularly engage with business unit leaders to analyze the intersection between climate risks and opportunities and their processes.  Upstream, climate-related opportunities may take the form of sourcing decisions or the redesign of a product to reduce GHG emissions or deforestation.  Downstream, these opportunities may take the form of changing how products and services are delivered or even consumer and customer marketing.  Engaging business unit leaders will uncover better solutions and make the process of establishing workforce accountability easier.  Concurrently, business unit leaders and senior management need to establish fluid lines of communication and disseminate key risks and opportunities into clear messaging that will engage board members. Complementary board oversight and accountability from the top down will support the integration of sustainability priorities across the business, informing strategic and annual planning and ensuring the proper allocation of resources for achieving stated goals. 
 

✓ Connect the Dots 

To take meaningful action in stabilizing the climate, companies must first accept that climate risk is a financial risk in both the short-term and long-term. To properly address climate risk, companies should analyze and measure the extent in which the company’s activities produce greenhouse gas emissions, across all scopes. There may be aspects of the company’s GHG footprint that are difficult to quantify. It is important to identify gaps in measurement and set the goal of increasing accuracy and completeness over time. Where appropriate, companies can temporarily use informed estimates to fill gaps until better measurement processes are created.
 

✓ Establish Policies

Once the challenge is defined, companies should establish enterprise-wide policies that support the intention to phase out activities that negatively impact the climate, including production of GHG emissions and deforestation.  Based on the company's business model and structure, the depth and complexity of these policies will vary; however, the policies should first be implemented in areas of the value chain that have the largest absolute impact.  These policies should be revised and strengthened on a regular basis as more information is gathered. Strong climate-related policies will help guide and inform corporate decision-making.  It is critical that companies analyze the interconnectedness, potential consequences and tradeoffs of policies to  minimize the risk of any adverse impacts to people, communities and resources elsewhere. 
 

✓ Build a Management System Designed for Evolution

Once policies and procedures are designed to address climate-related risks and opportunities, performance must be measured as part of a comprehensive management system to ensure that processes are driving towards intended outcomes and that management has the data available to make informed decisions.  Companies should develop processes and tools as part of their management systems to monitor the performance and effectiveness of business units as well as develop sector-relevant key performance indicators to enable alignment between commitments, operations, relationships and investments.  As part of a complete management system, companies should create processes to address non-compliance and make efforts to address the root causes of the issues identified.
 

✓ Perform Scenario Analysis

To determine where climate-related impact is the greatest, companies should perform a climate scenario analysis and assess risk across their value chains to identify where and under what conditions the company is most exposed to physical and transition climate risks. The climate scenario analysis should extend across multiple time horizons out to 2050 and cover multiple temperature rise scenarios, including but not limited to: business as usual, 2 ºC, and 1.5 ºC. Companies should also be cognizant of the different pathways leading to a given temperature increase. A 2 ºC scenario in particular could be the result of a smooth or disruptive transition, which may present different sets of risks and opportunities. To provide stakeholders with decision-useful information, scenarios should be based on reputable inputs and models, with additional customization where necessary. Methodology details and assumptions should be publicly disclosed.

Disclosing Progress

Disclosure establishes accountability, provides a foundation for engagement and serves as a platform for demonstrating priorities, process and progress. See the Transparency and Disclosure section of Ceres Roadmap 2030 on how to make all of your disclosures complete, credible and decision-useful.

The Global Reporting Initiative (GRI) Standards and the Sustainable Accounting Standards Board (SASB) are two disclosure tools widely recognized as standards for guiding comparable sustainability disclosure. Disclosure related to corporate efforts to stabilize the climate should also be guided by three additional disclosure resources that help to strengthen corporate disclosure and meet the expectations of stakeholders, in particular investors: the Task Force on Climate-related Financial Disclosures (TCFD), the CDP Climate Change Questionnaire (CDP-CC) and the CDP Forests Questionnaire (CDP-F).

The TCFD is emerging as the de-facto framework for guiding climate-related disclosure and is widely supported by the investment community. The TCFD recommendations require disclosure across four key areas: Governance, Strategy, Risk Management and Metric and Targets. Investor preference for the TCFD framework is guided by the insights provided into how climate-related risk and opportunities are integrated and managed across the business and how companies are planning for the future.  Companies can also benefit from the process involved with aligning disclosures to the TCFD recommendations (e.g. the lessons learned from conducting a scenario analysis and comprehensively disclosing company wide climate-related impacts). 

