The Entire Global Economy Is Complicit In The Destruction Of The Amazon
Hundreds of global corporations have promised to help limit deforestation. None of them is meeting that goal.
Name any fast-food restaurant, personal care product or home good you have bought recently, and chances are it contributed to the deforestation of the Amazon. Now name a big bank ― any big bank, really. More than likely it has helped finance that destruction.
Furniture companies like IKEA and La-Z-Boy, and footwear giants like Nike, Adidas and New Balance, are customers of Chinese manufacturers that source leather from Brazilian cattle ranches. Palm oil, produced in Brazil and elsewhere, is used in everything from pizza dough and ice cream to lipstick and shampoo. Soy, paper and wood products that come directly from the Amazon are omnipresent.
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It’s not hard to pinpoint our unquenchable thirst for cattle, soy, timber, palm oil and other commodities as the main driver of Amazonian deforestation and the underlying cause of the record number of fires this year.
What’s more difficult is figuring out what to do about it. The sheer scale of the global economy and the complexity of the supply chains and financial systems that make it work mean that nearly every company, corporation and banking and investment institution on the planet is complicit in the destruction of the Amazon and other forest ecosystems around the world.
Although hundreds of companies have made high-profile public commitments to combating deforestation, none is doing enough to actually limit ― much less end ― the practice.
“It’s very challenging to live your day without touching deforestation,” said Stephen Donofrio, a senior adviser at Forest Trends, a nonprofit that tracks corporate deforestation.
The world loses 30 football fields of trees to deforestation every minute, but few places highlight the problem quite like the Amazon, a rainforest that has been the subject of extensive global attention and protectionist efforts from past Brazilian leaders and conservation groups for decades.
Far-right President Jair Bolsonaro has reversed many gains made under past administrations. Since taking office in January, he has gutted Brazil’s environmental agencies and moved to strip protections from the Amazon and indigenous land there. But he has not acted alone: A vast network of U.S. and European corporations, backed by large financial institutions and supplied by smaller Brazilian companies, farmers and ranchers, are also playing a part, as the environmental nonprofit Amazon Watch highlighted in an April report.
The Amazon Watch report named the world’s largest soy trading companies ― Archer-Daniels-Midland, Bunge, Cargill and Louis Dreyfus, known collectively as the ABCDs ― along with smaller, lesser-known corporations linked to timber, beef and palm oil production that had helped spur deforestation.
In 2014, Cargill was among the hundreds of global companies that pledged to limit its effect on global forests, including the Amazon, by refusing to purchase commodities from suppliers that deforested the land to produce them. This year, it has touted its efforts to build “deforestation-free supply chains” by 2030 and said it would no longer rely on suppliers that violated that aim.
But in June, Cargill told Brazilian farmers that it opposed a moratorium on soy production in the Cerrado, a savannah region of Brazil, a priority for environmental groups that had already helped establish a similar moratorium in the Amazon more than a decade ago. Cargill’s justification was that other companies and suppliers would continue producing soy and destroying forests even if it stopped; indeed, other soy giants had also resisted the moratorium.
Instead, the company committed to spending $30 million to fund new ideas to meet its goal of limiting deforestation, but environmental groups have criticized the company for its inability to choose between its destructive suppliers and its sustainability goals, which Cargill has admitted it is still not on track to meet.
Cargill declined to comment and referred HuffPost to the Brazilian Association of Vegetable Oil Industries, or ABIOVE, which represents its industry in Brazil.
ABIOVE responded late Wednesday that “it is a mistake to affirm that soy crop is a driver of deforestation,” noting that soybean production is occurring in “only 1.14%” of the entire Amazon biome. The statement also said, in part:
“Brazilian environmental legislation is one of the strictest and most complete on the world. The challenge is to prove that this legislation is, in fact, complied and monitored. So, ABIOVE will continue committed not to trade soy produced on properties with deforested areas, or those embargoed by environmental monitoring entities.”
Together, soy and cattle production accounts for almost 80% of Amazon deforestation, and the April report pointed, too, to Brazilian meat giants, such as JBS, a company that also operates in the U.S. and Europe and, together with two other Brazilian corporations, is responsible for roughly 70% of Brazil’s beef exports to the United States and Europe.
JBS faced millions of dollars in fines for buying cattle raised on protected lands in 2017, and earlier this year, it was among the Brazilian meat companies linked to similar practices in a joint investigation published by The Guardian, Repórter Brasil and the Bureau of Investigative Journalism.
The financial institutions that provide financing to those companies are also responsible.
BlackRock, the world’s largest asset manager, is a “key financier of the agribusiness giants most implicated in deforestation in the Brazilian Amazon,” the report said, noting that it holds more than $2.5 billion worth of shares in Brazil’s largest agribusiness companies.
