One of the greatest challenges of the 21st century will be finding a way to feed 10 billion people by 2050. Forest Trends seeks to transform current agricultural practices so this challenge can be met while forests and other ecosystems can be preserved.
Agriculture alone accounts for over 70 percent of deforestation in tropical and sub-tropical countries. The majority of this deforestation is tied to the “big four” agricultural commodities – palm, soy, timber & pulp, and cattle – that pervade vast corporate supply chains and end up in virtually every aisle of the grocery store.
Deforestation posed by large-scale commercial agriculture comes with a laundry list of interconnected environmental and social problems. For example:
- In Myanmar, government-granted agribusiness concessions result not only in the widespread clearing of forests, but also force ethnic minority groups off of their lands, inflame old grievances that fuel armed conflict, and destroy critical wildlife habitat.
- In Brazil, the ongoing and well-documented pressures on the Amazon rainforest are compounded by emerging threats to the southeast, where rapid agricultural conversion of the Cerrado region’s rainforests and savannahs threatens to radically alter the water cycle.
- In Ghana, the cocoa sector (itself a major driver of deforestation historically) is acutely vulnerable to the altered temperatures and precipitation patterns brought about by climate change, That endangers the livelihood of one in four Ghanaians.
Forest Trends seeks to transform current agricultural practices, assuring food security for all while preserving intact forests and other ecosystems at the same time.
We work on innovative financing mechanisms for sustainable agriculture on an industrial scale.
We track corporate commitments to manage deforestation within agricultural commodity supply chains.
We track and advise on market-based systems that protect water quality through trading and incentives to invest in watershed protection.
We promote a community-driven “rainforest to table” model for agriculture and non-timber forest products that can save Latin American forests and benefit the people who call them home.
Finance & Markets for Agriculture
Improving the sustainability of agriculture requires transforming financial incentives for farmers and landowners, including scaling up overall flows of finance toward improved productivity and land conservation.
Traditional financial systems fail to factor in the environmental costs of agriculture, making sustainable practices more expensive in comparison to industrial agriculture. But that is slowly changing, thanks to forward-thinking financial institutions, governments, and companies.
We demonstrate that sustainable agriculture is a good investment
Investors channeled $2 billion into sustainable agriculture investments between 2004 and 2015, accounting for nearly a quarter of all nature-based “conservation investments” tracked in our research.
These banks, fund managers, corporations, and other investors aren’t simply being philanthropic. They’re looking for competitive, sensible additions to their portfolios – and they’re finding them. Six in 10 of the private investors we’ve surveyed expect to see returns of 5 to 15 percent from their investments in sustainable agriculture.
In order for this emerging asset class to continue gaining steam, transparent information is critical. Forest Trends is committed to filling that gap as demand for investable sustainable food opportunities continues to grow.
We find innovative strategies to overcome finance hurdles
Forest Trends works in key tropical forest countries to deploy creative approaches that leverage public and private finance to overcome obstacles to large-scale sustainable agriculture.
In Brazil, we’re finding ways to use international public funding through the UN program Reducing Emissions from Deforestation and Forest Degradation (REDD+) to help Brazil accelerate its transition to more productive and sustainable agriculture. Large-scale performance-based REDD+ payments can be used to unlock more favorable loans for landowners who practice good land stewardship, lower risks borne by the public banks that provide those loans, and attract private investment from food producers looking to meet sustainability goals.
In neighboring Peru, deforestation in the Amazon region accounts for over half of the entire country’s greenhouse gas (GHG) emissions. Together with partner organizations and the Peruvian government, we’re tackling key drivers of deforestation in the Amazon – supply chains built around coffee, cocoa, and oil palm – by implementing a “Production-Protection Compact” that simultaneously protects forests and benefits small-scale farmers. By making this sustainable development vision a reality, we can replace the vicious cycle of poverty, low productivity, and deforestation with one of prosperity, productive agriculture, and forest conservation – all while helping Peru meet its goal of reducing GHG emissions by 30 percent.