Many companies are improving their TCFD disclosures by engaging investors and stakeholders as part of the process. The strongest TCFD disclosures will also have the complete support and buy-in of the board and C-suite executives and other key parts of the organization, such as Investor Relations, Finance and Risk Management.  There is no prescribed frequency for how often a TCFD disclosure should be updated. However, companies should consider the impact of significant business decisions, global events and availability of data as triggers for making updates and enhancements.

Companies and investors recognize CDP disclosures for their comprehensiveness and detailed information. More than 8,000 companies disclose to CDP, while over 500 investors with assets totaling more than $100 trillion request data from CDP.  Both the CDP Climate Change Questionnaire and Forest Questionnaire come in two versions: a minimum version and a full version that includes sector-specific questions.  Either version can be used to calculate a company’s CDP score. The questionnaires allow companies to provide structured details pertaining to how they are addressing and managing climate change and forest impacts.  The questionnaire and scoring process is performed annually, giving stakeholders the opportunity to monitor climate change and forest commitment progress on a regular basis.

The CDP-CC recently mapped specific sections of the questionnaire to the TCFD recommendations and Sustainable Development Goals (SDGs). This makes reporting across multiple frameworks easier, while also creating space for companies to provide more granular details with respect to projects, initiatives, goals and metrics across GHG emissions scopes and the company’s value chain.  

The CDP-F recently mapped specific sections of the questionnaire to the Accountability Framework (a supply chain framework focused on land use and rights issues) and the SDGs, again helping users understand how information disclosed through CDP can be mapped to other standards. 

Since few companies are able to disclose quantitative progress towards eliminating deforestation, it is difficult for investors to understand, analyze and mitigate risk across their portfolios.  Companies should make every effort to disclose the following metrics:
 

  • Percent of a commodity that is traceable - Percentage of a sourced commodity that a company can trace to the product’s origin or to a point at which the company can assure compliance with its policies
  • Percent of suppliers in compliance - Percentage of their total suppliers that comply with their no-deforestation policies. They should also update these numbers to reflect recent suspensions due to non-compliance
  • Percent of commodity in compliance - How much of the total supply of a commodity is in compliance with company policies and standards. This is particularly important when a company sources most of a commodity from just a few suppliers


Additional Disclosure Resources

Ceres: Disclose What Matters - Analyzes the sustainability disclosures of the world's largest companies and can help companies bridge the gap and provide executable, relevant information to investors.

TCFD Good Practice Handbook - Identifies good practices in implementing the TCFD recommendations. The examples are drawn from across the G20 to cover multiple jurisdictions and a diversity of practices in making the 11 TCFD recommended disclosures across the four core elements of governance, strategy, risk management, and metrics and targets. 

TCFD Knowledge Hub - Provides resources needed to understand and implement the TCFD recommendations.

WBCSD’s TCFD Preparer Forum - The TCFD Preparer Forums bring leading companies together to discuss disclosure practices and the work needed to enhance disclosure effectiveness and implement the TCFD recommendations. In the Forums, members will identify examples of good practice, develop disclosure roadmaps and seek investor perspectives on TCFD disclosures, including how market participants use the information.

Resources

With respect to land restoration and no deforestation there are many programs, resources and materials available to help guide companies.  Below is a list of some key resources:

IPCC Special Report: Climate Change and Land - A special report from the IPCC  on climate change, desertification, land degradation, sustainable land management, food security and greenhouse gas fluxes in terrestrial ecosystems.

Ceres: Engage the Chain - A Ceres guide that provides overviews of the environmental and social risks and impacts of eight commonly sourced agricultural commodities: beef, corn, dairy, fiber-based packaging, palm oil, soybeans, sugarcane and wheat. The interactive report also clarifies the actions investors and companies should take to reduce agricultural supply chain exposure.

Ceres: Investor Guide to Deforestation and Climate Change - The Guide provides investors with a framework to assess how deforestation exposes their portfolios to climate risk and key points to raise during company engagements..

Ceres: Out On a Limb - This investor brief assesses the state of public corporate commitments around deforestation and lays out the case for elevating two key reporting metrics from companies.

Global Forest Watch - An online platform hosted by the World Resources Institute (WRI) that provides satellite-based insights for analyzing forest trends, receiving supply chain deforestation alerts, creating custom maps and downloading real-time data on forest loss.

