"Too many UK firms have delivered ever-more-grandiloquent panegyrics to the glories of the rainforest - while doing precious little to actually protect them"
In a world of disruptive innovations, no company wants to be left behind or caught looking the other way. But that's exactly what's happened to leading British companies when it comes to deforestation driven by palm oil and other commodities.
During the last year, many American consumer companies have adopted strong policies to stop unsustainable palm oil expansion that every two years destroys an area of tropical rainforest the size of England. Prominent US companies like Safeway, Kellogg, Johnson & Johnson, Mondelez, General Mills, and many others have committed to buying from only suppliers that are working to rapidly eliminate deforestation from their supply chains. Even fast food chains like Dunkin' Donuts and Krispy Kreme are implementing strong "No Deforestation" policies.
Meanwhile, the big British grocery and personal care companies like Sainsbury, Waitrose, Alliance Boots, and others have mostly just delivered ever-more-grandiloquent panegyrics to the glories of the rainforest - while doing precious little to actually protect them. In other words, when it comes to rainforests, Brits are lagging their doughnut-eating American cousins.
That transatlantic performance gap has arisen even though British consumers are generally significantly more aware of sustainability issues, and far more likely to alter their buying behavior in response than Americans. It's also happened despite a government that is generally far more serious about fighting climate change than America's. The British corporate sector's falling behind despite having societal forces that give them an advantage provides a cautionary tale for the perils business face when they become so besotted by their own rhetoric on sustainability that they forget to ask if they are actually delivering change on the ground.
So what happened? Ironically, British companies like Marks & Spencer and Tesco were among the first companies to recognise that palm oil and other raw materials grown in the tropics were driving massive deforestation. But instead of taking rapid action to rid the products they sold of any connection to deforestation, they instead opted to outsource their values to an industry association to do the job for them.
The vehicle they chose, the Roundtable on Sustainable Palm Oil (RSPO), was originally established as a forum where palm oil producers, consumers, and NGOs could meet to try and resolve sustainability issues. But it suffered from the same weakness that bedevils most multi-stakeholder business sustainability bodies: a lowest common denominator approach to decision making.
The organisation was effectively taken over by its worst actors, and all suggestions of meaningful reform - including some backed by British companies - were summarily rejected by palm oil growers that wanted to maintain their slash-and-burn business model. Indeed, at the beginning of 2013, the RSPO formally rebuffed years of efforts to close the main loophole in the organisation's certification scheme: the fact that palm oil companies could clear forests and ultra carbon rich peatlands (or "deep carbon") and still slap the RSPO's green seal of approval on their products.
You would think that companies that wanted to position themselves as sustainability leaders would rethink their strategy when their main vehicle to show their environmental bona fides was transparently - even proudly - endorsing deforestation. It's hard to imagine a clearer signal that the British customer's sustainability values were not being reflected. But they just dug in. Mostly, they'd just drunk their own Kool-Aid about how belonging to the RSPO was an attempt to get the whole industry to move at once, without serious examination of whether that approach was actually getting results. Meanwhile, deforestation for palm oil continued to expand, and increasingly spread to peatland.
To be sure, many American companies had also tried to use the RSPO for sustainability. But grassroots campaigns (including those supported by Forest Heroes) pushed them to do more. And, to their credit, they have generally responded by taking a close look at what they could do to make a change. Instead of continuing to rely on some external body to ensure their sustainability, American companies are taking responsibility for cleaning up their own supply chains.
That's driving change on the ground. The big agricultural traders that supply US consumer companies with palm oil and other raw materials are in a fierce competition for US market share. And the fact that many of their customers are insisting on deforestation-free palm oil has made a big difference. Big US suppliers Wilmar International, Golden Agri-Resources, Cargill, and Bunge have all announced No Deforestation palm oil policies. These policies cover more than 60 per cent of the world's palm oil. They are helping create a second green revolution that upends one of the fundamental assumptions about the expansion of agriculture. We are realising that the availability of degraded lands for planting and huge opportunities for yield improvement mean that the world can expand its food supply without touching our remaining forest land. When it comes to palm oil at least, UK companies haven't been a significant part of that change.
There is a partial exception to the British lack of leadership on forests. The Anglo-Dutch consumer products giant Unilever has long been a vocal and welcome advocate for action to address deforestation and other environmental ills. Its chief executive Paul Polman has used his energy and company's market power at key moments to advance forest conservation. Unilever has helped rally other companies and governments to pay attention to the issue, and support ambitious policy documents like the recently adopted New York Declaration that commits countries to rapidly ending deforestation and restoring 350 million hectares of forest around the world.
On the other hand, Unilever's own palm oil policy lags American and Asian leaders: though it has good content, the company gives itself until 2020 to comply. Put another way, it's saying that it's going to continue sourcing palm oil from companies clearing forests for up to six more years. With a majority of the world's palm oil traders ready to furnish deforestation free products now, it's time for Unilever do what it does best: compete to be truly the most sustainable company, and win in the race to create shareholder value by showing consumers that the company truly embraces their concerns.
While America has long lagged Britain on environmental action, its emerging competitive approach to sustainability is producing far better outcomes for forests. British companies can regain their leadership if they start approaching the issue with urgency. Of course, purchasing only from responsible deforestation-free palm oil suppliers is a first step. But there's rising deforestation in Latin America for soy, cattle, and sugar - and the big ag traders need to hear from their customers that they expect immediate action in those crops as well. After all, an orangutan or a jaguar doesn't care if its forest home is being cleared for soy, or cattle, or palm oil - the important thing is that it's being cleared.
Protecting forests for the long term requires many things, including government action, and improved monitoring. But it also needs British companies to unleash their capitalist instincts and provide leadership in the race to protect the planet.
Glenn Hurowitz is chair of the Forest Heroes campaign, a global coalition working to break the link between agricultural production and deforestation
@glennhurowitz