BlackRock CEO Laurence Fink, the report noted, has earned the reputation as “the conscience of Wall Street” for his public positioning of the company as one committed to sustainability. At the same time, it remains “the common denominator in the financing of some of the most destructive industries on the planet,” said Christian Porier, a program director at Amazon Watch and the lead author of the April report. (Amazon Watch launched a campaign against BlackRock this year, seeking to “hold it accountable.”)
BlackRock, according to the report, has provided financing to both Cargill and Bunge, both of which faced fines from the Brazilian government last year for purchasing grain linked to illegal deforestation. Both companies disputed the fines and said they had complied with the law.
In a lengthy email statement that never mentioned the Amazon, BlackRock spokesman Farrell Denby said the the majority of the company’s holdings are held through index and exchange-traded funds that are selected by its investor clients and that its “obligation as an asset manager and a fiduciary is to manage our clients’ assets consistent with their investment priorities.” He said BlackRock encourages clients “to adopt the robust business practices consistent with sustainable long-term performance” and, when it has concerns, stands “ready to vote against proposals from management or the board.” Denby did not respond to a question about whether BlackRock is taking any steps in light on the record number of fires in the rainforest.
Banks including Santander, JPMorgan Chase and Barclay’s have also provided financing to JBS, according to the report. Other large financial institutions, including HSBC, Morgan Stanley, Bank of America and Credit Suisse, have underwritten Marfrig and Minerva, two other large beef companies based in Brazil, over the last five years, the report said.
Many of the world’s largest banks, especially those based in Europe and the United States, have in recent years announced plans to reduce their financing of companies linked to deforestation. In 2017, for instance, HSBC implemented a “no deforestation” policy in response to a Greenpeace report that linked the bank to more than $16 billion in investments into firms accused of illegally deforesting land. Barclay’s and Credit Suisse were among a group of financial institutions that in 2014 committed to reaching zero net deforestation, meaning they’d help mitigate the loss by replanting elsewhere.
Marfrig, meanwhile, has touted its compliance with Amazon conservation standards but has been linked to ranchers and beef suppliers who have recently faced fines for illegal deforestation from Brazil’s environmental ministry.
But that highlights a larger issue with corporate efforts to limit their destructive practices: Though they claim to meet sustainability standards, they often only account for the practices of their immediate partners and don’t take responsibility for what happens further down the supply chain.
Many companies “can demonstrate [compliance] in terms of their primary suppliers, but...their supply chain due diligence ends there,” Porier said.
That isn’t always a result of nefarious practices. Companies often simply don’t have the information they need to get on board with efforts to better protect ecosystems like the Amazon, said Michael Coe, an earth system scientist and director of the Amazon program at Woods Hole Research Center in Massachusetts.
“We have to think about all the different players and ask what levers are there that we can try to apply to reduce the demand to deforest,” he said.
Intact ecosystems are becoming increasingly key. The United Nations warned in a report this month that unsustainable land use has helped drive atmospheric carbon dioxide concentrations to their highest levels in human history and devastated natural buffers against planetary warming. And even before the U.N.’s warnings turned increasingly urgent, the global environmental crisis had led to an increased focus on sustainable products from consumers and corporations alike.
Whether the cause is a lack of information or a drive for profits, there remains a significant gap between what companies say they are doing to combat deforestation and what they’re actually accomplishing when it comes to limiting it.
In 2014, hundreds of companies pledged to eliminate deforestation from their supply chains and financial portfolios by 2020. But less than six months before that deadline arrives, not a single one of them is on track to meet the goal, according to Global Canopy, a British nonprofit that tracks more than 500 companies and financial institutions that put forests at risk through their reliance on or financing of commodity-rich supply chains.
The Carbon Disclosure Project, another British nonprofit, has attempted to persuade corporations to be more transparent about their environmentally destructive practices in an effort to improve them.
But more than 70% of the 1,500 companies it asked to disclose information on timber, palm oil, cattle and soy production in 2018 didn’t share data, and more than 350 of them ― including companies like Dominos Pizza and Mondelez, the Illinois-based food company whose top brands include Oreo, Nabisco and Kraft Foods ― haven’t disclosed information in any of the last three years.
Nearly 25% of the companies that did share data said they have taken no action at all to limit their effect on deforestation or have moved to address it on only one of the four commodity groups. The survey also showed that a third of the responding companies had yet to start working with suppliers to limit deforestation.
More than half of the 865 companies whose practices risk contributing to deforestation have committed to relying on sustainable commodities, Forest Trends said in a June report.
But it found than less than 10% of them have committed to net-zero deforestation, and fewer than a third of those have reported making substantive progress toward the goal.
“Despite the commitments that have been made,” Global Canopy said in its annual “Forest 500” report, “evidence shows that rates of commodity-driven deforestation have not decreased.”
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