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Report exposes illegal deforestation in Brazilian soy supply chains

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Report exposes illegal deforestation in Brazilian soy supply chains

In Brazil, SEI and partners harnessed the work of the Trase initiative to help governments, companies and investors understand the previously unknown links between soy farming and illegal deforestation.

Published on 23 December 2022 / Brazil

This change story is from our 2020 annual report.

In Brazil, SEI and partners harnessed the work of the Trase initiative to help governments, companies and investors understand the previously unknown links between soy farming and illegal deforestation. This work is helping to improve the sustainability of the soy supply chain in Brazil and Europe.

Over one third of all tropical deforestation in the world in 2019 took place in Brazil, a rate equivalent to the total deforestation of the other top five countries combined.

Almost none of the deforestation in Brazil was authorized by the official environmental agencies and was therefore likely to be illegal. Aside from the impact on climate change and biodiversity loss, illegal deforestation can have social impacts through increased land conflict and violence, as well as economic impacts through fines imposed on companies found to be linked to illegal activities.

The need to eradicate illegal deforestation and improve compliance with Brazil’s Forest Code is recognized by the entire agribusiness industry, government and consumer markets of commodities produced in Brazil. However, it has been unclear to what extent soy, Brazil’s most profitable export commodity, was linked to illegal deforestation. This means that companies in the soy supply chain were operating in the dark.

Illegal deforestation in hectares in Nova Ubiratã and Paranatinga, Mato Grosso State, Brazil

Illegal deforestation in hectares in Nova Ubiratã and Paranatinga, Mato Grosso State, Brazil. Source: Trase.

Scale of illegal deforestation in soy supply chains revealed

To address this knowledge gap, the Trase initiative, jointly led by SEI and Global Canopy in partnership with the Brazilian organizations Imaflora and ICV, estimated the amount of illegal deforestation taking place on soy farms and examined how global markets are exposed to deforestation risks as a result.

The study found that 30% of all deforestation between 2012 and 2017 in Mato Grosso, the largest soy producing state in Brazil, took place on soy farms and that 95% of this deforestation was illegal. The researchers estimated that in 2018, more than 80% of the soy grown on farms in Mato Grosso where illegal deforestation took place was exported. Approximately 20% of the EU’s total imports from the state and 21% of China’s imports were likely to have come from farms where illegal deforestation had taken place.

The full report of the research was published in June 2020 alongside several media pieces featuring the main findings, including two articles in The Economist.

“Shocking report. The EU is the second biggest export market for Brazilian soy from farms with illegal deforestation. We need deforestation-free supply chains.”
– Anna Cavazzini, Member of the European Parliament, reacts to the report on Twitter

Catalyzing action

The report and ongoing engagement around the findings have catalyzed action on illegal deforestation in Brazil´s soy supply chain among leading private and public sector actors in both Brazil and Europe.

In Europe the study played a key role in drawing attention to the issue and helped companies demand tougher legislation on due diligence, while also supporting efforts to implement the EU Action Plan to Protect and Restore the World’s Forests.

The study’s findings were presented to key business forums, including to the European Feed Manufacturers’ Federation (FEFAC) and the group of companies that signed a Statement of Support for the Cerrado Manifesto. In October 2020, the study was cited in an open letter to the UK Government signed by global food companies, including McDonald’s, Unilever and Tesco, calling for greater ambition on their due diligence consultation process in addressing global deforestation.

The report’s authors and partner institutions in Brazil engaged with the country’s two main soy trader associations (ABIOVE and ANEC) to bring the findings to their attention, motivating the Brazilian soy industry to step-up its efforts to address the issue. At the same time, the findings have strengthened the Brazilian Federal Public Prosecutors (MPF) efforts to combat illegal deforestation connected to soy in Mato Grosso.

Strategy in action

Priority for change

Commodity sourcing strategies and standards that address deforestation and biodiversity

By estimating the amount of illegal deforestation taking place on soy farms and revealing how global markets are exposed to deforestation risks as a result, the Trase initiative is helping companies and governments and farmers build more productive, resilient and sustainable practices in the agricultural sector.

Types of outcome

Improving decisions (1), Changing agendas (2)

Before the study there was no information on the extent to which soy exports from Brazil to Europe and China were linked to illegal deforestation. The analyses conducted by SEI and partners empowered global companies and consumer market governments to better understand their risks of being exposed to soy contaminated with illegal deforestation.

Delivering on our priorities

Related

Leading a green recovery

This is an impact story – a highlight of our work from 2020. This story and a selection of others can be found in our annual report.

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