Forest Footprint

The figures are shocking too. According to the Stern Review on the Economics of Climate Change (2006), deforestation accounted for nearly one-fifth of global greenhouse gas emissions, more than all forms of transport combined.

In the face of what can seem like unstoppable, snowballing destruction, a small but ambitious Wytham-based not-for-profit organisation, Forest Footprint Disclosure (FFD), is helping major companies such as J Sainsbury and Kimberley-Clark to take practical steps to reduce their direct and indirect contribution to deforestation.

Established in 2009, FFD already has an impressive track record in getting big business to take the issue seriously and become more open about their activities. Its approach is modelled on that of the Carbon Footprint Project but concentrates specifically on companies’ impact on tropical forests through their involvement with five key ‘forest risk commodities’ — timber, soy, palm oil, cattle products and biofuels.

Well-informed consumers can influence a company’s policies, for example by choosing only timber and paper products that carry the Forest Stewardship Council (FSC) Mark.

But FFD uses a different strategy — raising awareness in the financial institutions on which companies rely for investment of the business risks of ignoring deforestation.

A total of 58 ‘investing endorsers’ with $5.6 trillion in assets under management now lend their name to the project and help FFD to recruit companies to take part in the forest footprint disclosure process.

Of the recent successful City of London launch of FFD’s second annual review, director Tracey Campbell said: “It was particularly pleasing getting such good attendance from fund managers — they are responsible for a lot of the leverage we have.”

Some of the business risks are obvious. For example, when new legislation to protect forests is passed, closing key buying markets to illegal timber — as is happening now in both the United States with The Lacey Act and in the European Union with Due Diligence regulation — companies that have failed to develop responsible sourcing when codes were still voluntary will face sudden stoppages in supply of essential raw materials.

Another risk is the potential damage to a company’s reputation and income that may occur if, for example, they are found to be using palm oil from plantations that pose a direct threat to endangered species such as orangutans.

However, Ms Campbell said: “A name and shame approach is not particularly constructive. We prefer name and fame, showing where companies deserve credit. And it is easier to do a step-wise programme rather than expecting them to become a perfect company overnight. You’ve just got to ratchet it up each year.”

In its annual reviews FFD highlights companies in each of several business categories that have gone furthest in adopting good practice. In the most recent these included British Airways in Travel and Leisure, Marks and Spencer in General Retailers, Reed Elsevier in Media and Drax Group in Utilities.

One indication of FFD’s increasing influence is the fact that in 2009 it invited 217 companies to take part. Only 35 chose to do so, a response rate of 16 per cent.

But in 2010 it approached 285 companies, and 78 took part, a 27 per cent response rate. In general, British companies are doing quite well, Ms Campbell said, but one future challenge for FFD is to engage with more companies in the United States and in Asia, and with more in the oil and gas sector.

FFD was set up as a project of the Global Canopy Programme, an international alliance of 37 scientific institutions in 19 countries that are researching and conserving tropical forests.

FFD is supported by the Department for International Development and overseen by a steering committee that includes representatives from WWF UK, Flora and Fauna International, the Prince’s Rainforests Project, and other organisations with expertise in supply chain management and disclosure methodologies.

Andrew Mitchell, who set up the Global Canopy Programme in 2001 and chairs FFD’s steering committee, said: “Engaging with Forest Footprint Disclosure is one small step through which companies can make sure their supply chain choices are not destroying the natural capital on which their future wealth creation depends.

“It is also a significant leap towards a much wider transformation, one which will identify the sustainable businesses of tomorrow that incorporate the true costs of using natural capital into their future business models – before regulation catches up with them.

“Not doing so will expose companies to greater reputational risk, increasing costs of supply, and contribute to climate change.’’

Name: Forest Footprint Disclosure Established: 2009 Owner: Global Canopy Programme Number of staff: Four

Contact: 01865 240090 Web: www.forestdisclosure.com