Supply change: Can commercial models build landscape health?

Freshly roasted coffee, sustainably harvested from Lampung, Indonesia. Ulet Ifansasti, CIFOR

Agricultural supply chains are responsible for more than 70 percent of tropical deforestation. Yet, the root causes of environmental degradation might not be agriculture, forestry or extractive industries per se, but rather the unsustainable production and consumption models underpinning them.

To make headway on changing how the increasingly populated and connected world feeds its wants and needs, the 2018 Global Landscapes Forum (GLF) in Bonn, Germany, brought together businesses, researchers and public institutions that are digging into the depths of supply chains to assess their foundations and develop strategies to transform them and the landscapes they affect.

“Bad agricultural models are negatively impacting people and the planet,” said Christopher Stewart, head of corporate responsibility and sustainability for Olam International, which manages how products move from ‘seed-to-shelf’ in more than 70 countries, working with millions of suppliers of commodities such as rubber, coffee and cocoa. “There have been efforts to change this in a piecemeal fashion with projects here and there, but doing things only at the project level will not change the status quo.”

Stewart is one of a growing many aiming to link sustainable production and consumption, even if they are thousands of miles – and intermediaries – apart. Speakers at different sessions echoed one another in outlining a three-pronged approach to doing so: change consumer behavior, support producers in low-income countries to develop financially attractive projects and ensure traceability of commodities.

If done well, people should be easily able to know whether the things they eat, wear and use have been produced in an environmentally, socially and economically sustainable way. And, producers should be rewarded for investing in healthier landscapes.

“Driving more incentives down commodity supply chains would accelerate progress while helping to address entrenched rural poverty,” said Nigel Sizer, chief program officer at the Rainforest Alliance.

CERTIFYING AT SCALE

Certifying specific production sites, activities or commodities is one way to incentivize smallholders and agribusinesses to become more sustainable. For instance, coffee stamped as organic and fair-trade can yield higher profits than beans that bear no such markings.

But a new approach is emerging: What if it was possible to ensure the sustainability of entire jurisdictions, such as states or districts?

Currently, there is no market mechanism that ensures the sustainability of commodity production on a large, jurisdictional scale, and that covers multiple products. Existing certification schemes have limitations: not all farms can join them, and trees may be falling in between certified farms,” said Willem Klaassens, senior commodity trade specialist at the Sustainable Trade Initiative (IDH).

As a solution, IDH has developed Verified Sourcing Areas (VSA), a new market mechanism designed to bring together public, private and civil society stakeholders to together verify the sustainability of an entire production area, so it is no longer necessary to audit each producer or commodity individually. The mechanism includes the VSA Global Performance Standard, a guide for assessing sustainability of an area that is scheduled to be put up for consultation in July 2019.

“This approach aims to establish a direct link between producing regions and committed end-buyers,” said Klaassens.

Another initiative featured at the GLF was the Landscape Standard (LS), a new global framework that aims to drive sustainability by tracking the progress of commodity-producing landscapes over time. This is done through measurable environmental, social and economic indicators. In turn, verifiable progress can help attract finance to further grow the efforts.

“This application complements sustainability efforts that target individual production sites, activities and sectors,” said Joanna Durbin, director of the Climate, Community and Biodiversity Alliance, a member of the LS secretariat together with the Rainforest Alliance, UTZ and Verra.

“There is a need for greater traceability and transparency; we need to get to a point where we know where products are coming from and what are the sustainability issues in that area,” she explained.

CONCERNING MORE THAN THE SELF

Delegates at the GLF agreed that the way forward is to bring in the private sector and finance, and to do so by designing sustainable business strategies in land use sectors and beyond. But what is in it for businesses?

“The only thing that can ultimately drive the involvement of the private sector in the landscape agenda is self-interest,” said Daan Wensing, director of landscape programs at IDH.

He pointed to an example of the tea industry in Kenya, were plantations have been expanding at the expense of the Mau Forest, one of the country’s most important natural water towers. “Tea companies are now investing in protecting the forest because they have realized it determines the microclimate their plantations depend on,” he said. “They still have a concession for the next 80 years, so it really is in their own interest.”

President and CEO of EcoAgriculture Partners Sara Scherr corroborated Wensing’s observation, citing a study on partnerships for landscape stewardship she co-authored. What it showed is that businesses engaged for their own benefit, not as a matter of corporate social responsibility.

“Some companies were concerned about the impact of water scarcity on their activities, while others wanted to engage with farmers, or make money, as was the case for those working on carbon forestry,” she said.

COMING BACK AROUND

“Ensuring the future production of commodities, especially in the face of climate change, is a survival imperative for agribusinesses,” said Stewart from Olam International. Through its ‘living landscapes policy,’ Olam tries to make their commercial models support the co-existence of thriving rural communities and ecosystems in tandem.

A central part of the policy is building partnerships with stakeholders such as NGOs and other businesses. “As a company, it is hard for us to invest beyond the farm gate, so we need to team up with other stakeholders to address sustainability issues at the landscape level – for example, those concerning watersheds and communities.”

This is important not only to secure future balance sheets, but also because, according to Stewart, many businesses are finding themselves – or are choosing to be – at a turning point: “Many people do not want to be part of that destruction anymore, but of something that builds natural capital as well as profitable business.”

The new initiatives to incentivize sustainable trade and consumption seem to be gradually bringing the rationale of individuals, companies and investors full circle: from degrading ecosystems and livelihoods out of self-interest, to protecting them for the very same reason.

 

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