Head of Marketing
Edited: 21 Aug 2025
15 min read
The tropics lost a staggering 6.7 million hectares of primary rainforest in 2024, nearly doubling the loss from 2023. This equates to 18 football fields of forest disappearing every minute, marking the highest loss in at least two decades. Often, this loss is driven by the production of just four key commodities: soy, beef, palm oil, and timber.
In this article, we explore the industries and value chains most exposed to deforestation risk and explain how businesses can start to take action. From regulatory pressures to shifting consumer expectations, understanding deforestation is an ethical, environmental, and business issue.
Why forests matter to people, planet, and profit
Forests cover nearly a third of the planet’s land area, and they’re indispensable for a stable climate. Each year, forests absorb around 2.6 billion tonnes of CO2, roughly one-third of the carbon dioxide released from fossil fuel use. The IPCC has confirmed that protecting and restoring forests is central to any credible pathway to limiting global heating to 1.5°C.
But their value extends far beyond carbon. Forests regulate rainfall, protect biodiversity, enrich soil, filter water, and support food systems. They’re also home to 80% of the world’s terrestrial species, and provide essential ecosystem services like pollination and flood control.
For people, forests are a vital economic lifeline. An estimated 1.6 billion people (including over 200 million Indigenous people) rely on forests for income, food, medicine and shelter (World Bank). The forestry sector generates more than $600 billion in annual value and supports a vast global supply chain.
The growing threat of deforestation
Despite their critical role in climate stability and human wellbeing, forests are still being cleared and degraded at an alarming pace. Around 25 million hectares are lost each year, driving carbon emissions, biodiversity loss and supply chain instability.
Deforestation is the second-largest source of human-caused greenhouse gas emissions globally, behind only fossil fuels, and is responsible for approximately 11% of global carbon emissions. In 2024 alone, the destruction of primary tropical forests released an estimated 3.1 billion tonnes of CO2, roughly equivalent to the annual emissions of the entire European Union.
The impacts are cascading. Forest clearance accelerates climate change and disrupts essential ecosystem services. It also increases the risk of the emergence of zoonotic diseases like COVID-19 and Ebola by bringing humans into closer contact with wildlife.
Critically, scientists have found that if deforestation continues at current rates, it could push global temperatures above 2°C by the end of the century, even if all other emissions are brought to zero.
The four biggest drivers of deforestation
In 2024, for the first time on record, wildfires became the primary driver of tropical primary forest loss, accounting for nearly 50% of the destruction. However, it has traditionally been the economy that drives most of the world’s deforestation - specifically, just four global commodities: beef, soy, palm oil and timber. These “forest-risk commodities” appear in many consumer goods and industrial supply chains, often invisibly.
Beef production, particularly in Latin America, is the single largest driver of deforestation worldwide. Forests are cleared for cattle grazing or converted to pasture that ultimately supports the leather, meat, gelatine and tallow industries. Cattle ranching alone is responsible for roughly 340 million tonnes of CO₂ emissions each year - about 3.4% of global annual emissions.
Soy is another major deforestation driver, primarily in South America. While soy shows up in some food products and personal care items, its biggest use is less visible: around 80% of the global soy crop is used for animal feed, especially in poultry, pork and dairy supply chains.
Palm oil is the most widely consumed vegetable oil in the world. It’s found in thousands of products - from snacks and soaps to biofuels. But its cultivation is the leading cause of deforestation in Southeast Asia, and a key driver in other tropical regions as well. Between 2005 and 2015, palm oil was linked to over 14% of global deforestation.
Timber is used for construction, furniture, packaging, paper, and textiles. Poor forest management, illegal logging, and high demand for wood-based products all contribute to global deforestation and forest degradation.
How deforestation risk is embedded in global supply chains
While deforestation is often associated with agriculture, the reality is more complex. The four key forest-risk commodities (beef, soy, palm oil, and timber) appear in a wide range of sectors and products, from lipstick to laminated flooring. In fact, an older CDP study estimates that 24% of the global revenue of CDP-surveyed companies is linked to these commodities.
The structure of global supply chains often obscures where deforestation occurs. Many companies still don’t know whether their products contain ingredients linked to forest loss, or where those impacts are happening. In 2024, only 7% of CDP-disclosing companies “made a high-quality disclosure and reported that at least one commodity supply chain was 100% deforestation- or conversion-free.”
For businesses aiming to reduce Scope 3 emissions or strengthen sustainability claims, understanding the origin of materials and ingredients is critical. In the sections below, we explore how these forest-risk commodities show up in different industries, and what it means for corporate due diligence and procurement.
