As part of Business Fights Poverty NYC Online 2020, Business Fights Poverty and Standard Chartered are convening a webinar and online peer discussion to explore how we can account for, invest in and enhance the value of nature present in supply chains. This article delves into nature’s benefits to international supply chains, and examines one initiative that is seeking to align commercial and environmental imperatives: the ‘Soft Commodities Compact’.
As part of Business Fights Poverty NYC Online 2020, Business Fights Poverty and Standard Chartered are convening a webinar and online peer discussion to explore how we can account for, invest in and enhance the value of nature present in supply chains.
This article delves into nature’s benefits to international supply chains, and examines one initiative that is seeking to align commercial and environmental imperatives: the ‘Soft Commodities Compact’.
To discover more, please register for our webinar which takes place on Thursday, 24th September 2020 at 10AM EDT / 3PM BST followed by 45 minutes Peer Discussion ending at 11:30 AM EDT / 4.30 PM BST.
Expert panellists will include: Yale University, WWF, Danone Ecosystem Fund, moderated by Standard Chartered Bank.
The global COVID-19 pandemic has put a spotlight on the urgent need to rebalance mankind’s relationship with the natural world. Conventional economic models have not paid sufficient attention to the role of nature in upholding our lives, livelihoods and economic systems. Instead, human activity has resulted in a climate crisis that is accelerating, the loss of 40% of the world’s forests, an unprecedented decline in biodiversity, and widespread pollution of our land, water and air.
The failure to recognise the value of nature has very real consequences that can no longer be ignored. This year, for the first time, the top five global risks (in terms of likelihood) in the World Economic Forum’s Global Risks Report were all environmental. Extreme weather events, failure to adapt to climate change, human-made environmental disaster, major biodiversity loss and natural disasters represent real risks to lives, livelihoods and businesses the world over. These environmental risks are also inextricably linked to social risks, such as rising poverty, political instability and human migration.
Why is nature of benefit to international supply chains?
The World Wildlife Fund’s recent 2020 Living Planet Report, estimates that every year, nature provides roughly $125 trillion worth of benefits such as food, energy, water and air purification, carbon sequestration, flood protection, disease prevention, and more. We depend on nature for water supplies, fertile soils, pollination of crops, and even disease control; experts have warned that deforestation and loss of biodiversity is linked to an increased risk of future pandemics.
The World Economic Forum’s New Nature Economy report shows that sectors such as construction, agriculture and food and beverages are the most dependent on nature, but many other industries have “hidden dependencies” in their supply chains. For example, the supply chains of the chemicals and materials, aviation, travel and tourism, real estate, mining and metals, supply chain and transport, and retail consumer goods sectors are significantly nature-dependent. The transition to a nature-positive economy would not only build greater resilience in these supply chains and industries, but has the potential to generate up to $10 trillion in annual business value and 395 million new jobs by 2030.
How can we better work together to ensure nature is valued appropriately?
It is high time to find new ways of creating economic prosperity that also protect and restore our natural world. Prior to the global pandemic, the complexities of maintaining supply chains whilst tackling environmental issues such as deforestation, biodiversity and poverty were well appreciated. As international trade flows rebuild, the question is - how can we ensure the value of nature to our supply chains is accounted for, invested in and enhanced?
One response to this question is the ‘Soft Commodities’ Compact: a finance and company-led initiative developed jointly by the Consumer Goods Forum, which brings together over 400 stakeholders in the consumer goods sector across 70 countries, and the Banking Environment Initiative, which is a leadership group of eight global banks - including Standard Chartered - convened by the Cambridge Institute for Sustainability Leadership. The WWF was invited to provide advice due to its experience of developing market-based approaches to achieving sustainability in agricultural supply chains.
The goal of the Compact is to leverage finance to transform the practices of soft commodity supply chains that have significant impacts on deforestation and biodiversity: soy, palm oil, beef and pulp, paper and timber (PP&T). Recognising that cross-sectoral collaboration and alignment is essential to bring about systemic change, the Compact seeks to leverage both supply chains and capital to achieve “net-zero deforestation in the soft commodities supply chains of consumer goods forum members by 2020”.
Due to competition law, the Compact cannot be prescriptive, but instead leads on identifying ways in which the banking industry can help their client base to reduce deforestation in their supply chains. It has adopted a dual approach, providing technical guidance for banks to support sustainable production practices through their finance initiatives, whilst also raising standards for client relationships. The guidance includes three Key Performance Indicators, developed in consultation with banks and other stakeholders.
Although the Compact was not able to meet its ambitious 2020 target, progress is being made. A dozen major global banks have joined the Compact, and their efforts to date have shed light on the complexity of the challenge. Factors such as land rights; rural poverty; a lack of demand globally for sustainable produce; lack of joined up approaches within and between actors; unforeseen adverse effects of top-down/centralised strategies; lack of supply chain transparency; and access to finance have all impacted on the ability of financial initiatives to reduce deforestation. Importantly, the banks who have supported the Compact remain committed to the overall goal, and will continue to work towards net-zero deforestation. Experiences from the Compact are informing new work, including Cambridge’s work on the financial risks of biodiversity loss and land degradation.
How Can I Find Out More?
If you would like to find out more, please join us on Thursday, 24th September 2020 at 10AM EDT / 3PM BST for an online webinar and peer discussion on Nature and Its Value to International Supply Chains, co-hosted by Business Fights Poverty and Standard Chartered.
Through expert insights from across sectors, we aim to tease out cross linkages, deepen knowledge and explore leading edge approaches to nature-related financial disclosure.
This webinar and following discussion will explore this and key questions such as:
Following this, we will host a 30-minute peer discussion, which will provide a space for people from different sectors and regional locations to engage in conversation; forge new collaborations; and explore multi stakeholder solutions.
You can register here to join us at the online event.
This online event on Nature and Its Value to Global Supply Chains is part of Business Fights Poverty NYC Online 2020, a one-week, online conference (21 to 25 September) that builds on our recent online conference Business Fights Poverty Online 2020 (13 to 17 July) to drive forward connection, conversations and collaboration around how we rebuild better - how together we create an equitable and resilient world. The week consists of inspiring and engaging content, live events, peer networking and community-led learning. The week also builds on our Business and COVID-19 Response with Harvard Kennedy School Corporate Responsibility Initiative, and supported by DFID and a number of our corporate partners.
Each day, we will focus on a specific theme: Imagining the Future We Want (Monday); Creating an Equitable World (Tuesday); Helping People Survive and Thrive (Wednesday); Building Resilient Livelihoods (Thursday); Shaping System-Level Partnerships (Friday).