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Industries and sectors driving deforestation: what you need to know

We recently did a deep-dive into the industries and sectors driving deforestation. We were curious: do all sectors contribute to deforestation? And which industries have the biggest impact? 
We learned that<a href="https://forest500.org/"> every six seconds</a>, an area of forest the size of a football pitch is destroyed to make way for the production of commodities such as soy, beef, timber and palm oil. Here’s the full scoop.

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Forests cover <a href="http://www.fao.org/3/ca8753en/CA8753EN.pdf">31% </a>of the land on our planet and they are critically important for stabilising our climate. They regulate ecosystems, protect biodiversity, support livelihoods, and play an important role in taking carbon dioxide out of our atmosphere. Approximately <a href="https://www.iucn.org/resources/issues-briefs/forests-and-climate-change#:~:text=Approximately%202.6%20billion%20tonnes%20of,America%20%E2%80%93%20offer%20opportunities%20for%20restoration.">2.6 billion tonnes of CO2</a>, one third of the CO­2 released from burning fossil fuels, is absorbed by forests every year, and the <a href="https://www.ipcc.ch/srccl/">2019 IPCC special report of Climate Change and Land</a> stated that planting forests and protecting existing forests is a key component of all pathways seeking to  limit average global temperature increase to 1.5°C. 
Forests are also home to <a href="https://www.iucn.org/resources/issues-briefs/forests-and-climate-change#:~:text=Approximately%202.6%20billion%20tonnes%20of,America%20%E2%80%93%20offer%20opportunities%20for%20restoration.">80% </a>of the world’s terrestrial biodiversity, and provide critical ecosystem services that are important to both people and the planet, such as healthy soils, clean water sources, erosion control, crop pollination, and flood control.
Globally about <a href="https://www.un.org/esa/forests/wp-content/uploads/2018/04/UNFF13_BkgdStudy_ForestsSCP.pdf">1.6 billion people</a> (nearly 25% of the world’s population) rely on forests for their livelihoods, many of whom are among the world’s poorest. Over<a href="https://www.un.org/esa/forests/wp-content/uploads/2018/04/UNFF13_BkgdStudy_ForestsSCP.pdf"> 200 million people</a>, including many indigenous people, directly depend on forests for their survival. Forests produce more than 5,000 types of wood-based products and generate an annual gross value add of just over<a href="https://www.worldbank.org/en/topic/forests"> $600 billion</a>.

As we’ve seen, forests are critically important and must be protected. However, they are being cleared and degraded at a rapid rate, causing carbon loss as well as negative impacts on ecosystem services. Deforestation is the second largest source of anthropogenic emissions on the planet, <a href="https://www.theguardian.com/environment/2022/feb/28/deforestation-emissions-far-higher-than-previously-thought-study-finds-aoe">second only to the burning of fossil fuels</a>, causing <a href="https://www.worldwildlife.org/threats/deforestation-and-forest-degradation">15% of global greenhouse gas emissions</a>.
The clearing of forests also leads to the loss of habitat, and brings humans and wildlife into closer contact, increasing the risk of transmission of infectious diseases such as COVID-19, Ebola and HIV from animals to humans.
Global forest loss continues <a href="https://research.wri.org/gfr/forest-extent-indicators/forest-loss#how-much-tree-cover-is-lost-globally-each-year">at a rate of around 25 million hectares a year</a>. This is an extremely alarming rate, and studies have found that even when all other anthropogenic greenhouse gas emissions are phased out, ‘business as usual’ deforestation alone could still drive global heating above <a href="https://iopscience.iop.org/article/10.1088/1748-9326/aa836d">2°C by 2100</a>.