Agriculture: the largest driver of global deforestation
Agriculture remains the single biggest cause of deforestation worldwide. Around 40% of tropical deforestation is linked to large-scale commercial agriculture, with another 33% tied to smallholder or subsistence farming (FAO).
Forests are often cleared to make way for soy, palm oil, and cattle grazing - the foundations of many global food and commodity supply chains. Whether for animal feed or biofuel production, these land use changes drive large-scale habitat loss, particularly in regions like the Amazon.
Both large and small-scale agriculture play a role. While major agribusinesses drive the conversion of forest to cropland or pasture, smaller farming communities (often operating at the edge of legality) are also expanding into previously forested areas. This blend of pressures makes deforestation especially difficult to monitor and manage.
Understanding where and how your suppliers source agricultural inputs is a key step for businesses aiming to manage scope 3 deforestation emissions and build sustainable procurement policies.
Food and beverage: deforestation hidden in everyday products
Deforestation risk is deeply embedded in food and beverage supply chains. Meat, soy, palm oil and packaging materials are all major contributors.
Meat is a key driver, not just due to grazing land for livestock, but because vast areas of forest are cleared to grow soy for animal feed. Over 80% of the world’s soy is used to feed poultry, pigs, and dairy cows, meaning deforestation often sits behind everyday items like chicken, eggs, and cheese.
Palm oil is another significant concern. It’s the most widely consumed vegetable oil globally and appears in countless products - margarine, chocolate, noodles, cookies, pizza dough, and more. Its cultivation continues to drive large-scale forest loss, particularly in Southeast Asia.
Soy oil and soy by-products like lecithin are also common in processed foods and personal care items. While only about 6% of soy is consumed directly by humans (e.g. tofu, soy sauce, soy milk), it’s widely used in manufactured goods as an emulsifier or oil base.
Packaging also plays a role. Pulp and paper from timber are used extensively across the food sector – not just in what we see on shelves, but also in shipping and processing. Even smoked foods can be linked to forest-derived materials.
For food brands and manufacturers, addressing deforestation means rethinking ingredient sourcing, animal feed supply chains, and sustainable packaging procurement.
Automotive: leather and rubber linked to forest loss
Deforestation risk in the automotive sector is often overlooked, but leather and rubber are two key commodities with major forest impacts.
Leather used in vehicle interiors is typically a by-product of the beef industry. But that doesn’t exempt it from deforestation risk. Investigations have shown that some European carmakers, including BMW and Jaguar Land Rover, have sourced leather originating from cattle raised on illegally deforested land in Paraguay.
Rubber is another major concern. Around 90% of natural rubber comes from Southeast Asia, where rising demand, particularly from tyre manufacturers, has made it a growing driver of tropical deforestation.
As scrutiny of supply chain emissions and deforestation due diligence increases, car manufacturers face pressure to trace materials, ensure sustainable sourcing, and eliminate links to illegal land conversion.
Textiles: leather and plant-based fibres carry hidden deforestation risks
The fashion industry’s deforestation footprint often hides in plain sight.
Leather used in shoes, bags and belts is closely tied to cattle ranching. While it's often marketed as a by-product of the meat industry, this framing obscures its role in driving demand for land conversion. A Forest 500 from 2019 report found that 81% of the top companies using leather lacked a clear commitment to deforestation-free sourcing.
Plant-based materials can also carry deforestation risks. Fibres like viscose, rayon, lyocell and bamboo are made from cellulose, typically derived from wood pulp. Over 150 million trees are logged each year for these fibres. Without robust procurement standards, fashion brands risk contributing to forest degradation through their material choices.
Chemicals and personal care: soy and palm oil in everyday products
Many industrial chemicals and personal care products contain ingredients that trace back to deforestation hotspots.
Soy derivatives, such as lecithin, are widely used as emulsifiers in paints, coatings, and waxes. Palm kernel oil appears in everything from detergents and soaps to cosmetics and lubricants.
In personal care, items like lipstick, toothpaste, and body wash often rely on palm oil-based surfactants. Even tissue products and hygiene goods (like nappies or tampons) are typically made from timber-derived pulp.
Brands in these sectors should examine their formulations and procurement strategies, especially when working toward deforestation-free supply chains.
Retail: embedded risk across product categories
Most retailers stock products linked to forest-risk commodities – whether directly or via ingredients, packaging or components.
Furniture is a clear example. Whether made from softwoods like pine or tropical hardwoods like mahogany, timber used in furnishings can be a major source of forest degradation. The same is true for leather sofas or accessories.
Even everyday items like packaged snacks, cleaning products, or homewares can contain palm oil, soy derivatives, or be packaged in pulp-based materials. Unless sourcing policies are in place, deforestation can be present in almost every aisle.
