19-5-2024 (JAKARTA) Southeast Asia, home to nearly 15% of the world’s tropical forests, is facing an alarming rate of deforestation, with at least 1.2% of these woodlands being destroyed annually. This rapid clearance of trees has resulted in an unprecedented surge in dangerous greenhouse gas emissions, with over 400 million metric tons of carbon being released into the atmosphere every year from the region.
These sobering statistics serve as a stark reminder of the urgent need for concerted efforts to create a forest-positive future in Southeast Asia. Sustainable economic development in and around forests can not only enhance the longevity of local companies but also ensure the long-term viability of multinational brands that rely on supply chains in the region.
To address this challenge, businesses must change the way key commodities like palm oil, soybeans, beef, paper, pulp, and fiber-based packaging are sourced. While this is a complex global issue involving multiple stakeholders, every business that touches upon forests has a crucial role to play.
Through collaborations with consumer products companies, The Consumer Goods Forum’s Forest Positive Coalition has been developing evidence-based approaches to create supply chain strategies that avoid deforestation and the conversion of woodlands.
The first step for companies operating in Southeast Asia is to implement a policy against commodity-driven deforestation and land conversion. To make this possible, businesses should increase the traceability of their supply chains to identify areas where deforestation, land conversion, and human rights risks may occur. It is also crucial that companies synchronize their policies with a timebound action plan aligning production with sustainable economic development, the improvement of local livelihoods, and the mitigation of the climate crisis to achieve “forest-positive” commodity production.
In the Indonesian provinces of Aceh and North Sumatra, key areas for palm oil production and sourcing, an abundance of stakeholders and initiatives has risked fragmenting the push for sustainable production, livelihoods, and conservation. To address this, Consumer Goods Forum members, including Danone, Mondelez International, PepsiCo, and Unilever, are working with the Coalition for Sustainable Livelihoods, a localized platform that brings together district and provincial officials, industry players, farmers, communities, civil society groups, and strategic partners. This platform facilitates peer-to-peer learning, knowledge of product development, and alignment of sustainable development priorities for palm oil landscapes.
On a supply-chain level, companies often require suppliers to tackle deforestation but fail to provide them with the necessary guidelines, training, and measurement tools to achieve this goal. Eradicating deforestation from the entire length of value chains can only be achieved with the support of these suppliers.
The Smallholder Hub program in Aceh Singkil regency, Indonesia, illustrates how companies can support farmers in their supply chains. This program has brought small farmers in the Leuser ecosystem – a critical area of 2.6 million hectares of tropical Sumatran rainforest – into the sustainable palm oil supply chain. Members, including General Mills, have been investing in this program since 2022. To date, it has provided smallholders with training on sustainable farming practices, financial literacy, and deforestation issues, helping independent smallholders turn knowledge of the U.N. Food and Agricultural Organization’s Good Agricultural Practices into action and diversify their income sources, improving their livelihoods and increasing crop yields using existing land, thus reducing pressure on forests.
Apart from small farmers, Indigenous peoples and local communities are also important stakeholders in our rainforests. Companies should support and respect the Indigenous peoples and local communities whose lives and livelihoods are threatened by deforestation and land conversion. To do so, companies should work closely with local organizations and governments to help protect forest communities, their lands, cultures, and ways of life.
In Sabah state, Malaysia, consumer goods brands Colgate Palmolive, Nestlé, and Reckitt are working with the Earthworm Foundation to support the livelihoods and resilience of forest-based communities linked to their supply chains. With a focus on respecting the rights of workers and children, the initiative is helping more smallholders become suppliers to palm oil producers while also protecting local elephant populations by allowing tracking of their movements so that they can be relocated to forest reserves if necessary.
Consumers and investors are increasingly expecting information on companies’ environmental, social, and governance records, and regulations and legislation are increasingly mandating that companies report this data, with Singapore leading the way in Southeast Asia. Only through openness and transparency can business leaders understand the scale of the situation and pinpoint areas requiring urgent action.
The protection and regeneration of Southeast Asia’s forests, and the safeguarding of their unique human inhabitants, ecosystems, and wildlife, can help ensure the region has enough tree cover for adequate carbon dioxide absorption while empowering disadvantaged communities and restoring the ecological balance of the natural world on which we all depend.
To secure a forest-positive future in which people and the planet thrive, companies must urgently upgrade their supply chains and sourcing of raw materials to make them more sustainable, ethical, and reliable. The way to take corporate leadership on this vital issue is to make tangible commitments and then collaborate with peers, governments, stakeholders, and people on the ground to effect positive, transformational change.
