The UK Environment Act 2021 sets out an important new suite of measures to tackle imported deforestation, by requiring companies to implement due diligence systems (DDS) for forest risk commodities in their supply chains. Whilst importing companies have been legally obliged to have DDS in place for timber and wood-based products since the introduction of the EU Timber Regulations (EUTR) in 2013 (now UKTR in the UK), new legislation means responsibilities will extend to companies buying other commodities associated with widespread deforestation.
Land-use change, including habitat loss and degradation is the leading driver of biodiversity loss globally (ZSL, 2020). Tropical deforestation is also the second largest anthropogenic source of CO2 and a significant proportion of these emissions are driven by international trade (Global Environmental Change, 2019). Seven key commodities are responsible for an estimated 65% of annual tropical deforestation risk within UK supply chains (JNCC, 2021). These are cattle (beef and leather), cocoa, coffee, maize, palm oil, rubber, and soy. As such the proposed due diligence regulation on forest risk commodities aims to reduce the UK’s imported deforestation footprint.
ZSL’s Sustainable Business and Finance team are committed to boosting corporate best practice and welcome the new legislation, however the government must work to ensure secondary legislation is both robust and ambitious. Deforestation risk is complex and dynamic, and legislation must be flexible enough to adapt to new challenges or new deforestation drivers as they emerge.
We have recently responded to Defra’s open consultation on ‘Implementing due diligence on forest risk commodities’, which sought input from stakeholders on how the new requirements should be rolled out. Many important elements of the scope of requirements are currently undecided, in particular the commodities being legislated for and the criteria for which companies are or are not included.
We call on the UK government to:
- Include a broad scope of commodities from the start, at a minimum covering the proposed seven; cattle (beef and leather), cocoa, coffee, maize, palm oil, rubber, and soy
- In addition to these, aquaculture and other sectors that drive deforestation of vital mangrove habitats should also be considered.
- Utilise current understanding of trends and projections, to ensure inclusion of commodities which may have small but expanding footprints.
- Regulate all companies in forest-risk commodity supply chains, irrespective of turnover, whilst expecting large companies to do more, in line with their sourcing volumes and capacity to leverage change.
- Set ambitions for the regulation to extend beyond legality by integrating other sustainability indicators. A narrow focus on legality not only misses the well-known issue of ‘legal deforestation’, but may even disincentivise producer countries from improving governance structures that would raise the standard of ‘legal deforestation’
We recommend companies start preparing for the new requirements now, by introducing sustainable sourcing policies and mapping their supply chains. As the focus of due diligence is risk mitigation and risk avoidance, companies should engage suppliers and invest in their supply chains to drive meaningful change at producer level to tackle risk ahead of legislation entering into force.
ZSL will be following the outcome of the consultation closely and encourage others to do the same. We believe this legislation is a vital piece of the puzzle to reduce commodity-driven deforestation and ensure a world where wildlife thrives.
For more information, see https://consult.defra.gov.uk/international-biodiversity-and-climate/implementing-due-diligence-forest-risk-commodities/