Business

Global companies have been seen facing US $ 53 billion in damage from deforestation

Logs are stacked in a wood mill surrounded by charred and recently deforested fields near Porto Velho, Brazil in 2019 (AP pic)

London: Global companies supplying commodities like livestock, soybeans or rubber will lose around $ 53 billion due to deforestation unless they take action.

In a survey of more than 500 global companies, the CDP climate detection platform identified risks such as extreme weather, changes in consumer preferences, as well as market and reputation impacts from commodity-related forest loss.

The London-based nonprofit said in a report on Monday that addressing these risks would cost $ 6.6 billion in coming years.

“The destruction of the world’s vital forests poses serious risks to climate, nature and the economy and also increases the risk of future epidemics,” CDP Assistant Director of Forests Sarah Frozish said in a statement.

“There is a strong business case for companies that provide goods sustainably and take steps to protect forests.”

While more companies are reporting their carbon footprint and making pledges to cut emissions, actions related to deforestation have been delayed, in part due to the opaque supply chains of some commodities.

The CDP assessed 553 companies in 2020 with exposure to seven major commodities against 15 performance indicators of what companies could do to tackle deforestation. These measures include board-level oversight, ambitious targets, and stringent supply chain controls.

While there has been some progress, only 1% showed what CDP considers to be a best practice in tackling forest loss.

Firms using soy or livestock products, such as meat or leather, backed out of companies exposed to palm oil or timber in setting traceability and certification targets.

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