In Ghana, we’re working with a broad coalition to make “climate-smart agriculture” practices less risky for cocoa farmers by increasing their access to credit and developing specialized insurance products. In doing so, we can turn what has historically been a major driver of environmental harm into a resilient and sustainable source of income for Ghanaian farmers.
We document best practice for greening agricultural subsidies
Governments around the world paid farmers and other private landholders nearly $10 billion in 2015 to reward them for good stewardship of lands critical to watershed health. Our research highlights that the traditional agricultural subsidy model can be successfully retrofitted for the green economies of the future – to focus on long-term landscape health as well as agricultural productivity.
Supply Chains for Agriculture
Unlocking conservation finance alone will not ensure a successful transition to sustainable agriculture – not unless businesses on every continent take decisive and comprehensive action to remove environmental and social harms from their supply chains.
Fortunately, companies across the entire global commodity value chain—producers, processors, traders, manufacturers, and retailers – are taking unprecedented action to clean up these supply chains. Often, they’re motivated by demands from stakeholders: consumers, investors, and governments no longer willing to tolerate business as usual.
Forest Trends created its Supply Change Initiative to provide freely available news, data, and analysis related to companies’ progress toward sustainable and deforestation-free supply chains. The online portal Supply-Change.org tracks supply chain commitments from hundreds of companies – from little-known producers and traders to consumer-facing brands – while comprehensive reports shine light on global trends, business developments, and ongoing challenges.
Are these companies succeeding in meeting their goals? Supply Change’s latest analysis finds that 44% of companies with deforestation risk exposure have still not made public sustainable commodity commitments. Just 8% of companies tracked have set “zero/zero net deforestation” as their goal, and less than one-third of those companies have reported quantitative progress toward that goal. That leaves investors clearly exposed to material deforestation risks, but with little information to act on.
As our research shows, there’s much more work to be done, but the good news is that change is happening. Along the way, Forest Trends and our partners will continue to track private sector progress in this context and serve as a resource to companies as they work toward existing commitments and develop new ones. In the process, we’re empowering consumers, investors, governments, and others with the information necessary to hold companies accountable.
Legality & Governance for Agriculture
At least half of all tropical deforestation in the last decade has been for commercial agriculture, to meet rapidly growing global demand for food, fuel, and fiber. Much of this conversion of forests to agricultural land has been taking place in the context of complex, contradictory, and poorly implemented regulations governing forest areas and surrounding landscapes. Forest Trends calculates that nearly half of total tropical deforestation between 2000 and 2012 was due to illegal conversion for commercial agriculture – involving corruption in the issuance of licenses, illegal use of fire to clear forests, or unfair compensation to local communities.
Companies at every stage of the supply chain have been making ambitious public commitments to reduce the deforestation impacts of forest risk commodities they source. Measures like voluntary standards and certification schemes have raised the sustainability “ceiling,” but they are not enough.
Forest Trends works to raise the “floor” for what constitutes acceptable agricultural practices by devising better policies to govern forests. We do so by engaging governments and policy makers to consider regulatory options which can support private sector commitments and which also mandate efforts to eliminate deforestation from supply chains.
Our Forest Policy, Trade, and Finance Initiative supports accountability and transparency in forested countries as they develop an overall agenda against deforestation. We work to better understand whether it is feasible to have demand-side trade policies that reduce importation of a broad range of commodities produced from illegal deforestation. We do this by seeking to:
- Establish a global norm that commodities produced on illegally cleared land should not be bought and sold in the open by respectable parties. Our research shows that such import legislation is already succeedingat keeping illegally harvested wood off the market in the European Union and the United States. This type of legislation could be adapted for agricultural commodities.
- Encourage political leaders and policy makers in forest nations to see illegal forest clearing for agriculture as a threat to their economies, people, and sovereignty. We support forest country leadership advancing a shared policy agenda to address illegal deforestation.
And on the private sector side, our Supply Change initiative tracks companies’ efforts to remove destructive agricultural practices from their commodity supply chains. By increasing access to transparent information, we help stakeholders – investors, businesses, governments, non-profits, and consumers – make informed decisions that can spur more businesses to act.