Forest risk commodities and the opportunities for sustainable agriculture

Deforestation and land conversion account for around 20% of global carbon emissions – more than the entire transport sector. Tackling that problem will help to mitigate climate change as well as improve social and economic conditions for 1.4 billion of the world’s poor, who rely on forests for their livelihoods.

Global demand for agricultural commodities is the primary driver of deforestation, as land is cleared to produce biofuels, soya, palm oil and beef. Alongside timber and pulp, these commodities are the building blocks of millions of products traded globally. These in turn are wealth generators, and feature in the supply chains of countless companies across sectors.

Many businesses unknowingly source products that contribute to deforestation in their supply chains, and their resulting ‘forest footprint’ (total amount of deforestation caused directly or indirectly by an organisation or product) can create unexpected valuation risks and add to their climate change impacts.

In the rush to convert land to agricultural use, we are depleting our natural capital at an unsustainable rate. Currently, there are few incentives to stop as we are creating short-term wealth and short-term solutions to hunger. So what is the solution?

The key is a more sustainable agricultural system, one which uses natural resources at the rate and in the manner in which they can be replaced naturally. Better water conservation, sustainable forestry management, use of better genetic materials to generate higher yields, less monoculture and more efficient use of artificial fertilizers – in short, ‘smart’ agriculture, driven by technological innovations and leading to increased yields, improved resilience and lower environmental impacts. That kind of agriculture isn’t just better for the planet, it is simply better business.