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Technology to Monitor Deforestation in Supply Chains
Technology to Monitor Deforestation in Supply Chains
News Sep 30, 2022

Making No Deforestation Possible

7-minute read

In the last few years, companies have been actively involved in reducing deforestation in their supply chains. According to Chain Reaction Research, these efforts have lead to a reduction in deforestation in the palm oil sector by end-2021. This has been possible thanks to commitment from a wide range of organisations, and the use of different tools and approaches toward this objective.

One of the key tools is satellite monitoring of forest cover, which allows collection of real-time deforestation alerts at scale; and has proved efficient in engaging upstream suppliers and mitigate risks on the ground.

While the palm oil sector has witnessed great progress, the next step is maintaining momentum and scaling up efforts to other commodities.

What has been a voluntary approach so far will soon become a regulatory obligation for many companies importing products and raw materials from risky markets, with new regulations being developed in the EU and other countries like China and the USA. Now, more than ever is the time to ensure that forests remain protected in all parts of the globe.

Listen to Róisín Mortimer from the Tropical Forest Alliance and Glenn Hurowitz from Mighty Earth talking about achievements, the need for scaling up and the implications of the upcoming regulatory environment for companies.

What do new deforestation regulations mean for businesses? Róisín Mortimer of Tropical Forest Alliance explains.

How has satellite monitoring helped reduce deforestation? Glenn Hurowitz, CEO of Mighty Earth explains.

What is Earthworm's Approach to Assessing Deforestation in Supply Chains?

In 2016, Earthworm Foundation and Airbus co-developed the Starling satellite monitoring platform to link the best of space technology with the supply chain expertise necessary to drive social and environmental change.

To date, Starling covers more than 22 countries and 113 provinces. This is equivalent to more than 5.8 million k.m.2, with the system capable of showing 20 years of historical data and trends. In terms of monitoring, Starling has generated more than 2 million alerts since 2016 and utilised more than 180,000 images.

Besides these technical aspects, Starling has been used to assess deforestation risks in an array of commodities, such as palm oil, cocoa, forestry and coffee. More than 15 companies – such as Ferrero, Hershey, Nestlé and PZ Cussons – are using it to assess their supply chain and create interventions where necessary.

Listen to Earthworm staff talk about the work to assess deforestation in supply chains; with the different roles and activities involved.

How to assess deforestation in your supply chains? Earthworm Foundation staff explain.

A key factor to a deforestation-free supply chain is collecting traceability information up to the farm level; and overlaying this with satellite monitoring data.

"When deforestation alerts come in, our teams in Asia, Latin America and Africa work with upstream suppliers to follow up, collect evidence to discard or confirm alerts and when needed, help develop mitigation strategies," said Rob McWilliam, Director of Technical Services at Earthworm Foundation.

In some cases, field verification is necessary to better understand root causes and help companies devise sustainable remediation, McWilliam said.

"An additional step Nestlé is taking to confirm their 'No Deforestation' result is engaging an independent auditor to verify the results," he said.

Achievements to date

Since 2019, Earthworm Foundation has been working with Nestlé, among other companies, on assessing its 'No Deforestation' commitment. As of December 2021, over 91% of Nestlé’s palm oil supply chain was assessed and verified as deforestation-free.

“Since 2016, our Starling services have been supporting Nestlé accelerate and automate the monitoring of their supply chain at scale to help them in their 'No Deforestation' commitment," said François Lombard, Head of Business Intelligence at Airbus Defence and Space. "I am proud of our contribution to Nestlé’s great achievement today. At Airbus, we remain fully committed to doing our part and helping industries and institutions monitor and regulate forest cover change.”

This has been possible thanks to efforts from supply chain actors to map the origin of fresh fruit bunches back to plantations and through engagement with Nestlé suppliers to address deforestation risks through Starling, McWilliam said.

Listen to Mégane Chesné, Sustainable Sourcing Manager at Nestlé, explaining how Nestlé is using satellite monitoring as a facilitating tool for supplier engagement, but also how it can be helpful to go beyond deforestation monitoring and act more proactively to identify opportunities to invest in forest conservation activities.

What is Nestlé's approach to monitoring deforestation in its supply chains? Mégane Chesné, Sustainable Sourcing Manager at Nestlé explains.

Nestlé’s journey has proven that even with complex supply chains including thousands of intermediate actors and smallholders, suppliers can verify deforestation-free commitments.

How to include smallholders in supply chains? Isabel Giraldo, Sustainability Manager at Alianza Team explains.

For example, Alianza Team is a Colombian palm oil supplier to Nestlé that committed to the transformation journey and succeeded in achieving almost 100 percent deforestation-free supply chain in a short time. Their success relies on the definition and implementation of a holistic responsible sourcing programme that is inclusive of smallholders.

The remaining 9% of volumes in Nestlé's palm oil supply chain – not assessed and verified as deforestation-free – is mainly due to insufficient transparency to allow for precise monitoring. Watch Earthworm Foundation’s Rob McWilliam as he covers some of the challenges of monitoring supply chains.

The opacity that remains in parts of the palm oil supply chain is one of the challenges that the industry needs to overcome, together with governments from producing countries. Mapping smallholders is crucial to ensure they are recognised as important actors and are included in companies’ 'No Deforestation' strategies.

What are the challenges of monitoring deforestation? Rob McWilliam, Director - Technical Services, Earthworm Foundation explains.

No Deforestation Verification: Methodology Overview

What are the key definitions and steps Earthworm Foundation takes to collect traceability data, and how is this used to assess and verify No Deforestation in a supply chain?

Earthworm's No Deforestation Verification (NDV): Methodology Overview offers an overview of the methodological approach developed by companies committed to ending deforestation from agricultural supply chains, with valuable input from their suppliers. Our methodology combines traceability data, land cover, and/or land cover change data to assess and verify Deforestation-free supply chains. The document describes traceability aspects, followed by how traceability data is assessed and scored against deforestation data.

No Deforestation Verification: Methodology Overview

This document focuses on the No Deforestation Verification (NDV) methodology for palm oil supply chains.

Last update: v3, April 2024

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