Ecuador y Colombia iniciaron con el Centro REDD de la UE un diagnóstico participativo para anticiparse a las nuevas políticas y requerimientos de los mercados importadores de cacao. El objetivo es disponer de un sistema nacional de información para el monitoreo del riesgo de deforestación de las cadenas de valor del cacao.
In collaboration with the EU REDD Facility, Ecuador and Colombia started a participatory diagnosis to anticipate the policy developments and future requirements of cocoa-importing markets. The aim is to build a national information system to monitor deforestation of cocoa value chains.
On 2 May 2022, as part of the XV World Forestry Congress, the EU REDD Facility and RECOFTC will co-host a hybrid side-event. The side-event will show how improved accessibility and transparency of information along complex commodity supply chains can help improve governance, build trust among trade partners, and support accountability. It will explore how to achieve this while ensuring that smallholders, local communities, and indigenous peoples can benefit from international trade.
The EU REDD Facility works with partners in Africa, Asia and Latin America to understand the governance challenges driving deforestation and develop pragmatic approaches to advance land-use governance and sustainable development. This report presents highlights from our work in 2021.
As 2021 draws to a close, I’d like to take this opportunity to share some highlights from this year’s work by the EU REDD Facility.
This year we celebrated the 10th anniversary of our founding, taking the opportunity to reflect on the lessons we learned over the last decade. We’re working to ensure these insights help to shape and accelerate action for protecting and restoring the world’s forests.
The Glasgow Leaders’ Declaration on Forest and Land Use, drafted as part of the UN Climate Change Conference of the Parties (COP26) process, is a significant achievement. The Declaration brings more than 130 countries to work collectively to halt and reverse deforestation by 2030.
We’re collaborating with partner countries in Africa, Asia and Latin America to understand the governance challenges driving deforestation, track private finance for tropical forests, and develop pragmatic approaches that monitor and deliver change for forest and land-use sector governance.
Assessing the revised climate plans of several of our partner countries, we’ve seen many opportunities to work in partnership to address forest land-use sector challenges. But we’ve also found a mixed picture in terms of overall pledges to reduce emissions, and forest-related targets.
In launching our Transparency Pathway, we offer a pragmatic method for turning policy aspirations into measures to decouple deforestation and trade. Our first Transparency Pathway insight demonstrated how supply chain data can be used to develop new understandings of commodity trade contexts. This information unlocks potential for partnerships between producers, consumers, and trader groups to shift commodity markets towards sustainability. Building on our partnership with the Trase Initiative and the support we provided to our Indonesian partners tracking jurisdictional sustainability, we found growing interest from our partner countries in supply chain transparency approaches.
This year we gave our flagship Land-use Planner a major overhaul. Partners in Africa, Asia and Latin America used the tool to help develop land-use scenarios, compare social, economic and environmental impacts, and weigh policy decisions. The tool is now available in 6 languages and more than 100 participants have been trained throughout the year, now taking the tool forward in their own programmes and land-use planning activities across the globe.
In 2022, we look forward to:
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On the second day of the UN Climate Change Conference (COP26) in Glasgow, world leaders announced a pledge to save and restore our planet’s forests. With that deal came a long list of commitments from public and private sector actors to combat deforestation.
These included ambitious financial commitments to support forest protection and zero-deforestation commodities – including $7.2bn from the private sector – as well as commitments to align investments to sustainable land-use objectives. For instance, CEOs from more than 30 financial institutions, with over $8.7 trillion of global assets, have committed to eliminate investments in activities linked to agricultural commodity-driven deforestation. These commitments add up to almost a decade of announcements aimed at mobilizing private finance to support forests.
Despite this global recognition of the importance of unlocking private finance at scale to address deforestation, there is still very limited information available on the volume of capital flows into land use. These financial flows are not tracked or reported consistently. Monitoring of private finance is challenging across any sector, yet tracking flows related to land-use change in tropical forest countries is particularly challenging for many reasons. These include the issue of defining what constitutes sustainable land-use; the difficulties in accessing disaggregated data on private flows due to confidentiality and market regulations; and the very nature of land-use activities which are embedded into often largely informal rural economies.
Building robust approaches to track private flows in land-use is essential to increase the transparency of investments impacting forests and ecosystems, hold actors accountable to their commitments, and measure progress.
On 8 November, the EU REDD Facility hosted a COP26 side event to explore tracking private finance in tropical forest countries. The virtual event provided a public platform for practitioners who are paving the way towards building approaches that shed light on the private sector’s role in financing nature-based solutions and sustainable land-use.
Three presenters spoke to this topic from different angles:
Their remarks were followed by a question and answer session. We invite you to watch the event recording.
At the COP26 Indonesia Pavilion on 8 November, European Forest Institute (EFI) expert Thomas Sembres presented ideas on promoting sustainable trade through transparency and traceability in forest, agriculture commodities and trade. Speaking at the Indonesian Pavilion, Sembres made the case for raising the visibility of sustainability, and for creating more differentiation in global markets between what is sustainable and what is not. This needs to be done at scale for mainstream markets, he said, “not just for the niche markets of certified or premium products.”