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Globally the loss of tropical forests has continued to increase. This is largely driven by the commercial production of four commodities: cattle, soy, palm oil and timber. 
Cattle ranching to produce beef, leather, gelatine and tallow is the leading driver of deforestation in Latin America, and deforestation for cattle ranching alone is responsible for the release of <a href="https://wwf.panda.org/discover/knowledge_hub/where_we_work/amazon/amazon_threats/unsustainable_cattle_ranching/">340 million tonnes of CO2 each year</a> &#8211; about 3.4% of global annual emissions .  Soy production is another of the key drivers of deforestation in Latin America. This soy is used for personal care and medical products, fuel, food, and <a href="https://wwf.panda.org/discover/our_focus/food_practice/sustainable_production/soy/">most significantly as animal feed</a>.
Palm oil is a vegetable oil that is derived from the fruit on the African oil palm tree. It is used in a wide range of food, personal care, and household products, as well as to produce biofuel. The production of palm oil is linked to deforestation and climate changes as well as other issues such as habitat degradation, animal cruelty, and indigenous rights abuses. Palm oil production is the largest cause of deforestation in SouthEast Asia and other tropical regions.A recent study found that palm oil contributed to more than <a href="https://www.sciencedirect.com/science/article/pii/S0264837717301552">14% of forest loss</a> over 2005-2015.
The production of timber is another major driver of deforestation and forest degradation across the globe and is used for a variety of products from construction and furnishing, to paper and fabric goods.

Often, people only associate deforestation with agriculture or food production. However, the four forest-risk commodities described above are found in many value chains, across a large number of sectors. For the average company, <a href="https://www.cdp.net/en/research/global-reports/global-forests-report-2016">24%</a> of their revenue is dependent on these four forest-risk commodities. 
These products are used as key ingredients across a range of products from burgers and lipsticks, to construction materials and car seats. However, the link between deforestation and the goods we buy are often hidden by the structure of global supply chains.
A recent report by CDP (a charity that runs the global disclosure system, allowing companies to report and manage their environmental impacts) found that some companies report they are still unaware of the presence of the four main forest commodities in their supply chain or operations, or they are unaware of their impact. Below we highlight a number of sectors, and how they use these products.

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Agriculture 
The single largest cause of deforestation and forest degradation globally is agriculture, with large-scale commercial agriculture accounting for <a href="http://www.fao.org/state-of-forests/en/">40% </a>of tropical deforestation, and local subsistence agriculture for another <a href="http://www.fao.org/state-of-forests/en/">33%</a>.
Forest is cleared at alarming rates to grow crops, particularly soy and palm, and to provide grazing land for livestock, especially cattle. Agriculture is the clear cause of deforestation to produce the four forest-risk commodities. However, the sectors in which these commodities are used is often less clear.
Both export-driven, large-scale agriculture and small-scale agriculture have impacts on deforestation. If you take the Amazon rainforest as an example, commercial, large-scale agriculture, particularly for animal feed, and biofuels using soy and palm oil, is a key pressure that has been responsible for the <a href="https://wwfeu.awsassets.panda.org/downloads/wwf_living_amazon__report_2016_mid_res_spreads_1.pdf">largest losses of natural habitat</a> in the Amazon rainforest in recent decades. However, small-scale agriculture and legal and illegal settlement of small-scale farmers is expanding and is also impacting on forest loss.

