How on Earth are Tropical Forests being affected by Welsh Businesses, especially as the majority of the Welsh businesses are small and medium enterprises?
You might find it shocking to learn that the production of only a handful of commodities are responsible for almost three quarters of the deforestation of tropical forests.
- Palm Oil
- Timber / Pulp
These commodities end up in the food and drink that we consume here in Wales. Just palm oil alone makes up 50% of all packaged goods in the supermarket. This creates a direct link between Welsh businesses and tropical forests, be that as producers, caterers or retailers. It’s therefore important that Welsh businesses are aware of the role that they have in changing a deforestation economy that is responsible for a tenth of global carbon emissions. So how do these commodities that many businesses use end up in Wales and the supply chain?
Demand for palm oil has grown significantly over the past few years and this has led to shocking increases in deforestation in parts of SE Asia, especially Indonesia. It can be found in a wide range of products ranging from ice cream, peanut butter, biscuits to beauty products such as lipstick and household products. Often not labelled ‘palm oil’, its derivatives have over 200 names which can be hard to spot – from lauric acid to glycerol.
Around 80-90% of soy is used in animal feed. This is driving deforestation in South America, particularly in the Amazon. A lot of soy animal feed is used in poultry and pork farming here in Wales. So, by using meat that is fed on soy animal feed, we are indirectly contributing to the problem of deforestation without knowing it.
Cattle rearing has the largest impact on deforestation, especially in Latin America. However, the majority of beef eaten in Wales comes from Wales or Europe. Nevertheless, the UK still purchases over a £1billion worth of beef that is linked to deforestation in the Amazon. This could end up in hospital dinners, ready meals and fast food chains and tinned meat.
The rate of beef from countries such as Brazil and Argentina where there is high deforestation risk could grow as the UK sets about signing new trade deals with other countries after Brexit.
Coffee and Cacao
Land clearing for the production of our favourite pick-me-ups is a growing concern as global demand for these products increases. Often this is small scale farming in African nations who are growing increasing amounts to meet our demand for caffeine and chocolate.
Of course, there are other drivers too. Timber, mining and other activity cause deforestation worldwide, but our food choices are driving the largest clearing of forests ever seen.
So, what can Welsh Business do to ensure Wales is a deforestation free economy?
Create local supply chains
It is widely acknowledged that we are facing a climate emergency and time is running out to take action. Governments, public sector bodies, companies and individuals all have a role to play in reducing our carbon footprint. To date, Wales’ carbon targets do not cover the significant carbon footprint associate with the goods and services it consumes that are produced overseas and imported into the country. By focusing on imported carbon emissions, Wales will also be making progress towards reaching the goal of a globally responsible nation in the Wellbeing and Future Generations Act.
Using as local and ethical suppliers as possible not only helps you appeal to customers who are becoming more conscious of their choices as consumers, but also creates a strong network of Welsh businesses supporting each other.
Use business sense
Companies and organisations are increasing exposed to reputational risks arising from problems in their supply chain. Therefore, as a business by being more aware of your impact on deforestation, this will protect and improve your reputation. Sustainability commitments can have a positive impact on employee and customer engagement, indicating potential gains from higher satisfaction and retention.
Overall, it is a win-win situation.
Although cost is often cited as a major barrier to implementing responsible sourcing, research carried out by WWF did not find it to be prohibitively high for retailers. Instead of paying premiums, retailers opted to work with suppliers to help absorb some of the added cost through various contractual arrangements and capacity-building support.
Get ahead of regulation
The UK Government set up an independent Global Resource Initiative taskforce made up of senior business, finance, government and civil society leaders to put forward recommendations on how to ensure that the UK’s global commodity supply chain is sustainable and avoids deforestation. The taskforce published a report in March this year recommending the introduction of mandatory due diligence for companies that place commodities and derived products that contribute to deforestation on the UK market. It focussed on seven main commodities that drive forest destruction: beef and leather, cocoa, palm oil, pulp and paper, rubber, soya and timber. It also recommended that the public sector helps to lead the transition by strengthening existing mandatory sustainable commodity public procurement requirements across all government. Following on from this report, a consultation by DEFRA was launched on the 25th August 2020. Details of the consultation on the proposed new law can be found here. It will run for six weeks and gives you the opportunity to respond to these changes. The EU and France are also moving in this direction.
Be aware of consumer demand
These recommendations echo the momentum for such rules among the general public. A You Gov survey carried out in 2019, found that 84% agreed with the need for new laws to ensure the products sold do not contribute to global deforestation. They want laws to make it easier for them to choose ethical and sustainable products.
There is already a transition in consumer trends, and the 2020 pandemic has led for increased demand to prioritise nature in this period of economic recession and post-COVID recovery.
Share your story
Wales’ businesses are in a prime position to be leading the way, especially as there is already a strong network of quality small and medium businesses, and a shift in consumer mindset with a growing demand for sustainably sourced goods.
If you’re making environmentally conscious business decisions, be it for personal or business reasons, advertise it to make it easier for customers to make ethical purchases and also to inspire other businesses to support growing a deforestation free economy and keep carbon hungry tropical trees growing too!
Size of Wales will be developing a toolkit to help businesses evaluate their supply chain, so if you have experience of ensuring your business processes are environmentally conscious, then please get in touch and share your lessons with us. We’d love to share best practice with other businesses throughout Wales.
If you’re looking to develop a greener business you are welcome to contact us about how we can work together, including our Zero Deforestation Pledge and help to contact experts.
 Partnerships for forests (2018) UK Roundtable on sustainable soya: baseline study 2018 [online] http://www.efeca.com/wp-content/uploads/2018/11/UK-RT-on-Sustainable-Soya-baseline-report-Oct-2018.pdf [14/02/2020)
 AHDB (2018) UK beef exports [online] http://beefandlamb.ahdb.org.uk/market-intelligence-news/uk-beef-exports-first-six-months-2018/ [14/02/2020]