While more robust traceability systems are needed as a support to more visibility for sustainability, they will not be enough unless accompanied by broader access to information, said Sembres. “Most traceability systems that exist nowadays are non-transparent traceability systems. This means that most market actors don’t have access to this information and cannot use it to promote sustainable production and trade.”
Bringing transparency to a traceability system is a delicate task, he said, with some actors fearing that more accessible information would be used against them. “At EFI we are working on this delicate task of helping governments use supply chain transparency to encourage progress towards sustainability.”
On the question of bridging differences between producer countries and consumer countries related to transparency and traceability systems, Sembres confirmed that more data was now available than ever before – but said that dialogue between market actors or between governments remained difficult. The key reason for this gap are the complexity of numerous data and traceability platforms, he said, along with distrust around the use of the data.
What is needed now, Sembres said, is simplicity and trust based on transparency and inclusive, structured and equitable processes on choice of data sources and data use. The experience of Terpercaya was a good example of how this could be achieved, he said.
“We need to build supply chains of understanding and trust. The Transparency Pathway is a way to bring public and private supply chain actors together to shift mainstream commodity markets towards sustainability.”
The EU REDD Facility engages with the Ministry of Economy, Planning and Regional Development (MINEPAT), IDH and WWF in the development of at least two Local Land Use Management and Sustainable Development Plan (PLADDT) at the municipal level.
Global supply chains are notoriously complex and opaque, making it very difficult to address sustainability issues in mainstream markets – including deforestation, sustainable livelihoods, child labour and land grabbing.
In recent years, however, there’s been a surge of global supply chain transparency instruments, data and analysis to help company and government efforts to stop deforestation associated with commodity trade. These include:
These advances in supply-chain transparency are transforming capacities to identify more systematically the greatest opportunities for action. For instance, subnational data analysis across major commodity producing countries in the tropics shows that the vast majority of deforestation linked to the production and trade of agricultural commodities occurs in a handful of places where the commodities are produced.
However, this is not where efforts to manage deforestation risks in commodity supply chains are systematically concentrated.
Traditional approaches to tracing and verifying forest-risk commodities rarely penetrate a market far enough to be able to separate the bad from the good, at scale. The bad is often kept hidden in complex and opaque supply chains. Good practices like sustainable production don’t get the market visibility they deserve, and thus often fail to receive incentives from commodity markets to sustain their efforts.
The following are illustrations of the proportion of total world production covered by a sustainability certification scheme (green) versus the proportion that concentrates 80% of commodity-driven deforestation within four global supply chains (red). These are estimations made by EFI based on various sources.
This is a situation without prioritisation of efforts, with a high disconnect between areas concentrating the highest risks and voluntary certification and verification efforts.
Clearly, the data revolution alone is not enough. Many actors are overwhelmed with information or remain unable to seize the opportunities that it can provide. Increasingly, the most significant challenge is making data useful for specific policy purposes, based on shared understanding of trusted information.
A new approach is possible: one that leverages transparency at both ends of major agricultural commodity supply chains, and that can turn policy aspirations into pragmatic measures to decouple deforestation and trade.
Our new Transparency Pathway offers a pragmatic method to shift commodity markets towards sustainability, by harnessing the potential of existing information and transparency instruments.
The Transparency Pathway is a tested method that builds on our experience in supply chain transparency in various countries. In particular, it draws on our partnership with Trase, the first initiative to unlock subnational supply chain transparency at scale in tropical countries.
The method charts six pragmatic steps designed to make collaboration between public and private supply chain actors more impactful and inclusive, while reducing costs and gaining positive visibility in global commodity markets. Incremental information disclosure is used as a mechanism to reduce information asymmetry among actors, improve governance and support increased accountability.
These steps are adaptable to the country and supply chain context, and the whole process can be applied to any measurable sustainability issue.
We have chosen to take a jurisdictional approach in the Transparency Pathway for several reasons:
Governments, supply chain organisations and anyone convening a multi-stakeholder process to improve the sustainability, governance and reputation of a sector or supply chain will find the Transparency Pathway a practical guide for harnessing the transformative potential of data.
Its principles have been informed by several initiatives supporting the sustainability of commodity supply chains. These initiatives have facilitated constructive engagement among stakeholders, and made the Transparency Pathway a tested way to inform domestic policy making, investment decisions and commodity trade.
We invite you to explore the method further – take a look at the new Transparency Pathway website and don’t hesitate to get in touch for more information.
This year, COVID-19 brought unprecedented challenges for the world’s forests and the people depending on them. The pandemic has had serious social, economic and environmental consequences in our partner countries. Forest-risk commodity exports decreased dramatically, jeopardising financial security in agricultural sectors. At the same time, operators and producers prioritised tactics for their economic survival over environmental standards.
