With 2.5 billion more people joining the consuming class in the next few decades, we must address the increasing demand for “soft commodities” – the raw materials that go into our food, personal care products, clothes, and even energy. A healthy planet requires sustainable production and consumption.
Today, many soft commodities like palm oil, soy, timber, sugarcane, seafood, paper and cotton are still produced inefficiently and unsustainably. They use considerable amounts of water, alter and destroy important habitats such as rainforests, wetlands and savannahs, and directly contribute to climate change. If we want to meet this growing demand without over-exploiting our natural resources, we must find a more sustainable way to extract and produce such commodities.
Companies alone cannot solve this global problem, but together with governments, communities, NGOs and consumers they do have a vital role to play.
Looking at the business side, WWF analysed the sustainability of the commodity sourcing of 256 companies, all brand manufacturers and retailer members of the Consumer Goods Forum (CGF). Members of this influential global business platform have annual sales exceeding US$ 3.5 trillion. Collectively, they represent a good basis for analysis because of their number, size and diversity.
What we found is alarming. Only a few companies as diverse as as Kimberly-Clark, Waitrose, Unilever, Kao Corporation and Royal Ahold have demonstrated strong leadership by making commitments and taking action to source only commodities certified according to credible standards. These include the Forest Stewardship Council, the Roundtable on Sustainable Palm Oil, the Aquaculture Stewardship Council and the Roundtable for Responsible Soy.
The research further shows that the majority of the companies are not playing the role that is required of them to tip markets to become more sustainable. For example, fewer than half publish sustainability information or report specifically on their soft commodity sourcing policy, and only 9 per cent (22 companies) have made measureable, time-bound commitments to source the soft commodities that are material for their business according to the credible standards recommended by WWF.
This is very disappointing news. I know from experience that there are many challenges that are outside a single company’s control: trade flows are shifting toward markets that are less sensitive to sustainability; governments fail to prioritize sustainable production in policymaking; and there are insufficient studies quantifying the compelling business case for producing and buying certified commodities. Nevertheless, companies are a crucial player because of the important position they hold in the value chain of commodities.
I urge CGF members to lead by example and commit to source by 2020 only credibly certified commodities, to publish action plans detailing how the targets will be achieved and decide collectively to report progress through the annual publication of sustainability reports. I recognize that companies cannot transform markets alone, which is why they need to engage with their supply chains and other industry sectors, and with policymakers to make sustainable practices the new “business as usual.”
Stephen Watson, Head of Corporate Engagement and Asia, WWF Market Transformation Initiative