The fourth annual Forest Footprint Disclosure (FFD) Report today revealed that 100 companies have voluntarily disclosed their forest footprint, an increase of almost 15% compared to last year; however, the gap between the leaders of the forest risk commodity sectors and their peers is ever growing.
FFD welcomed the increase in discloser numbers, especially the first reports from multi-nationals such as Colgate-Palmolive Co., Groupe Danone, Gucci and HJ Heinz Company, as well as the widening geographic reach to Mexico and Japan. However, an average of 16% difference in scores between leaders and runners up across all sectors highlights that there is still much work to be done, and many companies are trailing behind. Two sectors, Industrials, Construction & Autos and Utilities had significant variances and came in for particular criticism as active corporate social responsibility in procurement appears not to be the norm.
Each year FFD asks the world’s largest companies to disclose their impact on forests based on their use of five commodities: soy, palm oil, timber and pulp, cattle products, and biofuels. Companies are categorised into twelve sectors and leaders are identified. The 2012 FFD sector leaders share a common commitment to innovation and ensuring security of supply for their future. Leadership consists of moving beyond the immediate supply chain to engagement upstream and being prepared to spend time and money on finding solutions to problems wherever they are found in the world.
FFD welcomed significant improvements from companies including Boots UK, Next, Kingspan Group PLC and Whitbread Group PLC. Four new leaders were also recognised; New Britain Palm Oil Ltd., British Sky Broadcasting, Marfrig Group and Prime Asia Leather Corporation.
James Hulse, Director of FFD said, ‘Whilst we are heartened by the significant increase in the number of disclosers in this fourth FFD annual cycle and the contribution of new, global entities, it is not just about disclosing – we are calling on companies to make a step change in their behaviour to ensure that responsible policies are integrated throughout their supply chains. This makes business sense and is what the investment community expects’.
Nvestment support of FFD grew again this year and the project is currently backed by more than 180 endorsing investors managing in excess of $12.8 trillion.
Andrew Mitchell, Chairman of FFD concluded, ‘Reducing rampant deforestation, the ultimate purpose of the Forest Footprint Disclosure Project (FFD), is not just about carbon. It is a global imperative in the move towards more responsible and sustainable use of natural capital. This underpins wealth creation in the world economy and the security of water, energy, food and health for millions of people’.
About FFD
Forest Footprint Disclosure (FFD) is a special project of the Global Canopy Programme, (GCP) initiated in 2008. FFD engages with private sector companies to ask them to disclose their current understanding of their ‘forest footprint’ based on exposure to five key commodities – soy, palm oil, timber, cattle products and biofuels – in their operations and/or supply chains. All of these commodities have the potential to be sourced from recently deforested land. FFD goes beyond simple disclosure and acts as a catalyst for investors to really engage with the companies in their portfolios on this issue. In 2012, the Forest Footprint Disclosure Request was sent to 450 global companies.
On 12th June, 2012 the Carbon Disclosure Project (CDP) and GCP announced an alliance that will see GCP’s FFD merge with CDP over two years. This strategic merger by CDP and GCP will bring corporate disclosure on carbon and the climate, water and forests under one roof, resulting in the world’s largest and most comprehensive natural capital disclosure system, and will provide companies and investors with a single, integrated source of information for these interrelated issues.
| Sector | Leader and Quote | Commentary |
| Agricultural Products | New Britain Palm Oil Ltd“For New Britain Palm Oil Ltd (NBPOL) it is fundamental that any development achieves an optimal balance between social development, conservation and agriculture. It is also vital that carbon accountability be embedded into an agricultural companies thinking and guide all its actions. By excluding from conversion those areas that store large amounts of carbon, we will significantly reduce greenhouse gas emissions and preserve the natural infrastructure that supports our business. In maintaining these commitments, transparency needs to be achieved at all levels. The Forest Footprint Disclosure is singularly important in the provision of impartial assurance, preservation of transparency and in communicating a company’s performance to a wider stakeholder audience.”
Nick Thompson CEO |
Take up of disclosure has increased in Latin America and Asia. However, engagement in disclosure by the agriculture production sector continues to be slow. 2012 respondents come from those companies with long standing commitments to investing in sustainability and setting collaborative standards. |
| Food and Staples Retailing | Sainsbury’s Supermarkets Ltd“Sainsbury’s is delighted to be FFD sector leader for Food & Staples Retailing in 2012. As part of our 20×20 Sustainability Plan Sainsbury’s is aiming that all our own brand products do not contribute to global deforestation and that we are the leading ‘tree friendly’ retailer planting new trees at home and abroad. Ultimately, procuring sustainable commodities is essential for our reputation, for guaranteeing continuity of supply and to the long- term success of our business. Looking forward, the key focus for this year is to continue the progress we have made on converting products to sustainable palm oil and to connect the demand for sustainable soya to actual physical supply.”
