Supply Chain Partnership Offers Path Away from Deforestation

September 4, 2020

By the year 2050, the world’s population is projected to reach a staggering 9.8 billion, with more than 3 billion people joining the middle class. The growing masses will need everything from housing and household products to food, which will have to be sourced from and produced on the planet’s finite land.

To feed this growing population, farmers around the world are looking for ways to increase yield and build resilience. However, expansion without consideration for social and environmental costs is where the agriculture industry draws criticism. Forest protection, in particular, is an important opportunity for global supply chains to create a positive impact in communities and on the planet, while also addressing critical business risks.

The National Wildlife Federation’s Simon Hall argues there is an opportunity for partners within global supply chains to implement sustainable farming practices and share them with partners around the world. He recently visited OSI to provide an overview of deforestation impact within the private sector and the unique position the beef industry, among others, is in to address it — while remaining competitive, and even enhancing long term outlook.

“My goal was to bring the science, leave those in the group with an understanding of the issues, and to break down preconceived notions,” Hall said. For example, even companies that are leading the industry in sustainable farming practices have a role to play to ensure others can improve their practices as well. “Not to sound too philosophical,” he said, “but we’re all connected.”

OSI Chief Sustainability Officer Nicole Johnson-Hoffman, who hosted Hall at OSI headquarters in February 2020, echoed this concern. “We have to care about deforestation even though we [in North America and Europe] are not the main contributors,” she said. “We need to care because we sell beef … and also because we breathe air and live on this planet.”

Hall spoke to more than 60 OSI employees, with many conferencing in from around the world. The participants, whose responsibilities ranged from purchasing to conducting supplier audits to managing key accounts, were each connected to responsible sourcing for OSI’s customers, who comprise some of the biggest global foodservice and retail brands. His presentation offered employees an overview of the ways just some global commodities are contributing to deforestation. But he also shared encouraging signs of change.

CLIMATE CHANGE’S SOBERING LINKS TO DEFORESTATION

Climate change, driven by greenhouse gas emissions, is deeply linked to deforestation. Tropical deforestation alone emits more greenhouse gases than any other country besides China and the United States, according to a 2016 report published by the Center For Global Development. Just four commodities — beef, soy, palm oil and paper pulp — drive 80 percent of deforestation, which is concentrated in South America and Southeast Asia, Hall said. And according to satellite analysis, deforestation in the Amazon, driven mainly by cattle farming, jumped 19 percent in 2019, the sharpest increase in nearly a decade.

“Imagine a vast landscape of beautiful, lush tropical rainforest, with abundant wildlife and biodiversity,” Hall said. “Now imagine that all completely disappearing forever. That previously intact rainforest, which was pulling in CO2, emitting oxygen and moving millions of gallons of freshwater around through evapotranspiration is now a barren and desolate landscape, often charred by fires that were started to clear the trees and brush. This results in a ‘double whammy,’ as we’ve now lost the environmental benefits that the forest previously provided us for free, and we’ve dumped a massive amount of greenhouse gas emissions into the atmosphere, which we’re paying for dearly.”

SOLUTIONS FOR SUSTAINABLE BEEF AND FOOD SUPPLY CHAINS

It’s a sobering picture, but Hall points to some encouraging signs of progress, driven by consumers, investors and businesses that understand the risks climate change poses to their longevity.

In our age of information and technology, consumers are more conscious than ever about their own environmental footprint and interested in the origins of the products they buy and food they eat, Hall said. “They want to know, ‘was it produced in a way I can feel good about, or at least not feel bad about?’ Nobody wants to buy a product that may be hurting the planet.”

These concerns are motivating businesses to meet their customers’ evolving expectations. So is the realization that climate change could hurt a company’s ability to remain competitive in a warmer and drier world. As global temperatures continue to rise and rainfall patterns change, agricultural operations could feel the strain, making it harder for companies that rely on agricultural products to remain stable and meet demand.

Hall says these shifting views and realizations are having a “ripple effect” on the way businesses view sustainability. More companies, for example, are partnering and engaging with environmental groups and academics to have frank discussions about reducing their own environmental footprints. “Bringing those actors together is important for building trust,” he said. In his own conversations with companies like OSI, he said, he strives to build bridges.

“A lot of our work is bringing in science in a way that balances business needs and conservation needs. It’s not, ‘do we pick growth or do we pick sustainability?’” he said. “There is a lot of common ground.”

Though the majority of forest-risk commodities enter the supply chain beyond direct company operations, OSI similarly sees an opportunity in addressing traceability challenges in its own supply chain through both supplier and industry partnerships. Beyond sustainable beef, OSI has been engaging with its direct and indirect suppliers about forest sensitive sourcing practices, with focus on items such as soy used for chicken feed, paper packaging products and palm oil derivatives.

“We look to best practices in sustainability reporting to help us plot our progress in supplier engagement and sustainable sourcing strategies,” said Anna Baron, OSI’s Global Sustainability Leader. OSI has committed to both CDP climate and forest reporting annually.

Some companies are also engaging in environmental projects aimed at offsetting global emissions. OSI Ukraine, for example, recently planted hundreds of trees on company property and at a nearby school in partnership with the local government. The project manager, Zhyvchyk Yevhen, said he received a “storm” of positive feedback and requests to expand the initiative.

When these sorts of projects are carried out thoughtfully, Hall said, they can also contribute to companies’ sustainability goals. “Part of it is cleaning up supply chains, but then there is the other side of the equation: Let’s do more good,” he said. “You need both sides.”

CLIMATE CHANGE AND SUSTAINABILITY: COLLECTIVE CONCERNS

Addressing deforestation should be a beef industry-wide concern, Hall said. Even companies with clean supply chains should care about the reputational risk they face for association with a product that, on a global scale, contributes to unnecessary forest loss. Companies committed to sustainability, he said, can lead this change by wielding their influence to drive progress and improvement.

“There is a need for collective action,” Hall said. “I really like the mindset of Nicole [Johnson-Hoffman] and OSI, which doesn’t just think in terms of its own supply chain, but about the industry as a whole and shared responsibility.”

Compared to how industry players used to think about environmental responsibility, Hall said, “that’s a big mindset shift.”