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RISKY BUSINESS 1

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RISKY BUSINESS 1
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  RISKY BUSINESS1   WORKING TOGETHER TO UNDERSTAND RISKS TO NATURAL CAPITAL DEFORESTATION AND SOCIAL RISKS IN THE UK’S COMMODITY SUPPLY CHAINS   Lead authors: Steve Jennings, Richard Sheane and Catherine McCosker This report sets out research commissioned by WWF and the RSPB, carried out by consultancy 3Keel. It calculates the volume and source of UK imports (from 2011-15) of seven key forest-risk commodities:  beef and leather, cocoa, palm oil, pulp and paper, rubber, soy, and timber. This data is then used to estimate the location and scale of the land footprint created by UK consumption of these commodities, and explores the risks associated with this footprint. The research uses publicly available data and sets out the assumptions made in estimating the footprint and risks. The ndings of this research are summarised and analysed in a separate report, which also includes recommendations on what UK government, companies and citizens can do to address the risks.  Risky Business: Understanding the UK’s overseas  footprint for deforestation-risk commodities  Available at:  wwf.org.uk/riskybusiness  Reports published October 2017.   1 Contents 1Executive summary ........................................................................................... 22Introduction ........................................................................................................ 5 2.1About this document ............................................................................................ 6 3Overview of method .......................................................................................... 7 3.1Quantifying the UK’s imports ............................................................................... 73.2Estimating the provenance of the UK’s imports ................................................. 73.3Estimating the footprint of the UK’s imports of commodities ........................... 83.4Risk index .............................................................................................................. 93.5Data challenges..................................................................................................... 9 4Soy .................................................................................................................... 11 4.1Overview of production, trade and use ............................................................. 114.2Risk analysis ....................................................................................................... 21 5Palm oil ............................................................................................................. 23 5.1Overview of production, trade and use ............................................................. 235.2Risk analysis ....................................................................................................... 33 6Timber ............................................................................................................... 35 6.1Overview of production, trade and use ............................................................. 356.2Risk analysis ....................................................................................................... 44 7Pulp and paper ................................................................................................. 47 7.1Overview of production, trade and use ............................................................. 477.2Risk analysis ....................................................................................................... 55 8Beef and leather ............................................................................................... 56 8.1Overview of production, trade and use ............................................................. 568.2Risk analysis ....................................................................................................... 67 9Natural rubber .................................................................................................. 72 9.1Overview of production, trade and use ............................................................. 729.2Risk analysis ....................................................................................................... 81 10Cocoa ............................................................................................................ 83 10.1Overview of production, trade and use ............................................................. 8310.2Risk analysis ....................................................................................................... 89 11The UK’s forest-risk commodity land footprint ......................................... 9112Deforestation risk index............................................................................... 93 12.1Overview of deforestation risk index ................................................................. 9312.2Country risk rating .............................................................................................. 9512.3Commodity risk profiles ..................................................................................... 96 13Conclusions ................................................................................................ 106   2 1 Executive summary Please note : The research presented in this report underpins policy and businessrecommendations developed by WWF and RSPB (available separately). As such, this is atechnical report that focuses on reporting the data, methods and assumptions used todevelop commodity/country risk analyses.Between 1990 and 2015, the world lost 129 million hectares of forest. Deforestation, in thetropics at least, is largely driven by commercial agriculture and forestry, including suchindustries as soy, palm oil, timber, pulp & paper, beef & leather, rubber, and cocoa. Theproduction of these commodities is an important source of income and employment in manycommunities, but can also be associated with serious social issues and abuses, includingappropriation of land from communities and indigenous groups, and forced and child labour.The UK imports significant quantities of all of the above commodities, and therefore putspeople and forests at risk. This study estimates the quantities of these commodities that areimported, their provenance and the land footprint associated with their production.The research presented here estimates that the total land area that was required to supplythe UK’s demand for soy, palm oil, pulp & paper, timber, beef & leather, rubber and cocoawas, on average, over 13.6 million hectares per year between 2011 and 2015. This isequivalent to a land area over half the size of the UK, and over six times the size of Wales.Imports of beef and leather have the largest land footprints, followed by timber, soy andpalm oil. The UK’s footprint of these commodities is concentrated in a relatively smallnumber of countries across North America, South America, east Asia, southern and westernAfrica, Australia and the EU (Figure 1). Figure 1: Area of land required to supply the UK with forest-risk commodities from producer countries  3Commodity imports are rarely traceable back to individual farms or plantations, and so theexact contribution of the UK – via its imports – to deforestation and social problems isunknown. It remains, however, a very real risk.We estimate this risk by rating major exporting countries according to the rate and extent ofdeforestation, the perceived rule of law and the labour rights conditions within thosecountries. The land footprint of the UK’s imports of the analysed commodities was thenallocated to these risk ratings. Over 44% of the total land area required to satisfy the UK’sdemand for these commodities was from countries rated high and very high risk (Figure 2).Looking at the profile of each specific commodity, at least half of the land footprint of theUK’s imports of beef and leather, soy, palm oil, cocoa and rubber was from countries ratedas high risk or very high risk. Figure 2: The UK's land footprint for seven imported commodities according to risk category of producercountries In brief, the risk rating captures the following characteristics of the commodities. Soy:  High volumes of soy imports come from Argentina, Brazil and Paraguay – countriesthat all have high deforestation and social risk. In the EU, 90% of all soy is used to feedlivestock. 1  There is modest progress on credible, transparent certification with high socialand deforestation safeguards (Round Table on Responsible Soy – RTRS), but thisaccounted for less than 1% of global production in 2015, 2  and little supply chain datatransparency on certified imports. Greater uptake and reporting of RTRS-certified importswould undoubtedly reduce the risk further. Palm oil : This is imported in high volumes from Indonesia, Malaysia, and to a lesser extentPapua New Guinea – countries that possess high deforestation and social risk. Strongprogress on certification (Roundtable on Sustainable Palm Oil – RSPO) partially amelioratesthe risk. The UK statement on sustainable production of palm oil in October 2012 and thereporting of certified imports or major imports of palm oil provided both a stimulus for 1 http://www.bothends.org/uploaded_files/document/Soy_Barometer2014_ENG.pdf 2 http://www.responsiblesoy.org/mercado/volumenes-y-productores-certificados/?lang=en   Very HighRisk23%High Risk21%MediumRisk25%MediumLow Risk14%Low Risk1%Other &Unassigned16%
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