Commodity deforestation
The concept of commodity-driven deforestation or ‘commodity deforestation’ refers to the deforestation (or conversion of natural ecosystems) attributable to the production of a given commodity. It corresponds to the areas cleared for crop cultivation or livestock farming. For example, we would refer to ‘soy deforestation’, ‘cattle deforestation’ or ‘palm oil deforestation’ in each of these specific supply chains. An indicator of commodity deforestation is typically expressed in hectares of deforestation per ton (or thousand tons) of product.
Conversion
Change of a natural ecosystem to another land use or profound change in a natural ecosystem’s species composition, structure or function. Deforestation is one form of conversion (conversion of natural forests). Conversion includes severe degradation or the introduction of management practices that result in a substantial and sustained change in the natural ecosystem’s former species composition, structure or function. Change to natural ecosystems that meets this definition is considered to be conversion regardless of whether or not it is legal.
Cut-off date
The date after which deforestation or conversion renders a given area or production unit non-compliant with no-deforestation or no-conversion commitments, respectively.
Deforestation
Loss of natural forest as a result of conversion to agriculture or other non-forest land use, conversion to tree plantation, or severe and sustained degradation.
Degradation
Changes within a natural ecosystem that significantly and negatively affect its species composition, structure, and/or function and reduce the ecosystem’s capacity to supply commodities, support biodiversity, and/or deliver ecosystem services.
Disclosure
Public sharing of information by companies. This can include reporting that is available to the public on demand or free public sharing of information such as company policies and commitments; company business structures, affiliates, and financial interests; supplier lists; conflicts of interest; or political action (lobbying, campaign contributions, etc.). Disclosure is a mechanism for transparency.
Due diligence
A risk management process implemented by a company to identify, prevent, mitigate, and account for how it addresses environmental and social risks and impacts in its operations, supply chains, and investments.
Interpersonal trust
The perception that other people will not do anything that will harm your interests; an individual’s willingness to accept vulnerability or risk based on expectations regarding another person’s behaviour.
Jurisdictional approach
A jurisdiction is an administrative area where a particular system of laws is applied – a municipality, a district, a province, a state. A jurisdictional approach refers to a government-led, comprehensive approach to address social and environmental challenges (e.g. deforestation, ecosystem conversion or human rights violations) and/or increase social and environmental benefits (e.g. farmer livelihoods, smallholder inclusion or sustainable forest management) across one or more legally-defined territories.
Low risk
A conclusion, following a risk assessment, that there is negligible or insignificant risk that material produced in or sourced from a given context is non-compliant with one or more aspects of social and environmental commitments or obligations. Low risk is defined per context and risk topic (e.g. aspect of a company’s social and environmental commitments or obligations). A given production region may be considered low risk for one aspect of a company’s commitment but higher risk for other aspects.
Metric
An objective and verifiable measure used to assess conditions, actions, outcomes or trends (e.g., in relation to a given land area, facility, supply chain, company, process or system).
Monitoring
An ongoing function that uses the systematic collection of data on specific metrics to assess and document the extent to which actions, progress, performance and compliance are being carried out or achieved.
Risk
The probability of a potential adverse impact combined with its potential seriousness.
Stakeholder
A person, group or organisation with an interest in a given supply chain or sector, with the ability to influence the outcomes of these activities, and/or the potential of being impacted by these activities.
Supply chain mapping
The process of identifying the actors in a company’s supply chain and the relationships among them.
Supply chain traceability
Refers to the ability to trace the origin, production, processing history and distribution of a given product. Traceability plays a key role in supply chain management and traceability information usually remains in the ownership of supply chain actors that generate it, unless required by law, commercial agreements of voluntary disclosure.
Supply chain transparency
Encompasses various dimensions seen as necessary to improve sustainability practices and standards, such as monitoring, voluntary or compliant disclosure, reporting, complaints resolution and verification. Transparency has a clear outer-looking dimension of demonstrating performance and building trust. It can include various sources of information, such as physical traceability and financial transactions in the supply chain, social and environmental impacts and risks, but also accountability aspects such as policy commitments, actions undertaken and their effectiveness.
Three different yet complementary supply chain transparency approaches can be distinguished, depending on the type of actor driving it and their objectives:
- Corporate transparency: refers to the ability of businesses not only to know internally that they are exercising due diligence but also to show externally that this is the case.
- Radical transparency: availability of new digital technologies, social and data innovations has opened the way for more ‘radical’ transparency by independent initiatives. These include the third-party disclosure of information that may be involuntarily given away by target actors and used possibly without their knowledge or consent.
- Normative transparency: regulated or mandatory information disclosure is used as a mechanism to reduce information asymmetry among actors, improve governance and support increased accountability.
Tracking
The action of following products from one stage of the supply chain to the next. Tracking alone does not include the ability to retrieve a product’s origin.
Verification
Assessment and validation of compliance, performance, and/or actions relative to a stated commitment, standard or target. Verification processes typically utilise monitoring data but may also include other sources of information and analysis. Related definitions include:
- First-party verification: Conducted by the organisation itself but carried out by personnel not involved in the design or implementation of the operations being verified.
- Second-party verification: Conducted by a related entity with an interest in the company, public institution or operation being assessed, such as the customer of a production/processing operation or a contractor that also provides services other than verification.
- Third-party verification: Conducted by an independent entity that does not provide other services to the organisation.
