Why addressing deforestation is a strategic business priority

While much progress has been made over the past decade, deforestation continues to be a risk in the agriculture and forestry sectors. However, companies, governments and investors increasingly see the business value of staying focused on responsible commodity production and sourcing. In today’s evolving and often fragmented policy landscape, action to address deforestation can simultaneously help fulfil regulatory mandates, mitigate business risks associated with supply chain disruptions, and meet increasing customer and investor expectations.

As experts who have worked on deforestation-free supply chains for many years — from long before there were common definitions and metrics — we can attest that it is a complex challenge, which calls for multi-pronged and continuously-evolving solutions. It requires not only addressing deforestation risks within a company’s own supply chain, but also contributing to collective efforts to tackle its root causes, often in collaboration with a diverse range of stakeholders, including local communities.

To support companies navigating this landscape, the Accountability Framework offers an integrated approach to address deforestation and associated environmental and social impacts linked to supply chains. Its harmonized definitions and guidance have clarified expectations for companies. Developed by a diverse coalition of organizations, the Accountability Framework incorporates international norms and reflects the expertise of leading companies, financial institutions, and other stakeholders. That includes Bunge and PepsiCo as members of the AFi Private Sector Advisory Group.

Corporate action on deforestation will look different for each company depending on its supply chain position and unique business characteristics and contexts. Yet, there are common threads and foundational pillars for action. Here we highlight three key pillars of action, drawing on the experiences of the global agribusiness Bunge and the consumer goods manufacturer PepsiCo, while recognizing the continuous nature of this work and the need for ongoing improvement.

Firstly, companies should set goals to eliminate deforestation from their supply chains as quickly as possible. The Accountability Framework guides companies on setting clear, timebound goals, targets and milestones. This guidance is aligned with climate and nature target-setting and reporting instruments — including CDP, SBTi, SBTN and TNFD — so that companies can take an integrated approach to managing and disclosing on these linked issues.

Goals set by Bunge and PepsiCo illustrate key parts of this guidance. Company ambitions with 2025 target dates like Bunge’s reflect the importance of aiming to eliminate deforestation and ecosystem conversion to help mitigate the worst impacts of climate change and biodiversity loss. Bunge’s publicly-available reports detail specific cutoff dates and implementation strategies. Similarly, PepsiCo is continuing to strive towards deforestation-free sourcing by the end of 2025, and deforestation- and conversion-free sourcing by 2030, for high-risk commodities in company-owned and operated activities.

To meet stakeholder expectations for transparency, companies can use Accountability Framework-aligned indicators to disclose on the full scope of their commodity production and sourcing. Both Bunge and PepsiCo report in detail on sustainability efforts each year. Bunge’s report highlights that the company is on track to reach its deforestation-and conversion-free commitments for palm oil and priority soy sourcing regions in 2025.

Secondly, to achieve no-deforestation goals, it is important that companies have visibility into the origins of commodities in their supply chains. This can be challenging, particularly for companies further downstream in the supply chain, such as consumer goods manufacturers. Traceability, monitoring systems and company-wide responsible procurement policies provide the foundation to drive adherence to company policies throughout the supply chain.

In 2024, Bunge prioritized efforts on closing traceability gaps in its soy supply chains. The company achieved 100% traceability for direct sourcing, and 99% overall traceability for priority soy sourcing regions in South America. Bunge has developed its own traceability protocols for palm and soy. Continuous evaluation and enhancement of traceability processes are important for both environmental and social reasons, and Bunge addresses them vigorously. Additionally, last year Bunge monitored 36 million hectares with satellite technology, including 44,000 farms in the Brazilian Cerrado. The company shares access to its monitoring systems with peers to reinforce transparency and broaden the impact that technology and collaborative action can have across the industry.

PepsiCo has focused on strengthening its procurement guidance, facilitating supplier trainings, and improving traceability templates and its palm oil supplier scorecard. The company analyses scorecard results to monitor supplier progress and determine areas for future supply chain engagement. In 2024, PepsiCo collaborated with satellite monitoring platform Satelligence to detect and respond to deforestation events and verify origins as deforestation-free.

Thirdly, ongoing success in managing deforestation risk and building supply chain resilience requires engaging in sourcing areas to support sustainable land use practices, long-term ecosystem protection, and improved local livelihoods.

For instance, Bunge works with its supplier Musim Mas to help palm producers improve their practices and drive their continued inclusion in global supply chains. Company programmes aim to help smallholders — whose farms are on average 40% less productive than large plantations — to increase yields and earnings from their existing farmlands. In 2024, the company’s train-the-trainer programme in Indonesia equipped 150 village officers and reached 1,500 individual smallholders.

PepsiCo works with its suppliers, peer companies, civil society and others — directly and through multi-sectoral collaborations — to address the systemic issues that cause deforestation in key sourcing origins like Indonesia and Mexico. The company continues to invest in landscape approaches that enable responsible agricultural production, resilient livelihoods through improved yields and income diversification, and thriving natural ecosystems to co-exist.

As part of its efforts, PepsiCo is investing in its palm oil supply chain and collaborating on long-term forest conservation projects that aim to create jobs and economic development opportunities for communities. For example, the Rimba Collective aims to deliver $1 billion to forest protection and restoration in Southeast Asia over 30 years. Investments from PepsiCo and others in the initiative are aimed at protecting and restoring half a million hectares of tropical forests and improving 35,000 livelihoods.

All companies that produce or source agricultural or forestry commodities can join peers like Bunge and PepsiCo that have shown leadership in addressing complex supply chain challenges, while openly acknowledging the ongoing nature of this work. Companies at any stage of their journey can look to the Accountability Framework for guidance and a roadmap for action. Amid policy uncertainty, following this widely-recognized global reference can help reduce risk and deliver on multiple mandates with one integrated strategy. Prioritizing action today where impacts are most significant will drive your company on a path to achieving supply chains that are forest-positive and people-centric.