Some of the world's leading agricultural commodities businesses pledged today to accelerate their commitment to halting forest loss associated with the sector.
The 10 firms made the move as the UN Cop 26 climate summit's forest and land use event takes place, and it comes as EU legislators push back against use of commodities grown on cleared land.
ADM, Amaggi, Bunge, Cargill, Golden Agri-Resources, JBS, Louis Dreyfus, Olam International, Viterra and Wilmar International — which have a combined annual revenue of nearly $500bn and key market share of commodities such as soy, palm oil, cocoa and cattle — will by Cop 27 "lay out a shared roadmap" for their supply chains that is consistent with limiting a global temperature increase to 1.5°C as set out in the Paris agreement. Cop 27 is scheduled for 2022.
The primary target of Cop 26 is to keep within reach a 1.5°C limit on global warming.
The 10 firms said they will work with governments, farmers and others in their supply chains to build on progress already made and to scale this up to support the global effort to reach net-zero emissions by 2050 and halt biodiversity loss. The firms will "identify opportunities for public-private collaborations to catalyse further progress on eliminating commodity-driven deforestation," they said.
The European Commission's recast Renewable Energy Directive (RED) II, while legislating for a rise in renewable fuels in transport to a 14pc share by 2030, sets a 7pc limit for biofuels with an associated high risk of indirect land use change (ILUC), defined as those produced from food and feed crops associated with expansion into areas of high-carbon stock.
The EU sets a deadline of 2030 to phase out palm oil-based biofuels, and several member states have moved to bring this forward. France banned palm oil feedstock from 2020, Austria from its blending mandate from 1 July this year, and the Netherlands and Germany will ban palm oil biofuels from 2022 and 2023, respectively.
Also today 30 financial institutions representing around $8.7tn in assets, including Axa, Aviva and Schroders, signed a similar pledge on deforestation. They will assess exposure to deforestation risk through their investments or financing by the end of next year, disclose this risk and any mitigation activity by 2023, and will by 2025 publicly report "credible progress" on the path to eliminate deforestation from agricultural commodities.
The firms will, also by 2025, only finance clients that have met risk-reduction criteria, as well as increase investment in "nature based solutions," they said. Reaching "zero-deforestation across our portfolio will contribute towards our fiduciary duty to act in the best long-term interests of our investors, beneficiaries and clients," the institutions said.
