Deforestation is both a big risk for the future and a potential source of hope. The systematic hollowing out of the world’s trees contributes up to 15% of all greenhouse gases. But then reducing forest loss could be one of our most effective climate mitigation strategies, because trees are great at storing carbon.
The new Forest 500 list identifies the 500 companies, investors, and countries that have the most power to stop deforestation. It includes countries that export commodities like timber and palm oil, importing countries that process those into products, major companies that package and retail forestry-derived products, and investors who look to make a profit from the whole process.
The ranking comes from the Global Canopy Program, a London nonprofit, which marks participants on a scale of zero to five. Five means that, across dozens of indicators, they have the right sort of policies in place to safeguard forests; zero points means the opposite.
“We’re not saying that anyone is directly causing deforestation,” says Mario Rautner, who oversaw the research. “What we are saying is these companies can really do something about it by having the right policies, because they’re exposed to the supply chains.”
Of 250 companies in the ranking, only seven get top marks: Groupe Danone from France, Kao Corp. from Japan, Nestle from Switzerland, Procter & Gamble from the U.S., and Reckitt Benckiser, Unilever and HSBC from the U.K. These groups have made pledges under agreements like the New York Declaration signed last year. That commits governments and corporations to zero forest loss by 2030, and to eliminating deforestation from the production of agricultural products (palm oil, soy, beef) by 2020.
What stands out from the ranking is that some groups are moving quite positively while many are not doing much of anything. Companies from China and India generally have few or no policies, for instance. “China is number one importer for many of the commodities and clearly the discussion has not reached the corporate world there yet,” Rautner says. “It would be good to have more engagement with these companies and bring them on-board.”
On the investor side, some big public-facing groups, like Credit Suisse and JP Morgan Chase, get four stars. But then many less well-known asset and hedge funds do poorly: names like Fisher Investments and Geode Capital Management get zero marks, for instance. “What we need to see is the rest of the investors looking into this as well,” Rautner says.
As for the United States, its contribution is mostly on the financial side of things. Because we develop a lot of our own forestry resources, we import only 5% of the total analyzed by the Global Canopy Program. However, fully 80% of the investments in forestry commodities originate in American financial centers, for instance among the asset management groups that currently don’t have deforestation policies.
It’s important to note that Forest 500 isn’t a measure of contribution-to-deforestation, though the impact of these groups collectively is massive. Dividing up blame is hard because supply chains are so complex and because we have a limited view of deforestation on the ground. Judging companies and investors by what they say, and not everything they do, is probably the best we can hope for at the moment, especially if we want to make apples-to-apples comparisons.