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 every six seconds, 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.

Forests cover 31% 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 2.6 billion tonnes of CO2, one third of the CO­2 released from burning fossil fuels, is absorbed by forests every year, and the 2019 IPCC special report of Climate Change and Land 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 80% 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 1.6 billion people (nearly 25% of the world’s population) rely on forests for their livelihoods, many of whom are among the world’s poorest. Over 200 million people, 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 $600 billion.

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, second only to the burning of fossil fuels, causing 15% of global greenhouse gas emissions.

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 at a rate of around 25 million hectares a year. 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 2°C by 2100.

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 340 million tonnes of CO2 each year – 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 most significantly as animal feed.

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 14% of forest loss 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, 24% 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.

Agriculture 

The single largest cause of deforestation and forest degradation globally is agriculture, with large-scale commercial agriculture accounting for 40% of tropical deforestation, and local subsistence agriculture for another 33%.

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 largest losses of natural habitat 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.

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 80% 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 18% 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 6% 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 Earthsight 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 90% of natural rubber is produced in South East Asia, where it has become a leading driver of deforestation.

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 Forest 500 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 150 million trees 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.

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 more likely to be targeted for deforestation and conversion to other land use.

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, 2.6 billion people 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 Forest 500 assessment 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 50% of all medications, up to a fifth are at risk of extinction at the local, national, regional, or global level due to deforestation.

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 0.5-1.2 billion metric tonnes.

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 certified carbon reduction projects, 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 carbon offsetting for business.