‘Forest 500’ Ranks Firms’ Deforestation Policies

Only six major companies — Danone, Kao Corp., Nestle, Procter & Gamble, Reckitt Benckiser Group, Unilever and HSBC — and one investor, banking and financial services giant HSBC, have comprehensive policies in place to protect tropical forests, according to Global Canopy Programme.

The tropical forest think tank today launched its Forest 500, which ranks 250 companies, 150 investors and 50 governments’ efforts to remove deforestation from commodity supply chains on a scale of one to five. Together, these 500 control the global supply chains of key “forest risk commodities” such as soya, palm oil, beef, leather, timber, pulp and paper that have an annual trade value of more than $100 billion and are found in more than 50 percent of packaged products in supermarkets.

The ranking shows at the current rate of action the goal of zero deforestation by 2020 will not be met.

While seven of the Forest 500 companies scored the maximum number of points, at the other end of the scale 30 companies, many based in Asia and the Middle East, and numerous investors scored zero points. Countries received a range of scores, with Latin American nations scoring high in forested regions and the Netherlands and Germany coming top amongst countries that import forest risk commodities.

Other key findings:

• As a group, the 250 companies are falling short of adopting policies that ensure a speedy transition to a zero deforestation economy by 2020, but individual actors are making good progress.
• The consumer-facing home care, and cosmetics and personal care industries are shown to perform best, while the animal feed industry lags behind other sectors.
• Companies with higher revenues score significantly better than those with lower revenues. In particular, once companies surpass annual revenues of $10 billion, policy scores increase sharply, averaging nearly double that of companies below the $10 billion threshold.
• Publicly listed companies score more than 50 percent higher than privately owned companies and those with other governance structures.
• The location of company headquarters is found to be a key differentiator with the best scoring companies headquartered in North America, slightly outperforming those in Europe and Latin America, while companies in the Asia-Pacific region lag behind.
• Companies in some of the most critical forest risk commodity importing countries, such as China and India, score well below the average, with Russian companies at the bottom of the table.

About 90 percent of companies see opportunities in shifting to sustainably sourcing key forest-risk commodities, according to a CDP report that makes the business case for ridding supply chains of deforestation.