2020 Commodity-Sourcing Goals? These Tools Can Help With Supply Chain Traceability

Amidst rising deforestation rates, many companies have committed to eliminating deforestation from key commodity supply chains. As of June 2018, 473 companies globally committed to curbing deforestation in supply chains linked to palm oil, soy, timber and pulp, and cattle.

Many of these companies have set 2020 goals, and are doubling down efforts to meet these goals as the deadline fast approaches. Companies now find themselves in a position in which they know where they want to go, but do not always know how to get there.

Identifying deforestation risks in supply chains by using monitoring and traceability tools is one key step to achieving corporate goals related to fighting deforestation. Being able to monitor full supply chains, from the production of raw materials to retail or consumption, will enable companies to locate and address deforestation risks.

A new report from EDF aims to provide a comprehensive overview of 25 traceability and monitoring tools currently available to companies seeking to reduce deforestation in their tropical forest commodity supply chains—for cattle, soy and timber—in Brazil. Improving supply chain monitoring and traceability is especially important in Brazil where deforestation is on the rise in vulnerable ecosystems, like the Cerrado, primarily due to the production of key commodities, like cattle and soy.

By understanding what tools are available, companies can decide what monitoring and traceability systems best suit their needs. Once a suitable system is in place, companies can begin taking action to enhance the traceability of their supply chains. If they detect deforestation, they can eliminate it. The report provides an overview of monitoring and traceability systems, including a review of the systems used to monitor deforestation in Brazil. While not commodity-specific, these systems provide the deforestation data integral to commodity-specific supply chain tracking tools. The report describes cattle, soy and timber supply chain monitoring tools, providing information about the objectives, methodology, scale, costs, advantages, and challenges of each tool.

Below are several examples of how companies are using these tools to drive improvements within their supply chains:

• Bunge is using the tool AgroIdeal to increase traceability and supply chain monitoring for soy production. To date, Bunge claims to have “achieved approximately 90 percent traceability to farm for soy sourced directly in high risk regions in Brazil.”
• Companies such as Walmart and McDonald’s are using AgroTools to assess whether the raw materials they acquire in their cattle supply chains are produced from sustainable sources and practices. Walmart, for example, is using AgroTools to verify that beef sourced from Brazil is deforestation-free in order to provide information for Project Gigaton’s beef calculator. McDonald’s is using AgroTools to map the farms they purchase beef from in Brazil using the advanced mapping technology offered by this tool.
• Trase can help companies determine whether they are linked to deforestation through their supply chains. Although Trase data cannot definitively answer whether a company’s supply chain has deforestation, it can help identify commodity flows that risk being linked to deforestation. The latest data on soy in MATOPIBA, for example, provides an overview of the production landscape, commodity traders, and destinations so that companies sourcing soy can better contextualize their supply chains.

Companies have a very important role to play in reducing deforestation in Brazil, and throughout the world. Understanding and monitoring their supply chains is challenging, but necessary if they plan on achieving their goals. The tools presented in this report can help.

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