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Food and beverage
The majority of deforestation in this sector is linked to meat, soy, and palm oil. Meat production is the most significant driver of deforestation, because as well as the vast clearance of land for grazing livestock (particularly cattle), huge amounts of forests are removed so that the land can be used to grow soy to feed the animals that we eat.
Soy is one of the four major forest-risk commodities, and more than <a href="https://www.wwf.org.uk/sites/default/files/2017-10/Risky%20Business%20-%20October%202017.pdf">80%</a> of soy grown globally is used to feed animals, particularly poultry, pigs and dairy cows.  Therefore, deforestation is at the core of many animal products that we consume: meat, dairy and eggs.
Soybeans also contain approximately <a href="https://www.bothends.org/uploaded_files/document/Soy_Barometer2014_ENG.pdf">18%</a> oil which is refined and used as vegetable oil for cooking in a wide variety of processed food. A valuable by-product from crushing soy is lecithin. This is an emulsifying agent in food products such as chocolate, cookies, peanut butter, and coffee creamers. About<a href="https://www.bothends.org/uploaded_files/document/Soy_Barometer2014_ENG.pdf"> 6%</a> of the global soy production is directly used in food products, predominantly in Asia: soy sauce, tempeh, tofu, soy flour, soy milk, textured vegetable protein and edamame. 
The most well known cause of deforestation within the food sector is palm oil. This is the most widely consumed vegetable oil on the planet, and is found in margarine, chocolate, pizza dough, instant noodles, ice cream, cookies, packaged bread and much more!
Food packaging is also a culprit, as the pulp and paper used to make them come from timber. Not all items appear on the shelf in cardboard packaging, but almost all will have arrived at the supermarket packed in a cardboard box. Wood is also used in the processing of some foods, for example smoking.
Automobile
Leather for cars comes from cattle. The non-profit organisation <a href="https://phys.org/news/2020-09-european-carmakers-leather-fuelling-deforestation.html">Earthsight</a> has revealed that some of Europe’s biggest car makers, including BMW and Jaguar Land Rover, use leather linked to deforestation in South America. These automakers buy leather for vehicle industries that is originally sourced from cattle ranches on illegally razed land in Paraguay.
The automotive and tyre industry is also the biggest consumer of rubber. Almost <a href="https://www.cdp.net/en/forests">90%</a> of natural rubber is produced in South East Asia, where it has become a leading driver of deforestation.

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Textiles
The leather from our shoes, bags and belts comes from cattle. Often the word ‘cattle’ is synonymous with ‘beef’, leaving leather to be labelled as just a by-product of the meat industry and meaning that the environmental impacts of the leather industry avoid scrutiny.
A report from <a href="https://forest500.org/sites/default/files/forest500_annualreport2019_final_0.pdf">Forest 500 </a>in 2019, found that 81% of the 64 most influential companies assessed for leather had no commitment to source deforestation-free leather, including Prada, Zara and Michael Kors.
Deforestation is also a factor in the supply chain of materials made from plant-based cellulose, such as viscose, rayon, bamboo and lyocell fibres. These fibres are made from timber, by processing wood until it forms pulp, adding inorganic fibres and spinning it until it forms fibres. Over <a href="https://forest500.org/analysis/insights/hidden-deforestation-fashion-industry-how-sustainable-sustainable-fabric">150 million trees </a>are logged annually for cellulose fibres for clothing.
Chemical
Many perfumes and flavourings, drugs, and cleaning products contain palm oil or soy. A valuable by-product from crushing soy is lecithin. This is an effective emulsifying agent used in paints, coatings, and waxes.  Palm kernel oil is also used in many chemicals for industrial use.  
Personal care
Many personal care products such as toothpaste, soap, and lipstick contain soy or palm oil. Lecithin, made by crushing soy, is an emulsifying agent that is used in cosmetics. Palm kernel oil is also used for making soap, toiletries, and cosmetics. Tissues, toilet paper, sanitary towels, tampons, and diapers are all made from wood.

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Retailers
Most retailers will sell items that have some of the four forest-risk commodities within them, whether that is furnishings, clothes, noodles, meat, dairy or confectionery.
An example is retailers that sell furniture. Most furniture is made from timber, varying from softwood furniture (e.g. pine) and plywood/laminate flat pack furniture to luxury hardwood (e.g. mahogany). These all have the potential to include damaging deforestation in their supply chain, unless it is ensured that they are sustainably sourced.
The same goes for leather furniture, sourced from cattle. Timber is also used to make musical instruments, tool handles, decorative items and for the packaging that most products will come in (e.g. pallets, cardboard boxes).
Forestry
Perhaps the most iconic symbol of forest destruction is wood production. Products made from wood can be divided into two categories: pulp and timber. Pulp is made from tree fibres and used to produce paper and related products. This is particularly an issue in Indonesia, where native forests are cut down for monoculture plantations of fast-growing tree species.
Timber is used for construction or high end-products like furniture and is linked to forest degradation, where valuable tree species are harvested, and the rest are left. These degraded forests are then <a href="https://conbio.onlinelibrary.wiley.com/doi/full/10.1111/j.1523-1739.2009.01338.x">more likely</a> to be targeted for deforestation and conversion to other land use.

