There are many sustainability challenges that by their nature cannot be solved by one actor alone. Water shortage, water pollution, climate mitigation and adaptation, and deforestation are examples of supply chain sustainability challenges are often best and most efficiently addressed through collaborative, sometimes public-private, frameworks. Recent progress on reducing deforestation in the Amazon (below) highlights what can be accomplished when different simultaneous strategies work together.
When business challenges require that a company reach beyond their own operations (Scopes 1 and 2) and even beyond their own supply chains (Scope 3), we call that “Scope 4.” Scope 4 extends to the physical and stakeholder landscape within which the supply chain operates. Working at Scope 4 allows companies to address broader challenges like security of supply or reputational risk from social, economic or environmental conditions.
This is unchartered territory for most companies. So the Sustainable Food Lab, IDH The Sustainable Trade Initiative, the World Business Council for Sustainable Development, and The Forests Dialogue have teamed up to facilitate learning and provide tools for these multi-sector collaborations. Collecting best-in-class examples is part of this effort. One particularly hopeful example comes from recent work in the Brazilian Amazon.
Scope 4 Collaboration in the Brazilian Amazon
Over the last few years, stakeholders in Brazil have achieved over 70 percent reduction in deforestation in the Amazon region. The lessons from this example come as much from its success as from its fragility.
Mutually reinforcing public and private initiatives converged to make this possible:
- As a result of public campaigns, in 2006, companies buying soybeans from Brazil adopted a moratorium on soy from deforested land.
- The Brazilian government expanded protected areas and restricted access to credit for farms in counties with the highest deforestation rates.
- A national policy goal to reduce Amazon deforestation by 80 percent was accompanied by a billion dollar pledge from Norway to provide incentives for progress towards this goal.
- The largest beef processing companies responded to requests from their customers, who were pressured by a Greenpeace campaign, to create a Cattle Agreement excluding livestock producers who deforested land after October 2009.
Yet, these advances are fragile. Without continued positive incentives for farmers and local governments for making the shift to sustainability, gains could be reversed!
Demand from global brands, food processors, and government policies all depends upon continued commitment, careful analysis of what works, and new partnerships between companies, local governments and farmers.
Recent events in Mato Grosso and the rest of the Amazon region suggest that a confluence of political will, market forces, and local leadership can create sufficient incentives for agriculture to be sustainable.
Although 80% of the Amazonian forest is still standing, long-term progress depends upon increasing beef and soy production on existing cleared land, which in turn depends upon a combination of supply chain requirements, government regulations, and incentives for sustainable production systems. Ultimately, the agricultural industry and public agencies will need a positive path for development that does not jeopardize the earth’s dependence upon tropical forests.
This hopeful and instructive example points the way toward effective engagement in other landscapes.
Note: This article is drawn from personal conversation with Dan Nepstad, Earth Innovation Institute, as well as a June 2014 article in Science titled, Slowing Amazon Deforestation Through Public Policy And Interventions In Beef And Soy Supply Chains.