How do companies implement their zero-deforestation commitments

Abstract

More than 500 companies engaged in supply chains of forest-risk commodity have adopted zero-deforestation commitments (ZDCs). We use corporate social responsibility strategy and policy implementation theories to analyse the processes and conditions for ZDC implementation. We base our study on 35 semi-structured interviews with company representatives and sector actors, publicly available ZDC data, and company reports. The objective is to understand the opportunities and challenges of ZDC implementation at the level of companies. While past research addressed ZDC coverage and effectiveness, knowledge is still lacking on companies' perspectives on the implementation of their commitments. This study provides a unique perspective by integrating the direct experience and knowledge of private actors on an environmental governance regime. We find that companies see implementation of ZDCs as a journey and often rely on voluntary sustainability standards, aligning their strategies and key performance indicators (KPIs) to these. They engage directly in the supply chain, conducting projects “on-the-ground.” Implementing ZDCs requires the involvement of procurement departments and upper management, and collaborations within and between companies. Companies rely on service providers for in-depth knowledge and field implementation. They use monitoring tools, e.g. remote sensing, and see supply chain traceability as a prerequisite for implementation. Companies face numerous implementation challenges. Internally, companies often lack leadership on their ZDC, struggle to align commitments with the organization's operations and to manage suppliers, especially smallholders, and allocate insufficient resources. Externally, they lack common standards and stakeholder support, and face challenging regulatory conditions and missing market incentives. An uneven playing field creates leakage markets. Companies identify better leadership, technology and pre-competitive collaboration as potential solutions. Zero-deforestation commitments are unlikely to greatly contribute to reducing deforestation until better implementation processes, mechanisms, and conditions are in place.

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