Investors must hold companies accountable
With the backdrop of South Florida, a vulnerable poster child for the real-time, escalating impacts of the climate crisis, many of the world’s leading investment institutions and consumer goods companies are gathering
Feb. 19-23 at the five-star Boca Raton Resort. These business leaders will be joined by a group of concerned climate and human rights advocates imploring them to clean up their destructive practices.
A 50-year-old corporate conference with the innocuous name Consumer Analyst Group of New York (CAGNY) may seem an odd focus for civil society groups concerned about tropical deforestation and Indigenous rights violations, but the reality is that the corporations represented at this elite conference are some of the biggest drivers of forest loss and community conflicts around the world.
This is a global problem, as up to 20% of total global carbon emissions, more than the world’s entire transportation sector combined, are the result of deforestation. With roughly 90% of deforestation driven by agricultural expansion, there simply is no viable solution to the existential threat of climate chaos that does not include stemming the rampant loss and degradation of forests occurring around the world.
Most major brands have made public policy promises to stop sourcing forestrisk commodities from bad actors, including some of the biggest headline presenters at this week’s conference. Alarmingly, many of them, including Mondelēz and Procter & Gamble, have recently received failing grades in the annual Keep Forests Standing Scorecard.
The report uses a comprehensive set of criteria to evaluate ten of the largest brands behind the deforestation and human rights crises.
To put it generously, the results are not pretty.
The activists who are traveling to Florida are bringing a message to big investors that the failure of these brands to fulfill their no-deforestation pledges is not just a moral and environmental issue, but in fact poses financial danger to their investors.
This risk stems from growing consumer outcry and the imminent implementation of new, precedent-setting regulations, including the recently adopted European Union Deforestation Regulation (EUDR).
The EUDR requires all companies that import forest-risk commodities into the EU, which includes cattle, cocoa, soy, palm oil, coffee, rubber or wood products, to trace the commodities used in their products back to the plot of land where they were produced. Companies caught sourcing products from deforested land are liable to be fined up to 4% of their annual revenue. While the regulations are designed to allow corporations until roughly 2025 to achieve full compliance, the data presented in the Scorecard report demonstrates that major global brands are not on track to meet these new requirements, exposing their investors and financiers to real material risk.
Many other recent reports, including Rainforest Action Network’s Carbon Bomb Scandals, show conclusively that deforestation linked to major consumer goods companies is on the rise, even in places like Indonesia’s nationally protected Rawa Singkil Wildlife Reserve in the globally important Leuser Ecosystem.
Using evidence obtained through field investigations, satellite imagery analysis and supply chain research, the Carbon Bombs investigation proves that palm oil produced in this protected nature reserve, in violation of corporate deforestation-free commitments, continues to make its way into the products sold by Procter & Gamble, Mondelēz, Nestlé, Unilever, PepsiCo, Colgate-Palmolive, Ferrero, Nissin Foods and others.
Unfortunately, there is little evidence to indicate that the systemic problems in the implementation of brands’ existing commitments will be resolved anytime soon, certainly not by the deadline established by the EUDR.
This is why climate advocates will gather from around the country to deliver a direct message to investors and brands alike that 2024 must be a year of increased urgency and action to shift business as usual away from the recklessness of the current status quo.