ECONOMY

Nestlé and Unilever CEOs: we will make our supply chains deforestation-free

The writers are the chief executives of Nestlé and Unilever

Acute crises don’t magic away chronic ones. In fact, an exclusive focus on today’s pressures risks making those of tomorrow far worse.

Nestlé and Unilever are contending with some significant challenges right now: food and energy security and sharply rising commodity prices. Alongside these, the effects of climate change are rippling across our value chains. And the impact will only get worse. That is why we are committed to net zero carbon emissions.

The business upsides of solving these global challenges are clear: consumers are demanding more sustainable products, workers want to work at more sustainable businesses, and investors recognise the risk and opportunity.

In our own companies, we’ve turned our commitments into action, but we need to see more from the food, land and agriculture industries. The sector contributes 22 per cent of global emissions, and fully half of that comes from deforestation and land conversion to provide food, fibre and fuel.

We know this isn’t easy. Nestlé and Unilever’s efforts to eliminate deforestation from our supply chains, whether for cocoa or palm oil, have often been the subject of public debate. But unless we end deforestation, achieving net zero is impossible.

New analysis launched today by the UN’s Race to Zero in collaboration with the Science Based Targets initiative finds a fivefold increase in the number of major companies in the forest, land and agriculture sector that are committed to net zero.

But this encouraging momentum masks two concerns. Even though investors responsible for nearly $9tn in assets are looking to eliminate commodity-driven deforestation from their portfolios, a majority of companies critical to tackling tropical deforestation are yet to set a net zero target.

Moreover, of the 148 companies who have made such climate commitments, only 6 per cent have made strong progress on tackling deforestation to date, based on a review of their performance by the Global Canopy. This lack of progress risks derailing the net zero commitments of over 94 per cent of major food and land use companies.

That’s an issue for all of us. Four things must happen, urgently.

First, all companies with land-based emissions must demonstrate how their business models and value chains can be made consistent with a net zero world. To reiterate: there is no net zero without ending deforestation. A new methodology about to be launched by the Science Based Targets initiative offers the promise of transparent reporting on progress made by companies in the food, land use and agriculture sector.

Second, our sector must go beyond just managing deforestation risks in our supply chains if we are to help conserve and restore the world’s forests and natural ecosystems, while promoting sustainable livelihoods.

That means embracing regenerative agriculture to develop “nature positive” supply chains. It also means recognising the legitimate domestic interests of developing countries, specifically those of smallholders, indigenous peoples and local communities. Tropical forest countries often have to balance competing environmental and socio-economic priorities — development, jobs and livelihoods — so we need solutions that deliver all these objectives together.

Third, business must fully harness the potential of technology to track, improve and report on progress. There have been huge advances in increasing the visibility of what is happening to forests in real time. Much of this can now be delivered at low-cost.

Fourth, governments, multilateral institutions and development banks, with banks, investors and business, must help accelerate forest finance ahead of the COP27 summit in November. Nature-based solutions, including forests, could deliver over a third of the emissions reductions needed, but currently receive just $133bn of available climate finance. We need to repurpose $1.8tn of environmentally harmful subsidies so that available finance is commensurate with the size of the challenge and opportunity.

Unilever and Nestlé recognise that net zero is a central goal for the global economy. We are working to make our key commodity supply chains, considered to have the highest impact on deforestation and the conversion of natural ecosystems, deforestation-free by the end of 2025 and to support the communities that protect them.

There is a fervent debate about the merits and methods of sustainable business. But action is what is now needed. Ending deforestation is a necessary condition of achieving net zero, delivering benefits for consumers, communities and companies alike.

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