Commodity production is one of the main drivers of deforestation. To date, much of the focus has been on commitments by many private sector companies to remove deforestation from their supply chains. Forest Trends has identified 484 companies that have sustainable commodity commitments; of these, 72 have committed to zero or zeronet deforestation for at least one forest risk commodity, while the other 412 have a commitment short of a zero-deforestation supply chain (Rothrock et al. 2019). In spite of these efforts, the uptake of sustainable production models remains limited. There has been a proliferation of pilot projects, yet measurable impacts on deforestation and forest degradation remain hard to demonstrate at scale. Only 21 of the 72 companies with zero or zero-net deforestation commitments have provided a quantitative report of their progress (Supply Change 2019).
Scaling up these projects beyond single actors, single supply chains or single locations remains challenging. With large shifts predicted in the future suitability of key cultivation areas (Leemans & Solomon 1993; Elliott et al. 2013, Smith and Gregory 2013), it is critical that producers adopt production models that can increase resilience against climate change and provide better economic certainty to producers, while at the same time delivering environmental and social benefits that, to date, have not received appropriate levels of consideration. Sustainable models for commodity production that can generate positive risk return ratios compared to business-as-usual projects do exist (UNEP).
However, across the globe rates of adoption remain low (Tey et al. 2012, Mutyasira et al. 2018, Van Thanh & Yapwattanaphun 2015). In recent years, UNEP has undertaken analysis on the relationship between soft commodities and deforestation, including analysis into the business case for production models that promise both environmental and economic benefits in Vietnam and Costa Rica. Yet, in spite of both countries adopting policies promoting the adoption of sustainable agricultural practices that can improve livelihoods and reduce environmental degradation 1 , levels of uptake have remained limited.
There are significant barriers preventing widespread investment into, and adoption of, novel and sustainable agricultural practices. This paper identifies some of the barriers preventing the transition to new paradigm of commodity production.
This White Paper was produced by UN Environment for the session at the GLF Investment Case 2019 in Luxembourg.
Author: UN Environment Programme
Publisher: Global Landscapes Forum
Keyword(s): agriculture, climate change, commodities, deforestation, finance, impact investment, soft commodities, supply chains, sustainable finance