AFi Coalition urges companies to disclose deforestation- and conversion-free commodity volumes

They have until July 26 to disclose that data. Credible disclosure is essential to understand company progress towards ethical supply chains, stresses the AFi Coalition.

That alliance is calling on all companies that produce or source agricultural or forestry commodities to disclose the DCF status of 100% of the commodity volumes produced or sourced using standardised and credible indicators.

Companies should disclose regardless of their position in the supply chain or their level of progress towards DCF supply chains, stressed the coalition.

There is a high market demand​​ for environmental disclosure that is growing constantly, according to the CDP.

“Some 746 investors with over US$136 trillion in assets and 340+ large purchasers with over US$6.4 trillion in procurement spend are requesting thousands of companies to disclose their environmental data through CDP.”

This year the CDP forests questionnaire ​​includes queries linked to the metrics of traceability, land use change footprint, as well as the proportion of supply chains that are DCF.

“Disclosure is the first step to driving change. The whole process is driven by what we call authorities, predominantly investors but also big buyer companies. They work with CDP to put out requests every year. They ask companies that are part of their portfolios or companies that they buy from to disclose through CDP. The results then go back to those authorities and can inform their decision-making." 

- Thomas Maddox, global director, forests, CDP, May 2022.

Last year, CDP asked companies to disclose DCF information in an exploratory question. Of the 810 companies that disclosed via CDP forests on at least one commodity, nearly half (383) reported that at least some of their volumes were DCF. An additional 20% of the responding companies (165) said they plan on achieving some DCF volumes within two years, according to CDP.

Among processors, traders, manufacturers, and retailers, 12% said they monitor the deforestation and conversion footprint of their full supply chain for at least one commodity and can report that more than 90% of the volume is verified to be DCF, according to the 2023 Global Forest Report​​. "These preliminary responses indicate that, for many companies, assessment and disclosure of deforestation- and conversion-free performance is already a reality."

Why disclose? 

Well, the AFi Coalition says disclosing DCF performance this year will enable stakeholders to understand and recognise progress as companies advance towards a range of climate and nature goals.

Transparency in relation to the new indicators, it continues, enables companies to: 

• Communicate performance and progress to their buyers, investors, and stakeholders in a clear and credible way
• Fulfil transparency requirements of related targets and affiliations, such as the Science Based Targets initiative’s Forest Land and Agriculture targets and the Consumer Goods Forum (CGF) Forest Positive Coalition 
• Improve their ratings and gain positive recognition for transparency
• Demonstrate leadership to support and enable sector-wide change
• Prepare for forthcoming regulatory and mandatory disclosure requirements

"The AFi Coalition, CDP, Forest 500, and other assessment initiatives will assess and recognise companies’ level of transparency on DCF volumes, apart from their current level of DCF performance. Disclosure of limited progress is preferable to no disclosure at all, and in 2023 CDP’s scoring will focus on completeness of the response. From 2024, performance related to DCF volumes will contribute significantly to a company’s overall CDP score."