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Print Publishing
The print publishing industry uses paper made from timber in newspapers, books, magazines, office paper, packaging tissues and labels. Timber is also often used to create advertising billboards.
Construction
The construction industry uses timber for both interior and exterior materials including timber frames for houses. Timber is also widely used as a construction material in flooring (solid wood; laminate or parquet blocks), window frames, doors and doorframes, skirting, decking, garden buildings, telegraph poles, fencing, boat building, and railway sleepers.
Energy
Worldwide, <a href="https://wwf.panda.org/our_work/our_focus/forests_practice/forest_publications_news_and_reports/living_forests_report/energy_forests/">2.6 billion people </a>use traditional biomass, mainly wood and charcoal, as a source of energy. Most wood fuel is used in its country of production, particularly in rural areas and in developing countries, for heating and cooking, usually on open fires or in simple cookstoves. In recent years, there has been an expansion of ‘bioenergy’ in industrialised countries, where biomass such as timber is burnt to generate energy.
Finance
Many investments directly or indirectly fund forest clearance. Data from the latest <a href="https://forest500.org/sites/default/files/forest500_annualreport2019_final_0.pdf">Forest 500 assessment</a> of the 150 biggest financial institutions investing in companies in forest-risk supply chains shows that two thirds do not have policies in place to address this risk. 
Fuel
Biofuels are fuels that can be used to drive our cars and other forms of transport that are made from biomass. This has the benefits of reducing emissions associated with fossil fuels, however there are associated risks, including the effect on the world’s forests.  Biodiesel is a type of vegetable oil that is produced from crops. Most biofuel is made from soy or palm oil, both of which are leading causes of deforestation.
Pharma
Soy, palm oil, and even timber are found in a number of medical products. An example is aspirin, which is made from the bark of the white willow tree. The pharmaceutical industry is also an industry that is likely to be affected by deforestation. Of the 50,000 known medicinal plants, which are the basis of more than<a href="https://www.worldbank.org/en/news/feature/2015/01/13/la-deforestacion-un-dolor-de-cabeza-para-la-medicina-natural"> 50% </a>of all medications, up to a fifth are at risk of extinction at the local, national, regional, or global level due to deforestation.

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Deforestation is a corporate responsibility issue that companies must address. The first step is to understand the risks in your business’ supply chain. Could your suppliers be linked to deforestation? Companies need to be more transparent about how they are using cattle, soy, palm oil and timber to enable the deforestation embedded in global supply chains to be publicly tracked. These risks can be addressed by working with your direct and indirect suppliers to ensure they are not driving deforestation and to promote sustainable production.
The Paris Agreement states that since companies are responsible for such a large percentage of emissions, they are also responsible for delivering the necessary reductions. By eliminating deforestation, the business community can deliver emissions reductions equivalent to <a href="https://static1.squarespace.com/static/575ecca7b654f9dd886dec23/t/576c39fdd2b857d28be73608/1466710526653/The+Business+End+of+Climate+Change.pdf">0.5-1.2 billion </a>metric tonnes.

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Deforestation is a global problem; its reach extends far and wide into many sectors and industries. However, by recognising this issue and working with suppliers, businesses can ensure that they are promoting sustainable production.
We also need to work to restore the forests that have been degraded and destroyed. Ecologi is a subscription service that is focused on planting trees to restore forests worldwide, as well as investing in <a href="https://ecologi.com/about">certified carbon reduction projects</a>, and we have already planted over 5 million trees!  Our goal is to avoid 50% of all global greenhouse gases by 2040, through tree planting and carbon reduction Gold Standard climate solutions. Learn more about <a href="https://ecologi.com/business">carbon offsetting for business.</a>

Ready to make a difference for our planet? Get in touch, and let’s chat about how we can help you on your climate journey. 

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UK Voluntary Carbon Market Guide: Best Practices for Climate Action

The voluntary carbon market plays an important role in corporate climate strategies – but its effectiveness relies on buyers doing due diligence and rigorous quality assessment on each project, as well as placing the purchase of credits in the right place in the climate journey.
To ensure meaningful climate impact, businesses must develop a comprehensive carbon strategy and find ways to fund only high-quality credits in the voluntary carbon market – and this guide shows you how to do so with Ecologi.

