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Abstract
The majority of a company’s environmental impacts exist outside its
operational footprint—in its supply chain and typically in the
production and harvesting of raw materials for food for human and
animal consumption, fuel and materials. The impacts of commodities
like palm oil, soy, timber, and pulp and paper on iconic places like the
forests of the Amazon and Borneo are well known; a similar magnitude of impact is
being felt globally with approximately 50% of the loss of biodiversity being due to
primary production.
These impacts also pose some of the most significant threats to a company’s security
of supply of key inputs, brand reputation and bottom line. These risks are increasingly
leading some companies, particularly multinational food, beverage and grocery
companies and brands, to implement wide-ranging strategies for sourcing raw
materials more sustainably. WWF’s analysis shows that around 500 companies control
or influence roughly 70 per cent of global markets for commodities.
Initial steps toward improved sourcing include using tools to better understand
environmental and social risks in their supply chains and prioritising focus areas for risk
mitigation. With this information companies are developing transition programs for
key commodities, including publishing time-bound targets for the purchase of credibly
certified commodities, engaging primary producers, and partnering with NGOs to
improve their understanding of social and environmental issues. Others are going
further by supporting collaborative action to shift their sectors and influence
government, for example, through multi-stakeholder initiatives and roundtables or
joint advocacy with NGOs and other private sector actors.