OECD Observer No 315 Q3 2018

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Data vs deforestation: A breakthrough in supply-chain transparency Thomas Sembres, EU REDD* Facility, European Forest Institute (EFI)

deforestation-free trade by forming The Amsterdam Declarations. How do we transform these aspirations into action?

©Rickey Rogers/Reuters

Until now, the complexity and opacity of global supply chains has made it difficult to tackle deforestation within mainstream markets. Much effort has been invested in traceability and certification but for the vast majority of commodities with deforestation risks, there is simply no information to support action and policy implementation. The data revolution underway may provide solutions.

Advancing deforestation in the Amazon Basin We are eating our way through tropical forests. Whether it’s a cappuccino for breakfast, a burger for lunch or a chocolate bar as an after-dinner treat, the things we consume in OECD countries are often linked to deforestation in the tropics, where trees are falling at alarming rates. Agricultural expansion to produce commodities like beef, soy, coffee, palm oil and cocoa has driven over 70% of tropical deforestation in the last decade. Deforestation has a significant impact on local livelihoods in developing countries. It destroys the habitats and ecosystem services that underpin the security of our water, food, and energy resources.

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Deforestation damages climate stability, but also business reputations. It is becoming increasingly difficult for companies to ignore the risks of environmental damage in their supply chains. In fact, several hundred companies with a multi-trillion-euro combined market value have made a commitment to eliminate even the possibility of deforestation from their supply chains. In 2014, world leaders from 18 OECD countries and 22 other countries signed the New York Declaration on Forests, a global pledge to halve the loss of natural forests by 2020, and end it by 2030. Since 2015, seven European countries have joined forces in shifting towards

A global, open-access initiative led by the Stockholm Environment Institute and Global Canopy, Transparency for Sustainable Economies, or Trase for short, reveals the detailed connections between internationally-traded commodities and the places where deforestation is happening. It does this by processing large and disconnected datasets of customs records, fiscal registries, production censuses, and transportation tracking systems that had been previously untapped. By tracking commodities from their local places of production to consumer countries through exporters and importers, Trase can systematically link the activities of supply-chain actors to specific production areas and better identify risks and opportunities. This has enabled Trase to map regions in Brazil where soy production is no longer encroaching on forested areas, for instance, and where companies have made commitments about the sustainability of their soy production (see map). Trase’s director, Toby Gardner, explains: “As transparency improves, supply-chain actors have a greater incentive to work together to address environmental and societal problems in producer regions.” At the European Forest Institute, we are working with Trase to develop applications tailored to the needs of governments on both ends of the


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