BLOG: 5 great developments towards deforestation-free supply chains

As the year comes to a close and 2020 is closing in fast, I thought it’d be interesting to reflect on the progress we see towards reaching 2020 zero deforestation targets. Over 700 companies have made commitments. That is great, but to actually comply might not be as simple. If we want to reach these targets, it is important to realise the complexity of it.

Just think about it: a soft commodity like palm oil is being sourced from millions of hectares and thousands of mills around the globe, many of which not registered; countless middlemen, traders and farmers are involved; deforestation happens almost everywhere, and millions of satellite images record it every day. You get it: effective monitoring of all sourcing areas is very complex.

Oil palm — forest boundary (source: Satelligence drone footage)

Oil palm — forest boundary (source: Satelligence drone footage)

Progress is made though: looking back at our work with many supply chain stakeholders during the year 2018, we have seen some great developments that bring efficient implementation and enforcement a step closer:

Great development #1: publication of mill lists.

In February 2018, Unilever became the first consumer goods company to publicly disclose the suppliers and mills they source from. More companies followed. On 15 November 2018, the Roundtable for Sustainable Palm Oil (RSPO) adopted a resolution that requires its members to publish their third-party supplying mill lists.

So far so good, but now: how and where can we actually link the palm plantations supplying these mills to deforestation? Where are these palm plantations even? Many of the independent smallholders are yet to be located and mapped.

In an effort to help put global oil palm on the map, Satelligence started working together with CIRAD and Paris School of Economics to apply Artificial Intelligence and satellite imagery to identify all plantations across Indonesia. Next year the work will continue covering entire West Africa together with Solidaridad.

Great development#2: global coverage of monitoring

Nestlé recently announced it will cover its entire global palm oil supply base with eyes from the sky in 2019, and we see more companies on the way. In a move that Greenpeace called a breakthrough, Wilmar announced it will map its suppliers’ entire landbank including areas from which the company does not yet source, by the end of 2019. It will use high-resolution satellite monitoring to track deforestation.

Thanks to open source and free radar and optical satellite imagery from the Copernicus and Landsat programmes, it is now feasible to cover global supply chains at farm level on a weekly basis.

Utilising this data, Bunge and Satelligence have already successfully implemented the deforestation monitoring approach required during the past 3 years. Over time, we have tackled a key challenge of global monitoring: information overload. Using millions of costly commercial satellite images that can see every single tree fall, is not making the decision making process much easier! And why look at an elephant with a microscope? Moreover, not all that looks green is forest, and not all vegetation clearing is equally relevant.

At Satelligence we implement smart software that generates a clean and simple overview of the highest risk areas daily. This is instrumental for further engagement on the ground: the satellite-derived information works as a conversation starter and fuels the engagement process, whether on the phone with suppliers, on the ground with local stakeholders or in boardrooms. In the end it is all about human interaction.

Great development #3: cooperation between companies at the landscape level

We see an increase in efforts of producer companies and traders joining forces. Where deforestation is detected in overlapping sourcing areas, they follow up on the ground together. Moreover, so-called Jurisdictional Approaches are increasingly intensifying the cooperation of stakeholders at the landscape level, including the follow-up to monitoring.

Great development #4: deforestation monitoring not a single-issue approach

During the past 3 years our deforestation monitoring platform has evolved from a service only targeting deforestation, to one that is simultaneously addressing changes in peatlands, wetlands, grasslands, the impact of fire, infrastructure development etc. This broadened focus helps to better meet challenges at the landscape level, as deforestation should not be addressed in isolation.

Furthermore, large areas of concern are technically not entirely forest anyway. In South America, we have been working with our friends at Wageningen University to tackle the specific challenges of monitoring dry forest, woodland and shrub in the Cerrado, Chaco and Caatinga biome landscapes. The signals of leaf-off periods and drought can easily be confused for deforestation (deshrubisation anyone!?) if not accounted for properly.

Great development #5: increasing focus on financing higher plantation productivity

Finally, deforestation to establish new plantation areas might be reduced if productivity of currently cultivated areas is strongly enhanced. We see increasing interest in replanting aging, less productive, oil palm, cocoa, coffee and other plantations with better planting materials. But where are these plantations and smallholder farmers? What about their performance?

Together with our partner Financial Access, Satelligence has been one of the finalists of the NpM Accenture Innovation Challenge this year. We introduced a geodata-driven, easy-to-use credit scoring and risk platform to reduce risk and operational cost. Making long term replanting loans possible. And importantly, achieve true financial inclusion by identifying farmers not yet bankable, to be trained.

We are proud to see that our approach will be implemented in Indonesia and Ghana coming year.

Next: 2019

Great developments, but does all this mean that the 2020 deforestation targets will be met? To be honest, there is still a considerable gap between the adoption of commitments and their implementation. Still, it is very encouraging to know that affordable, reliable tools and increasingly comprehensive sourcing data are out here now.

Read my next blog early 2019 on tracking further progress!

Niels Wielaard

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