<h2>Table of contents</h2>
<ul>
<li>When to buy carbon credits</li>
<li>Our new carbon projects assessment framework</li>
<li>Ecologi&#8217;s core due diligence principles</li>
<li>How Ecologi scores and ranks carbon credit projects</li>
<li>Questions to ask your carbon credit supplier</li>
<li>Take action in the voluntary carbon market</li>
</ul>

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<h2>When should businesses buy carbon credits in the voluntary market?</h2>
Businesses must not use credits in place of making direct, measurable reductions in their emissions. Instead, follow these steps to ensure you buy your carbon credits on the right step of your corporate climate action journey, and in the right way:
<ol>
<li style="font-weight: 400;" aria-level="1">Measure your emissions first – to allow you to understand where your business’s emissions are coming from. 
</li>
<li style="font-weight: 400;" aria-level="1">Set science-based targets and work towards them – set ambitious targets aligned with the SBTi and compatible with the global 1.5ºC warming target.</li>
<li style="font-weight: 400;" aria-level="1">Beyond value chain mitigation (BVCM) – design your BVCM portfolio to work alongside your decarbonisation plan and address your unabated emissions in each reporting year. Align it with SBTi guidance and the Oxford Principles. </li>
<li style="font-weight: 400;" aria-level="1">Buy high-quality carbon credits – use this guide to ensure the carbon credits you buy meet rigorous quality standards. Remember, under the SBTi framework you’ll also need permanent carbon removal credits for neutralising your residual emissions when you reach your net-zero date.</li>
<li style="font-weight: 400;" aria-level="1">Disclose and report transparently – publicly disclose information about your carbon credit purchases, and clearly communicate the limited role of carbon credits in your broader sustainability strategy.</li>
</ol>

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<h2>Ecologi&#8217;s carbon project assessment framework</h2>
In April 2025, we published a report summarising how we assess carbon credit projects against our rigorous proprietary rubric. A snapshot of what goes into our carbon credit project assessment is below, or you <a href="https://cms-assets.offset.earth/app/uploads/20250428124112/Ecologi_Whitepaper_A4.pdf" target="_blank" rel="noopener">download the full whitepaper here</a>.

<h2>Carbon project due diligence: Ecologi’s core principles</h2>
At Ecologi, we maintain general due diligence principles which we apply universally across the voluntary carbon market, to support our efforts to supply only high-quality carbon credits.
<ul>
<li style="font-weight: 400;" aria-level="1">ICROA-endorsed standards only – we supply credits exclusively from carbon standards which are ICROA-endorsed.</li>
<li style="font-weight: 400;" aria-level="1">Responsive to ICVCM decisions – we support the ICVCM’s two-tick approach to providing CCP-Approval to project methodologies, and we go further still, to assess individual projects on their merits and limitations as well.</li>
<li style="font-weight: 400;" aria-level="1">Keep the carbon credit life cycle as short as possible – 75% of our credits in 2024 came directly from project developers and their nominated dispensaries (as opposed to intermediaries on the secondary market), maximising the proportion of purchase price which goes to the developer.</li>
<li style="font-weight: 400;" aria-level="1">Locally-appropriate projects only – we take care to ensure that supported projects are being applied in appropriate geographies, where they can have the greatest impact.</li>
<li style="font-weight: 400;" aria-level="1">Deep project-level scrutiny – our extensive assessment criteria are specific to each type of project, and we assess every project against these criteria, ensuring the project’s specifics have been taken into account.</li>
<li style="font-weight: 400;" aria-level="1">Methodological consensus – we synthesise data we receive from our partners Sylvera, BeZero Carbon, Calyx Global and Renoster) with our own in-house analysis to uncover where there is consensus about project quality, and improve confidence.</li>
</ul>

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<h2>How to evaluate carbon credits: Ecologi&#8217;s scoring methodology</h2>
We designed a three-layer assessment process which takes into account the merits and limitations of the carbon standard used, the carbon credit methodology used, and of the individual project design.
The tables below summarise some of the data inputs we use at each stage.