Judith Batchelar Director of Sainsbury’s Brand |
Participation grew geographically. Action on timber and palm is universal, with soy, beef and biofuels more patchy. Retailers are in general pooling their resources to create a consistent response to standards setting, especially through their participation in the Roundtables, and by working together, companies are reducing the cost of addressing these commodity challenges. |
| General Retailers | Marks and Spencer Plc“Being positioned as sector leader every year since
the Forest Footprint Disclosure Project began is an honour and reflects the consistent effort M&S employs to improve management of forest risk commodities.
Of course we remain focused on tackling the many challenges that remain, for example the absence of true traceability in mainstream leather supply chains, and are committed to collaboration with FFD alongside industry, academic and NGO partners to develop solutions to these challenges. This partnership approach is as essential now as it was in 2009 when forest footprint disclosure was introduced.”
Fiona Wheatley M&S Plan A Sustainable Development Manager Raw Material |
The regional differences are quite marked, with North American companies are generally still grappling with timber issues, especially around packaging, although there have been some good commitments on palm. In other regions, noticeably Europe, a wider number of commodities are seen to be material and substantial commitments are being made to use sustainability as a differentiator. |
| Industrials, Construction and Autos | Dalhoff Larsen & Horneman (DLH A/S)“We are honored to be recognized as a sector leader for a third year in a row. We take managing our impact on the world’s forests very seriously and do our utmost to collect information on the origin of the timber we source. This year our efforts have focused on implementing an improved version of our due diligence system, which helps us manage our forest footprint even better. Promoting sustainable forest management is a key element of DLH’s environmental policy. We believe that sustainable management of the world’s forests is the best and most effective way to reduce the global forest footprint and we would like to acknowledge FFD’s work to improve the understanding of business impact on forests.”
Peter K. Kristensen Vice-President, CSR & Environment |
Participation widening with the addition of another company from the auto sector, however, this sector needs mainstream participation as it continues to be dominated by companies with long standing commitments to sustainability or those who use their profile as a core business differentiator. Kingfisher’s net positive strategy is a good example of how their leadership is articulated. |
| Media | British Sky Broadcasting“At Sky, we’re delighted to be rated the leading company in the Forest Footprint Disclosure (FFD) Project for the media sector this year. Taking part in the FFD Project keeps on challenging us in our work with our suppliers so that we improve the way we source the products
we use in our business day to day that come from the rainforest. It’s also a great fit with Sky Rainforest Rescue, our partnership with WWF, working on the ground to help local farmers find new market opportunities for products from the rainforest instead of deforesting their land.” Fiona Ball Head of Environment & Engagement |
Participation in this sector continues to be restricted to a small number of opinion formers. The extension of Walt Disney’s timber procurement standards, which gained so much publicity this year, has again thrown the spotlight on its competitors’ lack of progress on these issues. |
| Oil and Gas | Greenergy International Ltd.“Like other oil companies, we blend biofuel into our petrol and diesel to meet our biofuel supply obligations. We seek to minimize our impact on forest commodities by manufacturing our own biofuel from food industry wastes. Where we need to use crop-based biofuels, we choose to disclose their origin on our website and on BioCarbon Tracker. By making available detailed information about our biofuel supply, we correct inaccurate assumptions and manage reputational risk.”
Tamara Earley Managing Director |
The debate about use of food-grade feedstocks for biofuel and sustainable supply for bio-energy this year has meant that this sector has been under considerable scrutiny. Those companies responding to FFD continue to demonstrate responsibility, offering market differentiation underpinned by sophisticated feedstock control systems. |
| Packaged Foods and Meats | Marfrig Group and Unilever“Building on the environmental, social, economic, technological, value chain and product dimensions, the Marfrig Group has furthered its sustainability strategy. Participation in the FFD has been very important to determine the guidelines and make
us search for continuous improvements to our management system. In the 2011 report, we were highlighted as the most evolved company and now, in this report, we are proud to rank as the Leader of the Sector, which shows our evolution has been consistent and solid.” Clever Pirola Avila Director of Sustainability “Unilever is honoured to be recognised as sector leader for the second year. We applaud the work of the Forest Footprint Disclosure Project in driving more companies to embed the right sustainable practices in their supply chains. We wish to thank all of our partners for their support in 2012. Delivering our 100% certified sustainable palm oil target 3 years ahead of our original schedule is an achievement of which we, our suppliers and our NGO partners can all be very proud. Moving to traceable supply and making progress across all key agricultural resources is our intent, and we look forward to continue working in partnership to achieve this.” Gail Klintworth Chief Sustainability Officer |
The extension of participation into new markets in this sector, together with the addition of the global reach of the iconic Heinz brand, are warmly welcomed, however, the performance of the sector does vary widely. |
| Paper and Forest Products | Mondi PLC“At Mondi, we believe in responsible, sustainable forestry. This means balancing growing demand for forestry goods and services with enhanced ecological and social values to meet the needs of our business and our customers. To secure continuous access to sustainable and credible sources of fibre, it is therefore in our interests to ensure that we support the requirements of responsible forestry practice, from the management of our own forests and the procurement of wood and fibre, through the supply chain. We ensure FSC certification for all our owned and leased forests and we use chain of custody at all processing operations to ensure legality and sustainable wood sourcing.”
