Deforestation Scorecard: Assessing Corporate Action on Deforestation Amid Growing Regulatory Risk

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Deforestation Scorecard: Assessing Corporate Action on Deforestation Amid Growing Regulatory Risk

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Deforestation-free forests

Ending deforestation is essential to achieving net-zero emission targets and mitigating the worst impacts of climate change. However, the production of agricultural raw materials continues to drive forest loss at an alarming rate. Investors are looking to companies to mitigate these and other risks, including new global regulations, by incorporating comprehensive, time-bound no-deforestation policies into their transition plans.

To assess the efforts of some of the world's largest companies to eliminate deforestation from their supply chains at a fundamental level, Ceres developed the Deforestation Rating, simply by asking: Does the company have a robust no-deforestation policy?

Key findings from 53 companies:
  • Most of the companies assessed have a no-deforestation policy, but only 18 companies have a no-deforestation policy at the company level that covers all commodities subject to the new European Union regulation.
  • Only four have policies that span all of their supply chains and all of their sourcing regions, exposing them to reputational and market risks.
  • Most companies have specified a deadline for when they intend to fully implement their no-deforestation policies. But only eight of these business policies are ambitious enough to meet the recommended 2025 no-deforestation deadline.
  • Only five include a cut-off date banning the production of raw materials on deforested land after 2020. A cut-off date of 2020 is necessary to comply with new EU regulations and removes the incentive for continued deforestation.

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