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Challenges Can Help Foster Innovation in Sustainability, Environmental Protection

There have been many high-profile commitments by corporations to end deforestation in their supply chains and to transition to sources that preserve these valuable forest resources. And while most will agree that deforestation remains one of the greatest contributors to global climate change, not all are in agreement on how exactly businesses will make this transition in a way that continues to meet the demands of their customers.

By Ian Lifshitz | Published 9 years ago | About a 6 minute read

While there are a range of social, political, economic and environmental factors that impact the transition to a zero-deforestation pulp and paper supply chain, Asia Pulp and Paper Group (APP) — as well as an array of other stakeholders and companies — are confident that this transition can, and will, be achieved sustainably through, most notably, a pulpwood plantation model (APP has verified its capacity to meet the demand of its mills through plantation fiber), supported by world-class silviculture research facilities and seed operations. Additionally, by working with non-governmental organizations (NGOs) and third-party consultants to assess high conservation value (HCV) and high carbon stock (HCS) areas, the company is able to do so in a sustainable manner.

While no situation is exactly the same, there are countless examples of companies in a variety of sectors that have used challenges to harness technological innovation to achieve environmental and business objectives. As with the pulpwood plantation model, below are a few examples of how companies have embraced adversity and used these challenges as catalysts to advance sound environmental policies while simultaneously fulfilling broader business performance goals.

3M: Developing a data-driven supply chain policy

For many years ForestEthics targeted 3M, maker of Post-It notes, for its environmental practices in the paper industry — specifically for not following through with its initial pledge to sustainability; ForestEthics once hung a 40-foot “to-do list” Post-it note off a bridge near the 3M headquarters, listing "destroy forests" with a checkmark next to it.

To address this public pressure and further its pre-established sustainability commitments, 3M in March announced a new policy to ensure its suppliers and products do not harm ecosystems, protect HCS and HCV areas, and that it will respect the rights of indigenous peoples. To do so, all 5,000 of 3M’s suppliers across the world must supply data that proves they have met the new policy, including tracing the origin of wood fiber. If the policy is not met, 3M will end its relationship with the supplier or suppliers in question.

Mars: Keeping up with cocoa demand sustainably

Mars, one of the world's leading chocolate and candy manufacturers, came face-to-face with a supply issue that questioned its role in producing chocolate sustainably. With cocoa demand growing by two percent annually, and Mars supplier farms unable to fulfill rising growth with their current agricultural tools and products, the company partnered with local and international NGOs to begin utilizing only certified cocoa that would help support farms and increase supply sustainably.

Mars made a pledge to certify 100 percent of its cocoa as “sustainably produced” by 2020, leading the charge in the industry as the first global chocolate company to make this commitment. By utilizing this certification system, Mars can independently verify whether the cocoa production is completed sustainably and that it will benefit both farmers and the environment. By partnering with certification organizations such as Fairtrade, Rainforest Alliance (RA) and UTZ Certified, Mars has created a standard for farmer training and auditing that should ensure its long-term success and a steady supply of sustainable cocoa.

Cargill: Building a traceable palm oil supply chain

The palm oil industry has been a target for its environmental missteps for many years, especially its presence in Indonesia and Malaysia, and increasingly in Africa. Indonesia and Malaysia alone account for approximately 80 percent of the world’s palm oil production, now one of the most widely used vegetable oils in the world.

Cargill, which owns two palm plantations in Indonesia as well as 12 refineries across the world, faced major pressure from environmental activists as the demand for palm oil led to an even larger demand for plantation and farmland. Concerns surrounding forest conservation, peat land conversion, waterway protection and indigenous communities’ rights led Cargill to establish corporate sustainability commitments. Cargill pledged to not plant on areas of HCV forest and not develop new plantations on deep peat land, and implemented a strict no-burn policy for land preparation. The company also joined forces with NGOs and local communities to monitor its environmental impact, encourage sustainable farming practices, and ensure a traceable palm oil supply chain.

APP: Overcoming sustainability issues by adopting a zero-deforestation model

APP faced tremendous pressure from environmental activists, NGOs and customers relative to our pulp and paper operations in parts of Indonesia. Recognizing the need to reform our approach to sourcing materials used to manufacture pulp and paper products, APP — alongside The Forest Trust (TFT) and NGOs — developed our Forest Conservation Policy (FCP). The policy, implemented in February 2013, stipulates a zero-deforestation commitment and a permanent end to high-conservation/high-carbon stock forest clearance by its suppliers across its entire supply chain. APP furthered its commitment by pledging to support the protection and restoration of one million hectares of forest in Indonesia to make an impact on the landscapes both in and around the plantation concessions in APP’s supply chain. APP is working with TFT and a number of other NGOs and stakeholders to oversee policy implementation and monitor progress.

In February, on the FCP’s two-year anniversary, the RA released its independent evaluation report and found APP had made moderate progress toward meeting its commitments. RA determined APP is taking key steps in halting the clearance of natural forest by its suppliers as well as stopping new canal development on peat land.

Implementing and replicating sustainable business models worldwide

As APP continues to work with its partners to implement its plantation model and broader FCP policy, we, along with other environmentally conscious brands, hope to define a new standard business model for zero deforestation in the supply chain. All companies implementing new sustainable business models and policies have learned this important point: Challenge presents opportunities to foster innovation. Importantly, leveraging technological innovation and greater collaboration with NGOs, certification bodies, farmers and others will help companies evaluate their supply chains, look for ways to improve them, and create positive impacts in the future. Given these examples, APP is confident that technology will enable a sustainable pulp and paper manufacturing process that will us fulfill global demand without continuing to clear natural forests.