Forestry and construction: managing the core commodities
Pulp and timber are foundational materials in forestry and construction, and both are high-risk from a deforestation standpoint.
Pulp, made from tree fibres, is used for paper, packaging, and hygiene products. In places like Indonesia, forests are often cleared to make way for fast-growing plantations that supply the global pulp trade.
Timber is used across construction and manufacturing – from framing and flooring to skirting, decking, fencing, and railway sleepers. Poor forest management practices, overharvesting, and illegal logging contribute to widespread forest degradation, particularly when forests are stripped of high-value species and left vulnerable to further clearing.
Energy and fuel: the forest cost of biomass and biofuels
Wood fuel remains the primary energy source for over 2.6 billion people globally, particularly in rural and low-income areas. Most is burned directly as firewood or charcoal, contributing to deforestation and forest degradation at scale.
In wealthier nations, demand for biomass energy has surged, with some utilities burning wood pellets sourced from forests under the banner of “renewable energy.” Without strong sustainability safeguards, this can undermine emissions goals and biodiversity protection.
Biofuels, including those derived from soy and palm oil, are promoted as fossil fuel alternatives, but they also carry significant land-use change emissions. Scaling these fuels without strong deforestation-free safeguards can shift climate burdens elsewhere.
Finance: funding drives deforestation too
Deforestation isn’t just about products – it’s also about capital.
According to Global Canopy, over 75% of more than 700 financial institutions do not have a public deforestation policy covering high-risk commodities. Without clear due diligence processes, financial flows can support companies involved in illegal land clearing, poor forest governance, or unsustainable sourcing.
For banks, investors, and insurers, deforestation is a material ESG risk. And for consumer-facing companies, financial partnerships increasingly come under scrutiny for alignment with sustainability commitments.
Pharma: overlooked links to deforestation
The pharmaceutical industry’s supply chain is not immune.
Palm oil and soy derivatives are often used in drug coatings, emulsifiers, and production processes. Timber-derived ingredients also appear. For example, aspirin is traditionally derived from salicin, found in the bark of the white willow tree.
Deforestation also threatens the industry’s resource base. Of the 50,000 known medicinal plants, many are found in tropical forests. An estimated 20% face extinction risks due to forest loss.
As pharmaceutical companies ramp up ESG strategies and biodiversity disclosures, forest-risk awareness will be a growing area of focus.
Sector | Key deforestation risks | What businesses should do |
|---|---|---|
Textiles | Leather (cattle), cellulose fibres (viscose, rayon, bamboo) | Set deforestation-free sourcing policies for both leather and wood-based fibres |
Chemicals & personal care | Soy derivatives (lecithin), palm kernel oil, pulp-based packaging and hygiene products | Review formulations and packaging; prioritise certified deforestation-free inputs |
Retail | Forest-risk goods across furniture, food, cosmetics, packaging | Map product categories for exposure; strengthen supplier due diligence |
Forestry & construction | Timber and pulp for construction, flooring, paper, packaging | Source FSC or equivalent-certified timber; avoid suppliers linked to forest conversion |
Energy & fuel | Wood fuel, biomass pellets, soy and palm-based biofuels | Screen energy procurement and fuel sources for sustainability and land-use impact |
Finance | Investments in companies lacking deforestation safeguards | Apply deforestation screens to portfolios; align with emerging ESG standards |
Pharma | Palm and soy inputs in production; loss of medicinal plants due to forest degradation | Audit ingredient supply chains; consider biodiversity impact in ESG risk management |
Other industries: why deforestation is still your business
Even if your company doesn’t produce physical goods or work directly with agricultural supply chains, that doesn’t mean deforestation isn’t part of your footprint.
For service-based industries like finance, consultancy, education, tech, hospitality and professional services, deforestation risk often shows up indirectly. That could be through:
Business travel and events with high catering footprints
Paper-based procurement, packaging or promotional materials
Office furniture and fit-outs using tropical timber
Investments or pension plans tied to land-use change
These might not be your core operations, but they’re still part of your broader value chain. And as more companies set net-zero targets and science-based goals, it's increasingly important to factor in land-use impacts, particularly within your scope 3 emissions.
The good news is that Ecologi has developed sector-specific guidance to help you get started. If you’re in the service industry, start by checking out our free Net-Zero Protocol for Accountancy or Net-Zero Protocol for Hospitality. These practical playbooks outline where the risks and opportunities lie and how to make meaningful progress from where you are.
Because no matter what sector you're in, eliminating deforestation from your footprint is possible, and it’s an important step on the journey to credible, planet-positive climate action.
What businesses can do to tackle deforestation
Deforestation risk is now a material issue for most businesses, whether it shows up through ingredients, packaging, manufacturing inputs or finance. But there’s a clear path to reducing your exposure and building a deforestation-free supply chain.