Trase -A platform led by researchers at the Stockholm Environment Institute that compiles publicly available data and makes connections to reveal the trade flows of globally important commodities, including beef, soy and palm oil. Using this data, Trase links on-the-ground impacts in producing countries, such as deforestation and water pollution, to the products that end up on the supermarket shelves of consuming countries, along with the specific traders and manufacturers involved.

Forest 500 - A project of the non-profit organization Global Canopy that ranks 350 companies and 150 financial institutions on their overall approach and specific policies regarding potential deforestation embedded in forest-risk supply chains. In 2019, Forest 500 updated its methodology for better alignment with the Accountability Framework.

Natural Climate Solutions Alliance - The NCS Alliance brings together public and private stakeholders to identify opportunities and barriers to investment into carbon credits in new and existing markets, to increase financing for natural climate solutions. The Alliance also serves as a forum for knowledge sharing and technical capacity building to ensure natural climate solutions reach their full potential in reducing GHG emissions, abating climate change.

The Accountability Framework - A set of common norms and guidance for establishing, implementing and monitoring ethical supply chain commitments in agriculture and forestry  These norms reflect the consensus of a diverse coalition of respected conservation and human rights NGOs from around the world.

Companies in Action

Bunge advances efforts to meet no-deforestation commitments and launches financing mechanisms to incentivize farmers. In 2015, Bunge committed to achieving deforestation-free supply chains by 2025 and has been releasing progress reports on an annual basis ever since. In 2019, the company reported having achieved 91% traceability to direct source farms in areas facing a high risk of deforestation in the Brazilian Cerrado, as well as 100% traceability in Paraguay and Argentina. Among the initiatives that are helping it meet its target is a partnership between Bunge, Banco Santander Brasil S.A. and The Nature Conservancy to develop a financing mechanism to reward soy farmers in Brazil who commit to producing crops without deforesting land or converting native vegetation. Farmers who make these commitments are eligible for loans of up to 10 years, while most loans currently available to soy farmers have terms of a year or less to finance crop costs. This mechanism is part of a broader effort that seeks to promote the growth of the soy market in a sustainable way. Expanding on its work to protect forests, Bunge has committed to shifting its business practices to reduce its use of fresh water, another critical natural resource. Bunge has set a leading example in this area through establishing risk-differentiated water reduction targets--targets that reflect the severity of water stress in a particular region. Bunge has had notable success, reporting in 2019 that the company had reduced its  freshwater consumption by 21.2% from 2016 levels, going far beyond the company’s original goal of 10% reduction between 2016 and 2026. 

Unilever advances work to achieve zero deforestation in key commodities and invests €1b in conservation efforts. Over the last decade, hundreds of global companies have made public commitments to eliminate deforestation from their operations and extended supply chains. In 2010, consumer products giant Unilever, along with members of the Consumer Good Forum, committed to achieving net-zero deforestation in four commodities, palm oil, soy, paper and beef, a pledge that has since been extended to include tea. By the end of 2019, Unilever reported that 62% of its agricultural raw materials were sourced sustainably. The company has been transparent about the challenges it has faced in achieving this goal, namely overcoming the lack of traceability in its supply chains. Unilever has committed to investing in digital technologies, including satellite monitoring, geolocation tracking and blockchain, to improve the traceability of its supply chain and confirm its products are sourced sustainably. In 2020, the company doubled down on its efforts by committing to zero-deforestation across its entire supply chain by 2023 and establishing the Climate and Nature Fund. The fund will invest €1 billion in initiatives, such as reforestation and carbon sequestration, to counter the effects of deforestation. Both efforts will help the company achieve its ambitious goal of reaching net-zero emissions across its value chain by 2039.

Nestlé makes strides to deliver on its no-deforestation commitment and reports on progress. Along with many consumer products companies, in 2010 Nestlé made a pledge to achieve no-deforestation in its products by 2020. Over time, the company has worked with its suppliers and other stakeholders to realize this vision. In 2019, the company announced that 77% of its top five agricultural commodities (palm oil, pulp and paper, soy, meat and sugar) were verified as deforestation-free compared to 63% in 2018. Nestlé expects to continue to make strides towards its target, estimating 90% of its products will be deforestation-free by the end of 2020. The company has reached this milestone by using a combination of tools, such as supply chain mapping, certification standards, on-the-ground verifications and, and most notably, real-time satellite imagery from the Starling system, a system developed by Nestlé to identify areas at risk of deforestation. The company released a report in 2019 that provided an update on its progress, breaking down the data by commodity and the verification system applied.

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