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

The writers are the chief executives of Nestlé and Unilever

Acute crises do not drive out the chronic ones. In fact, an exclusive focus on today’s pressures threatens to make tomorrow’s much worse.

Nestlé and Unilever are currently facing a number of important challenges: food and energy security and soaring raw material prices. In addition, the effects of climate change ripple through our value chains. And the impact will only get worse. That is why we are committed to net zero CO2 emissions.

The business benefits of solving these global challenges are clear: consumers demand more sustainable products, employees want to work for more sustainable companies, and investors recognize the risks and opportunities.

In our own companies, we have turned our commitments into action, but we need to see more of the food, land and agricultural industries. The sector contributes 22 percent of global emissions, and half of that comes from deforestation and land conversion to provide food, fiber and fuel.

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

A new analysis launched today by the UN’s Race to Zero in conjunction with the Science Based Targets initiative finds a fivefold increase in the number of large companies in the forest, land and agriculture sectors committed to net zero.

But behind this encouraging momentum are two concerns. While investors responsible for nearly $9 trillion in assets want to eliminate commodity-based deforestation from their portfolios, a majority of companies critical to tackling tropical deforestation have yet to set a net-zero target.

In addition, only 6 percent of the 148 companies that have made such climate commitments have made strong progress to date in tackling deforestation, based on a Global Canopy assessment of their performance. This lack of progress threatens to derail the net zero liabilities of more than 94 percent of large food and land-use companies.

That’s a problem for all of us. There are four things that need to be done, urgently.

First, all companies with land-based emissions must demonstrate how to make their business models and value chains consistent with a net-zero world. Again, 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 the progress of companies in the food, land use and agriculture sectors.

Second, our industry must go beyond 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 we need to embrace regenerative agriculture to develop ‘nature positive’ supply chains. It also means recognizing the legitimate domestic interests of developing countries, especially those of smallholder farmers, indigenous peoples and local communities. Countries with tropical forests often have to strike a balance between competing environmental and socioeconomic priorities — development, jobs and livelihoods — so we need solutions that deliver all of these goals together.

Third, companies need to fully exploit the potential of technology to track, improve and report on progress. Huge strides have been made in increasing the visibility of what is happening to forests in real time. Much of this can now be supplied at low cost.

Fourth, governments, multilateral institutions and development banks, along with banks, investors and companies, should help accelerate forest financing ahead of the COP27 summit in November. Nature-based solutions, including forests, could deliver more than a third of the emissions reductions needed, but currently receive only $133 billion in available climate finance. We need to reuse $1.8 trillion in environmentally harmful subsidies so that the funding available is commensurate with the scale of the challenge and the opportunities.

Unilever and Nestlé recognize that net zero is a central goal for the global economy. We are working to deforestation-free our key raw material supply chains, which are believed to have the greatest impact on deforestation and the conversion of natural ecosystems, within the next 24 months and to support the communities that protect them.

There is a fiery debate about the merits and methods of sustainable business. But action is what is needed now. Ending deforestation is a necessary precondition for reaching net zero, bringing benefits to consumers, communities and businesses alike.

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