Due Negligence Report

The UK’s draft deforestation due diligence regulation, which is part of the Environment Bill currently making its way through Parliament, would make it mandatory for large companies to carry out due diligence to ensure that there is no illegal deforestation in their agricultural and forestry supply chains. However, legal deforestation and conversion of natural land for agriculture could continue. What are the implications of this?

This Due Negligence report, commissioned by the World Wildlife Fund and prepared by 3Keel and Environment Systems, presents an analysis of the potential consequences of the UK’s proposed due diligence obligation. Legality would be defined by producer country regulations. Clearly the issue of deforestation has huge implications for existing carbon stores and biodiversity.

Cerrado Brazil
Cerrado, Brazil – a mixed landscape, the result of deforestation and agriculture
The report features two case studies – soy from Brazil and palm oil from Indonesia. Its overarching finding is that a due diligence law based on whether deforestation is illegal according to producer country laws will not de-link the UK supply chains from deforestation, and it will be difficult for companies to comply with and for the government to enforce it.

The report had a number of key findings:

  1. A regulation based on excluding illegal deforestation may only have limited impact on the overall conversion of natural land associated with UK supply chains.
  2. A regulation based on illegal deforestation will be harder to implement and enforce than one based on all (legal and illegal) deforestation and conversion, due to the complexity of legal structures in producing countries, the variation in what is defined as legal between countries, and the lack of comprehensive, publicly available data on legality.
  3. Focusing on forests alone, rather than all ecosystems, puts those other ecosystems and the people and species that live in, and depend on them, at risk.
  4. Getting the right model of due diligence and effective penalties for non- compliance matters.

A question this poses, for example, is how much deforestation is likely to happen in the UK’s Brazilian soy supply chain by 2030? Depending on the rate of deforestation and conversion in Brazil under the different scenarios, conversion of 36-59,000 hectares of natural vegetation would be directly attributable to UK supply chains between 2021 and 2030. This vegetation stores 18- 30 million tonnes of carbon, equivalent to between 4-7% of the UK’s current annual domestic Greenhouse Gas emissions. The impact on biodiversity is dramatic. Out of 2,462 species of plants and animals present in the biome, a quarter of them are on the IUCN (International Union for Conservation of Nature) Red List of Threatened Species, a critical indicator of the health of the world’s biodiversity. The implications for the ecosystems and the future wellbeing of the species that thrive within them are stark.

With this detailed analysis available, policy makers have the evidence to draw up regulations that will work effectively. The WWF Due Negligence Report is a significant call to action with recommendations for the UK Government to strengthen its legislation. If this is acted upon, supply chain companies will have an effective and auditable system with which they can work. As COP26 President, the UK would also be in a stronger position to encourage others to do likewise. Failure to act would be more than just a missed opportunity.

You can read and download the report here.