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Addressing indirect sourcing in zero deforestation commodity supply chains
Erasmus K H J Zu Ermgassen1,2, Mairon G Bastos Lima3, Helen Bellfield4
1Georges Lemaître Earth and Climate Research Centre, Earth and Life Institute, UCLouvain, Bâtiment Mercator, Place Louis Pasteur 3, B-1348 Louvain-la-Neuve, Belgium.
Science Advances
|April 29, 2022
Summary
Commodity traders significantly contribute to deforestation. Their opaque, indirect sourcing practices, often over 40%, must be addressed by sustainable initiatives to combat global deforestation effectively.
Area of Science:
- Environmental Science
- Agricultural Economics
- Supply Chain Management
Background:
- Global commodity trade drives significant deforestation, impacting social and environmental well-being.
- Commodity traders are pivotal in mitigating deforestation due to their influence in production regions.
- Current procurement strategies of traders lack transparency, hindering sustainability efforts.
Purpose of the Study:
- To analyze commodity trader sourcing practices in key deforestation-risk sectors.
- To quantify the extent of indirect sourcing in agricultural supply chains.
- To identify how to improve sustainable sourcing initiatives by addressing indirect procurement.
Main Methods:
- Cataloging trader sourcing across four high-deforestation commodities: South American soy, Ivorian cocoa, Indonesian palm oil, and Brazilian live cattle.
- Analyzing the proportion of commodities sourced directly versus indirectly through local intermediaries.
- Evaluating the implications of indirect sourcing for current deforestation-elimination strategies.
Main Results:
- Traders frequently source over 40% of commodities indirectly via local intermediaries.
- Indirect sourcing represents a significant blind spot in existing sustainable sourcing initiatives.
- Sectors examined include South American soy, Ivorian cocoa, Indonesian palm oil, and Brazilian live cattle.
Conclusions:
- Eliminating deforestation requires integrating indirect sourcing into sectoral initiatives.
- Scaling up landscape or jurisdictional approaches is crucial for internalizing indirect sourcing.
- Addressing opaque procurement strategies is essential for effective deforestation mitigation in global trade.
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