Companies will be asked to reveal the "forest footprint" of everything they make as part of an innovative new project backed by the Prince of Wales.
By Louise Gray, Environment Correspondent The Daily Telegraph
Published: 15 Jun 2009
The manufacture of everyday products is fuelling the destruction of the rainforests because raw materials like beef, palm oil and soy are being taken from illegally logged areas that are never replanted. For example palm oil, found in soaps and foods, is being sourced from areas of Indonesia where local people are displaced and orang-utans are threatened with extinction.
But few companies are obliged to find out where these materials come from or pass the information on to consumers or investors.
The Forest Footprint Disclosure Project (FFD) will ask companies to reveal where any products come from in order to ensure any rainforest materials are sourced sustainably.
The project will enable investors to decide which companies might be "risky" because they source products from unregulated forests where there is greater risk of illegal logging and long term environmental damage. Ultimately though it will become a matter of reputation as consumers become more interested in where their food comes from.
The scheme is being funded by the Department for International Development and a range of charities. It is free for the companies to sign up, although they will have find out all the necessary information at their own expense.
Top investors, with collective assets worth $1.3 trillion, have already put their names to a letter requesting disclosure from companies in the FTSE 100. Big names that are expected to take part include consumer brands like Sainsbury's and Unilever.
The first list of companies signed up to the project will be revealed at the beginning of next year. They will not be ranked but it will be possible to see companies that do not disclose their 'forest footprint'.
The Prince's Rainforest Project, that is campaigning for greater protection of the rainforests, is backing the project.
Gareth Thomas, Minister of State for International Development, said investors can encourage companies to make sure they are not sourcing products from illegal logging areas and therefore drive a more sustainable market.
"My challenge to businesses is to get involved with the project and then implement steps to reduce their forest footprint. I want to see companies taking the lead in the same way as many have done when reducing their carbon footprint," he said.
"Investors have a key role to play as they manage their portfolios and use their influence to help direct business in a positive direction."
Deforestation causes almost a fifth of the world's greenhouse gases – more than the whole of the global transport sector combined.
Andrew Mitchell, chairman of FFD, predicted that companies will be increasingly pressured to measure their forest footprint as other brands sign up and ultimately consumers will look for disclosure to make choices.
"Understanding your 'forest footprint' whether you are a consumer, business or investor is an urgently needed step in managing our planet's land resources in a way that supports our global climate," he added.
Sarah Shoraka, forests campaigner at Greenpeace, welcomed the project.
“As Governments around the world start to get tough on illegal deforestation and climate change, businesses that source commodities from rainforest areas are facing increasing risks. Right now, forward thinking companies are cleaning up their supply chains and addressing potential problems, because they realise that deforestation means bad news for their profits as well as for the planet.”
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