China, the Second-Largest Palm Oil Importer, Lags in NDPE Commitments, Transparency
China is a key market for palm oil (PO), palm kernel oil (PKO) and derivatives from Indonesia and Malaysia. This paper maps the role of the Chinese market and Chinese actors along the palm oil supply chain, from upstream production to midstream trading to downstream consumption, as well as the position of Chinese financial institutions in these different segments.
Chain Reaction Research Applies TCFD-aligned Framework to Assess Deforestation Risks
In 2017, the Task Force for Climate-Related Financial Disclosure (TCFD) released its recommendations for climate-related disclosures in financial filings. The TCFD has since become the de facto global standard for the financial sector to report on climate change risks. This paper presents a framework for assessing deforestation-related risks in agricultural commodity supply chains that is aligned with the TCFD principles. The framework is based on CRR’s seven years of experience in the palm oil, soy, beef, and farmland sectors.
Domestic Banks Finance 74% of Brazilian Beef & Soy
The beef and soy sectors have been two of the major drivers of deforestation in the Brazilian Amazon and Cerrado biomes in recent years. Financial institutions with exposure to these sectors may be inadvertently contributing to climate change and biodiversity loss. As global stakeholders react to these threats, financial institutions may become increasingly more exposed to financial risks. This report, using Forests & Finance data, shows who is financing these two sectors.
South Korean Companies Have Outsized Impact on Palm Oil Leakage Market
This report discusses the role of South Korean companies in the worldwide
palm oil market and the country’s position as an owner of oil palm concessions,
a buyer of palm oil products, and a financier of palm oil operations. The analysis
highlights the country’s role in the palm oil “leakage market," which trades
unsustainable palm oil from growers and producers that are not compliant with
No Deforestation, No Peat, No Exploitation (NDPE) policies.
South Korean Companies Have Outsized Impact on Palm Oil Leakage Market
This report discusses the role of South Korean companies in the worldwide palm oil market and the country’s position as an owner of oil palm concessions, a buyer of palm oil products, and a financier of palm oil operations. The analysis highlights the country’s role in the palm oil “leakage market,” which trades unsustainable palm oil from growers and producers that are not compliant with No Deforestation, No Peat, No Exploitation (NDPE) policies.
Monitoring the Sustainability Status of the Dutch Coffee Sector: Tracking Progress Beyond Certification
Commissioned by the Netherlands Environmental Assessment Agency (PBL), this research assesses options for a more comprehensive monitoring of the Dutch coffee sustainability status. The previous approach of measuring progress based on the market share of certified coffee is perceived as not adequately accounting for the increasingly diversified sustainability strategies chosen by sector actors. The report identifies options for and barriers to a broadened approach to monitoring progress and impacts.
This study, commissioned by Milieudefensie (Friends of the Earth Netherlands), investigates the unsustainable practices linked to Neste's palm oil supply chain. Neste is the world's largest producer biofuel biodiesel and jet biofuel, while stressing its commitment to sustainability. The study finds that companies in its supply chain can be connected to at least 10,000 ha of deforestation, an area the size of Paris, in the period from January 2019 to June 2020, and around 13,000 fire alerts in 2019.
Who is profiting from Brazilian soy? An analysis of the Dutch soy supply chain
This research analyses the role of Brazilian soy in the overall domestic soy use on the Dutch market, and aims to estimate the revenues and profit generated from it by a selection of key industry stakeholders at different levels of the supply chain – from import and crush to animal feed to livestock product processing and eventually retailing.
Brandbeschleuniger Soja: Handlungsoptionen gegen Entwaldung durch Futtermittelimporte nach Deutschland
For Environmental Action Germany (Deutsche Umwelthilfe), Profundo has investigated the German market for soy from South America. The research highlights the heavy dependence of German intensive animal husbandry on soy imports, and their connection to illegal deforestation of tropical rainforests. The import of soy is therefore a dangerous fire accelerant for the destruction of species-rich habitats and forests such as the Cerrado and the Amazon rainforest. The report provides a set of criteria for comprehensive supply chain due diligence, critically reviews the role of TSD chapters in trade agreements and summarizes key recommendations for effective legislation to achieve deforestation-free commodity supply chains.
Women’s Rights Violations in Dutch Palm Oil Supply Chains: The Case Of Guatemala
This report was compiled by ActionAid Netherlands and ActionAid Guatemala. It presents documented human rights violations through palm oil production in Guatemala and the links that exist between these violations and the Netherlands
through the palm oil value chain and the Port of Rotterdam.
Casino Group’s Legal and Financial Risks Accelerate Due to Deforestation in Brazilian Beef Supply Chain
Casino Group is a French multi-banner food retailer, and its subsidiary Grupo Pão de Açúcar (GPA) is Brazil’s second largest retailer. This report analyzes GPA’s deforestation risk exposure based on research carried out by Envol Vert, Réporter Brasil, and Chain Reaction Research (CRR) which shows that GPA purchased beef sourced from farms involved in illegal deforestation.
This report identifies the financial flows towards four high risk sectors - agriculture, fossil fuels, infrastructure, and power generation - in the Fair Finance Asia countries (Cambodia, India, Japan, Philippines, Thailand, and Vietnam). The research shows that between 2014 and 2019, financial institutions from Asia, North America, and Europe provided approximately US$556 billion in loans and underwriting services to some of the largest companies active in these high risk sectors in FFA countries.
Doubling Down on Deforestation: How the Big Three Asset Managers Enable Consumer Goods Companies to Destroy the World’s Forests
This report reveals that the largest U.S. asset managers, BlackRock, State Street and Vanguard – known as the Big Three – have explicitly undermined efforts by consumer brands and agribusiness companies to halt deforestation. The Big Three collectively hold shares worth almost $700 billion in consumer brands with supply chain links to rainforest destruction, and tens of billions more in the agribusiness producers directly responsible for widespread deforestation. All three firms have voted against or abstained from voting on every single shareholder resolution requiring companies to act on deforestation since 2012, and lack clear policies to engage with companies on the issue, which is the second leading cause of climate change.
Forests and Finance is a website that reveals the role that finance plays in enabling tropical deforestation, which has been expanded to cover Brazil and Central & West Africa, as well as Southeast Asia.
The website is a publicly searchable database, functioning as a transparency tool by providing CSOs and journalists a deep insight into financiers that are supporting forest-risk commodity companies. It is a joint initiative of the Forests & Finance Coalition, which includes Rainforest Action Network, Tuk Indonesia, Profundo, Amazon Watch, Repórter Brasil and BankTrack.
JBS: Outsized Deforestation in Supply Chain, COVID-19 Pose Fundamental Business Risks
The Brazilian company JBS SA is the largest meat processor in the world based on sales. The company operates five main business units: JBS Brazil, Seara, JBS USA Beef, JBS USA Pork, and Pilgrim’s Pride. This paper assesses the deforestation exposure and the physical and transition risks from JBS’ operations in Brazil. CRR has located and monitored 983 direct suppliers and 1,874 indirect suppliers to JBS in six Amazon states. In addition, CRR calculates the revenue and EBITDA impact of deforestation, Chinese demand, and COVID-19 in three forward-looking scenarios.
Funding destruction of the Amazon and the Cerrado-savannah
This new case study for Fair Finance Guide Netherlands shows that Dutch banks, insurance companies, and pension funds are financing deforestation in the Amazon and the Brazilian Cerrado-savannah, contributing to human rights violations, climate change, biodiversity loss and large-scale animal suffering.