After 3 years of hard work, drafts, interviews and consultations with companies, governments, NGOs and others, the launch of the OECD-FAO Business Manual on Deforestation and Due Diligence in Agricultural Supply Chains was announced. The ad was posted by Tomislav Ivančić, Global Consultant, responsible for UN/FAO Agricultural Supply Chains (Food and Agriculture Organization of the United Nations).
The document is the first and most comprehensive business guide to help companies navigate global expectations around deforestation in global trade and supply.. The handbook aims to help companies incorporate deforestation and forest degradation considerations into their supply chain and responsible sourcing efforts., and take a holistic approach to deforestation risk and positive forest outcomes.
You can get an idea of the main subjects addressed by the document from the following topics.
forests and deforestation
Healthy forests play a crucial role in sustainable development, covering economic growth, social progress and environmental sustainability. Nonetheless, current high rates of deforestation pose a significant threat to their existence. Almost 90% of global deforestation between 2000 e 2018 was driven by agricultural expansion, including agricultural land and livestock production.
The expansion of global trade and business has led to the growth of global supply chains, with approximately one-third of agri-food exports being traded within these chains. Although deforestation occurs in specific locations upstream in the supply chain, downstream companies and suppliers have a vital responsibility to address the risk of deforestation in the commodity supply chains they depend on.
Due diligence in agricultural supply chains
“Due diligence” refers to the process by which companies identify, prevent, mitigate and account for how they deal with the actual and potential adverse impacts of their own operations, its supply chains and other business relationships.
Businesses can collaborate to reduce environmental impacts, including deforestation, and promote labor standards and human rights. The OECD Guide provides a five-step risk-based due diligence framework to help companies identify, prevent and address deforestation risks in its operations, supply chains and business relationships, detailed in the Manual.
Five-Step Framework for Risk-Based Due Diligence
- Establish strong deforestation policy and management systems;
- Identify, assess and prioritize deforestation risks in the supply chain;
- Design and implement a strategy to respond to deforestation;
- Check supply chain Deforestation due diligence;
- Report on due diligence to combat deforestation.
Understanding a company's link to deforestation
Companies may have varying links to deforestation or forest degradation through their business operations. Depending on your connection to these impacts, they are expected to respond accordingly. This response may involve direct actions to address the impact, discontinue the activities causing the impact or use leverage to influence the entities responsible for the impact. Remediation efforts may include restoring affected areas and communities to their pre-deforestation state and, when this is not possible, companies should consider compensation and cooperation with affected communities to address deforestation or forest degradation.
1.Establish strong deforestation policy and management systems
Na Etapa 1, the handbook requires the company to establish sound management systems and policies to address deforestation risks and support responsible agricultural supply chains. This will be an iterative process: the policy and its implementation will need regular review in light of changing circumstances.
2. Identify, assess and prioritize deforestation risks in the supply chain.
Na Etapa 2, the company examines its supply chains for the risk of deforestation. This includes supply chain mapping., an analysis of the associated deforestation risks and the establishment of the degree of company involvement, and its influence on these risks.
3.Design and implement a strategy to respond to deforestation
Na Etapa 3, the company prepares and adopts a risk management plan in response to the deforestation risks identified in Step 2 and implements measures to reduce deforestation and the risk of deforestation.
4.Check supply chain Deforestation due diligence.
Na Etapa 4, the company ensures that its due diligence actions are working effectively.
5.Report on due diligence to combat deforestation.
Na etapa 5, the company reports on its efforts to implement its due diligence policies and the impacts they are having in relation to the fulfillment of its commitments.
Tips for small and medium-sized businesses (SMEs)
The Handbook provides recommendations for SMEs to customize risk-based due diligence to address deforestation. This includes adapting company policies to industry initiatives or other SMEs, engage in multisectoral platforms for sustainable commodities, collaborate with certification schemes or industry associations for risk assessments, use existing platforms to identify deforestation and collaborate with other SMEs to prioritize deforestation risks.
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