<h3>Assessment level: Carbon Standard</h3>
Examples: Gold Standard, Verra, Puro Earth, Isometric, Plan Vivo.

<h3>Assessment level: Methodology (or ‘Protocol’)</h3>
Examples: GS TPDDTEC, VM0048, ACM0002.

<h3>Assessment level: Project</h3>
Examples: GS 10790, VCS 1571.

Criteria in the assessment are categorised as either quality criteria or risk criteria, and are segmented by our three pillars of impact: Climate, Nature and People. Based on how it meets each criterion, the project gains points for quality criteria, and loses points for excess risk – ultimately giving a risk-adjusted value out of 100 for each of these pillars.
Having gathered our risk-adjusted pillar scores, we use our own unique scoring formula which weights the risk-adjusted Climate score of the project equally with the combined risk-adjusted Nature and People scores. The formula then produces an ‘overall’ score (also out of 100) for the project. In order to be supplied by Ecologi, projects must meet a minimum overall score of 80, and must achieve no lower than 65 in any given risk-adjusted pillar score.

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<h2>Key questions to ask carbon credit suppliers</h2>
Selecting the right carbon credit provider is important to help guide you to make informed choices as part of your corporate sustainability strategy. Before purchasing carbon credits, businesses should ask:
<h3>Project quality </h3>
<ul>
<li style="font-weight: 400;" aria-level="1">Do you assess/validate/underwrite project quality? If so, how?</li>
<li style="font-weight: 400;" aria-level="1">Do your projects get good ratings from the ratings agencies? If so, what ratings are they?</li>
<li style="font-weight: 400;" aria-level="1">Do you source credits directly from project developers, or from the secondary market?</li>
<li style="font-weight: 400;" aria-level="1">Do you monitor projects over time to ensure continued success, and how do you remedy it, if a project&#8217;s quality drops?</li>
</ul>
<h3>Due diligence</h3>
<ul>
<li style="font-weight: 400;" aria-level="1">How do you ensure you are supporting the right projects in the right locations?</li>
<li style="font-weight: 400;" aria-level="1">How do you account for project permanence and mitigate risks?</li>
<li style="font-weight: 400;" aria-level="1">What makes your projects additional?</li>
<li style="font-weight: 400;" aria-level="1">How do you assess the project&#8217;s impacts on climate, nature and people?</li>
</ul>
<h3>Positioning</h3>
<ul>
<li style="font-weight: 400;" aria-level="1">How do you contribute to the development of a high integrity voluntary carbon market?</li>
<li style="font-weight: 400;" aria-level="1">Do you align your portfolios with the Oxford Principles? If so, how?</li>
<li style="font-weight: 400;" aria-level="1">How do you reflect ICVCM guidance on carbon credit methodologies and technologies?</li>
<li style="font-weight: 400;" aria-level="1">Do you build multi-year portfolios that align to mid- &amp; long-term SBTs?</li>
</ul>
As the voluntary carbon market evolves, corporate buyers have the power and the responsibility to demand high-impact credits to drive real climate progress. This means buyers have a responsibility to do due diligence before placing an order for carbon credits.

<h2>Take action in the voluntary carbon market</h2>
As a business committed to corporate climate action, understanding the voluntary carbon market is essential for making informed decisions about carbon credits. Our comprehensive whitepaper provides deeper insights into creating an effective sustainability strategy.
<a href="https://cms-assets.offset.earth/app/uploads/20250428124112/Ecologi_Whitepaper_A4.pdf" target="_blank" rel="noopener">Download our full whitepaper</a> to learn how your business can navigate the voluntary carbon market with confidence.

<h2>Connect with one of our climate experts</h2>
Please complete our form to arrange a 30-minute discovery call to discuss your goals and get a tailored solution for your business.

Industries and sectors driving deforestation: what you need to know

Why are forests so important?

The Problem of Deforestation

The Four Commodities

Global Supply Chains

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