Less than 10% of global companies have committed to ending deforestation by 2025, widening the gap between commitments and tangible actions, according to a new report from environmental non-profit CDP.
In a Thursday news release, CDP revealed that while a record 1,043 companies are now disclosing deforestation-related risks through the non-profit – an increase which may be attributed to shifts in consumer preference or increased severity of extreme weather – the majority are failing to mitigate risks effectively and less than 10% have “a robust public commitment” in place to end deforestation by 2025.
CDP argued that the financial impact related to deforestation risk is “vastly underreported,” with an average of $300 million at risk per reporting company if they fail to act, compared to $17.4 million at risk if companies act now.
Around one in 10 reporting companies stated that they were near to achieving the eradication of deforestation from their operations and supply chains.
Companies disclosed more than 50 different risk drivers across four main categories of risk, including physical, reputational, technological, and regulatory deforestation-related risks.
227 companies disclosed increased brand value as an opportunity, while 151 recognized an increased demand for certified materials.
The report issued a warning to financial institutions that deforestation is “seen by many as the new coal in financial portfolios,” and set out a range of “key actions” that financial institutions can take to cut deforestation from their portfolios.
“It was a record-breaking year for companies disclosing on their impacts on forests, which is encouraging for transparency, but we continue to see a gap between commitments and tangible actions,” said CDP Global Director, Forests and Land Use, Thomas Maddox. “The eradication of deforestation from commodity supply chains requires appropriate financial and policy incentives to prioritize action.”