Uwe Fölster Head of Sustainable Development |
The level of participation across this sector continues to grow, especially in Scandinavia. Given the difficult times the paper and board industry is undergoing, as the industry restructures in response to changes in global demand patterns, this commitment is to be welcomed. |
| Personal Products & Household Products | L’Oréal“L’Oréal is honoured to be once again nominated as
a sector leader of the FFD for its leading practices in managing forest resources. As the world leader in beauty, L’Oréal’s commitment is at the highest level: More than ever, it is crucial to protect forests in emerging nations. Forests that represent an authentic natural capital for humanity today, and for future generations to come. Recognizing our leading role, next steps is to promote best practices along the value chain and encourage our suppliers to measure and disclose their forest impact throughout the CDP/FFD merge.”
Alexandra Palt Director, CSR & Sustainability |
One of the most dynamic sectors with new entrants ranging from large multinationals to regional and smaller operations. The ongoing consumer and NGO campaigning on raw material sources continue. Companies who are in command of their supply chains benefit from reputational security and potentially new communication opportunities. |
| Textiles, Apparel & Luxury Goods | PrimeAsia Leather Corporation“PrimeAsia’s commitment to the environment guides us to create the highest quality leather with the lowest lifecycle footprint through innovation and engagement of employees, customers, suppliers, and the communities in which we operate. In 2012, PrimeAsia set ambitious five year thirty percent energy, water, and waste reduction goals. To collect benchmark data, all PrimeAsia leathers were carbon and water foot-printed. Innovative engineering projects including solar hot water, biomass boilers, energy-efficiency, and re-using waste will continue to be implemented. PrimeAsia also understands the need to collaborate with the supply chain, and in 2012 had suppliers answer the first of annual sustainability questionnaires detailing their own environmental policies and actions.”
Sarah Swenson Environmental Manager |
Wider participation and an increase in its geographic reach. Finding responsible supply options for companies in the Textiles, Apparel & Luxury Goods sector continues to be challenging as the evolution of traceability and certification systems is still immature. |
| Travel & Leisure | British Airways“We are incredibly proud to have achieved sector leader status; we believe the FFD contributes to
the fulfilment of our corporate vision to lead the airline industry in responsible behaviour; it also demonstrates our comprehensive and widespread approach to addressing climate change where we work closely with our service partners, to ensure our principles apply throughout the supply chain. In the coming year we will extend the scope of our report to achieve wider footprint coverage and also we will set specific objectives with our service partners to improve accuracy of data and to extend the volume of certified products.”
Alessandra Cuzzoli Environment Executive |
The inclusion of Alsea of Mexico builds FFD’s global perspective and food service coverage. With commodity and food inflation growing in significance, building traceability and security of supply are big issues for this sector. |
| Utilities | Drax Group“Drax is very proud of being recognised again by FFD as the leader in the utilities sector. We are committed to an extensive programme of increasing the amount of biomass we use and believe it to be a prerequisite that any biomass used should be sustainable. This not only makes sense from a business perspective, that is longevity
of feedstock supplies, but it is also essential for environmental, economic and social reasons. We intend to remain at the forefront of the introduction of credible standards for solid biomass procurement, anticipating that the experience gained will be beneficial as clarity evolves in the regulations for the definition of sustainability standards and associated methodologies.” Dr Nigel Burdett Head of Environment |
The sustainability of feedstocks continue to be under scrutiny. The lack of participation from other consumers of wood-based feedstocks is therefore particularly disappointing, especially given the efforts being made to establish sustainability criteria both for producers and buyers in the industry. |
Read the fourth annual Forest Footprint Disclosure (FFD) Report
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