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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.

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