1. Assess your supply chain risk
Start by identifying where forest-risk commodities - soy, beef, palm oil and timber - show up in your supply chain. This may be obvious (e.g. raw materials) or less so (e.g. animal feed, product coatings, or packaging).
Map products, suppliers, and sourcing regions
Prioritise high-risk categories based on geography, volume, or spend
Use supplier engagement, questionnaires, and lifecycle tools to build visibility
Build a deforestation-free procurement strategy
Once you understand your exposure, take steps to eliminate deforestation from your purchasing practices:
Make a public no-deforestation commitment with a clear scope and timeline
Update procurement policies to require traceability and third-party certifications (e.g. FSC, RSPO, RTRS)
Embed expectations in supplier contracts and codes of conduct
Work with suppliers to support better practices and increase transparency
These actions also help address scope 3 deforestation emissions and contribute to sustainable procurement goals.
3. Prepare for new regulations
Voluntary action is no longer enough. The EU Deforestation Regulation (EUDR) will soon require businesses to prove that goods sold in the EU are deforestation-free and legally produced. The UK is also rolling out similar due diligence rules under the Environment Act.
Start preparing now by:
Collecting sourcing documentation and geolocation data
Reviewing supplier compliance and certification
Disclosing policies and performance in your sustainability reporting
4. Fund forest restoration
Reducing deforestation in your supply chain is essential. But many businesses are also choosing to fund reforestation and forest protection projects as part of their broader climate and nature strategies.
Funding projects helps reverse historical loss, strengthens your climate contribution, and gives you a powerful story to share with your customers and stakeholders.
Case study: How Protect Earth is supporting forest restoration through local partnerships
One of Ecologi’s partners, Protect Earth, is focused on reforesting degraded land across the UK. Despite its green image, the UK has some of the lowest tree cover in Europe - just 13%, compared to an EU average of 38%. In England, many neighbourhoods have less than 10% tree cover.
Protect Earth works directly with landowners, volunteers and communities to restore native woodlands, increase biodiversity and improve soil and water quality. Their projects follow best-practice ecological restoration principles and contribute to carbon sequestration through the Woodland Carbon Code.
Business support helps scale this work. Funding enables Protect Earth to purchase land for long-term restoration, plant native species at the right density and diversity, and maintain sites so they thrive over time. It’s a way for companies to contribute to forest recovery close to home – and share a meaningful story with employees, customers or stakeholders.
Investing in projects like this can complement your decarbonisation strategy, align with Oxford Principles-aligned climate contributions, and provide measurable impact in your own country.
New regulations are coming for deforestation due diligence
In the past, deforestation due diligence was largely voluntary. But that’s changing fast.
Governments are introducing binding legal requirements that will force businesses to prove that forest-risk commodities in their supply chains (soy, palm oil, timber, cattle products) aren’t linked to deforestation or forest degradation.
The EU Deforestation Regulation (EUDR) is the most comprehensive to date. Coming into force from December 2024 for large businesses, it requires companies placing relevant goods on the EU market to:
Prove that those products are deforestation-free
Collect and report traceability data (including GPS coordinates for commodity origin)
Show compliance with local laws on land use and rights
Submit due diligence statements to an EU-wide information system
Fines for non-compliance can be steep (up to 4% of EU turnover), and regulators are building in checks, enforcement mechanisms and public scrutiny.
In the UK, a similar regime is being developed under the Environment Act. While narrower in scope (initially focused on “illegal deforestation” only), it will still require businesses to carry out due diligence, publish annual reports, and prove that products like soy and palm oil are legally sourced. More detail is expected when secondary legislation is introduced, but the direction of travel is clear.
For businesses, this marks a major shift. Voluntary commitments will no longer be enough, and robust due diligence will become a legal expectation.
What you can do now:
Map where forest-risk commodities show up in your supply chain
Engage suppliers on traceability and certification
Start collecting origin data and documentation
Review your procurement and disclosure processes
Taking action now protects your business from regulatory risk and builds trust with customers, investors, and sustainability partners.
Work with trusted partners to address deforestation (like Ecologi!)
Addressing deforestation in your supply chain is no longer optional. It’s essential for reducing exposure to environmental and regulatory risk, meeting growing disclosure expectations, and supporting the kind of climate action that actually restores ecosystems.
At Ecologi, we help businesses take meaningful steps: from identifying and cutting deforestation out of supply chains, strengthening reporting and due diligence processes, and funding high-quality restoration projects that deliver measurable outcomes for nature, climate, and communities.
If you’re ready to act on supply chain deforestation with confidence and credibility, we’re here to help.