From Commitment to Implementation: Our Reflections from Working with Corporates on Deforestation
Anna Hattam, Dr Rebecca Drury and Gemma James
Marking our recent partnership with the Accountability Framework initiative to accelerate action on deforestation, we reflect on how companies can make meaningful commitments on forest-related issues and implement these effectively.
Companies rely on forests for raw materials, carbon sequestration, climate and water regulation, pollination and other ecosystem services to provide the goods and commodities their supply chains rely on. Deforestation, conversion and forest degradation therefore pose material risks to individual companies and the global economy. In 2021, the World Bank estimated that, under a business-as-usual scenario, continued conversion of natural lands to cropland, pastureland and forest plantations could result in up to $225 billion in lost GDP by 2030.[1] Further, the collapse of just three ecosystem services: timber from native forests, wild pollination and food provision from marine fisheries, could cost the global economy $2.7 trillion a year by 2030.[2]
The regulatory risks associated with deforestation are rising. The EU Deforestation Regulation (EUDR) sets minimum fines at 4% of annual turnover, and non-compliant companies may face the confiscation of goods and sale revenues, temporary bans from the EU market, and exclusion from public procurement. The UK government is following suit, recently announcing that it will consult on a new GB deforestation policy under the Environment Act 2021.[3]
Regulatory scrutiny of environmental claims is also intensifying. From 27th September 2026, the EU's Directive on Empowering Consumers for the Green Transition (EU 2024/825 – “ECGT”) will prohibit generic environmental claims, such as that a product or company is “green”, “environmentally friendly” or “sustainably sourced”, unless they can be clearly substantiated. Where such claims rely on sustainability labels or certification schemes, those schemes must either qualify under a recognised certification framework or be established by a public authority. For forest-related claims, including “deforestation-free”, this raises the bar on how such claims can be marketed, not just how supply chains must be managed.
The Deforestation Commitment Gap
In 2025, only 29% of companies in Global Canopy's Forest 500 had made a deforestation commitment.[4] Further, of the 1,200 forest-related risks that 827 companies disclosed via the CDP, fewer than half have been quantified into financial impacts. The consequence is that it is difficult for investors to understand how deforestation-related risks are being understood and managed.[5]
A recent media and controversy analysis, conducted as part of a deforestation benchmark we developed, surfaced an uncomfortable finding: even companies with the strongest documented commitments to protect forests had been linked to on-the-ground cases of deforestation, land clearance and Indigenous Peoples’ rights abuses. Therefore, whilst commitments signal intent, they should only be viewed as the starting point, not the finish line.
Closing the gap between commitments and meaningful action requires companies to adopt the policies and systems that allow them to effectively manage their suppliers and supply chains for compliance. This means they must (i) ensure forest-related commitments are grounded in clear and robust definitions, (ii) establish governance and oversight of forest-related issues at the board level, (iii) operationalise the management of these issues across business functions, and (iv) actively engage suppliers. The Accountability Framework initiative offers consensus-based guidance and practical tools to help companies and investors in this regard.
Since 2023, Chronos Sustainability has worked with companies across sectors to strengthen their approach to forest-related risks and opportunities. This has included developing deforestation sourcing policies, strategies and supply chain risk management tools for food and beverage and automotive companies; supporting a group of UK asset owners, originally convened through Brunel Pension Partnership, on a climate physical risk engagement programme with 20 consumer staples companies; and developing and piloting a deforestation benchmark assessing 20 of the largest global pulp and paper producers. As a newly appointed AFi Delivery Partner, we are pleased to be working even more closely with the AFi as we help companies translate commitments into meaningful action, building on our experience supporting businesses to address nature-related risks across complex supply chains.
From our experience, four actions have proven to be particularly important when moving from commitments to implementation.
1. Define Forest-Related Commitments beyond Certification and Legality
We have found that companies repeatedly use third-party certification claims in lieu of explicit no-deforestation and no-conversion targets, or specific cut-off dates. While certification allows companies to determine whether a supplier adheres to certain audited environmental standards, respects Indigenous Peoples’ rights, and complies with local legislation in the harvesting country, it is not equivalent to a no-deforestation claim.
For example, Chain of Custody (CoC) certification can improve traceability across a supply chain, but does not, on its own, guarantee that materials are deforestation-free. Similarly, mixed-material labels, such as FSC Mix, allow certified volumes to be blended with lower-scrutiny “Controlled” sources. Whilst these sources undergo risk screening to exclude illegal logging alongside other issues, they require additional controls to guarantee no-deforestation or conversion.
Legal compliance is an equally weak proxy for deforestation-free status. As environmental laws vary across jurisdictions, a commodity sourced in full compliance with local laws may be free from illegal deforestation, but is not guaranteed to be deforestation-free if the law allows for the conversion of forests and other natural ecosystems.
A related and equally important issue is the way companies define deforestation and other related terms. Loose definitions may create loopholes which lead to deforestation and forest degradation. For example, definitions which count monoculture plantations, such as oil palm, rubber or timber, as forest cover may allow companies to clear ancient, biodiverse forest and replace this forest with single-species plantations whilst still claiming no net deforestation.
Cut-off dates, the point after which any land clearance counts against a company's no-deforestation claim, matter for the same reason. Without a clear cut-off date, suppliers may clear forest land today and still claim their products are deforestation-free tomorrow. A clearly identified cut-off date therefore helps to prevent companies sourcing from forests subject to recent events of deforestation.
This distinction is not only a matter of good practice, but as mentioned earlier, is becoming a legal requirement. Under ECGT, companies will be restricted from using sustainability labels or claims that are not based on a certification scheme meeting minimum transparency and verification criteria, or established by a public authority. A certification claim presented as equivalent to a no-deforestation commitment, without the underlying substantiation under ECGT, will therefore carry compliance as well as reputational risk.
Therefore, when developing policies, supplier requirements and guidelines, companies should:
Make deforestation commitments which are separate from certification claims or targets
Ensure key terms (such as no-deforestation, no-conversion, natural forest, degradation) are defined in a way which aligns with the Accountability Framework initiative’s Terms and Definitions guidance.
Make commitments to no gross deforestation[6], as opposed to no net deforestation[7]. This means definitions must explicitly separate natural forests from monoculture plantations and define deforestation as the total loss of natural ecosystems, instead of offsetting the clearing of natural forests by planting trees or restoring land elsewhere.
Set no-deforestation and no-conversion commitments with a cut-off date of 31st December 2020, in line with the EUDR legislation and AFi guidance, across all operations, independent of certification timelines.
Ensure any certification-related claims used in marketing or investor communications can be substantiated to the standard required under the EU's Empowering Consumers for the Green Transition Directive, effective 27th September 2026.
2. Establish Board-Level Governance and Oversight of Deforestation
Our benchmark of pulp and paper producers found that board-level and operational oversight was the single strongest predictor of company performance, regardless of geography. Companies which had explicitly assigned board-level responsibility for deforestation consistently achieved higher overall benchmark scores than their peers.
Consumer staples companies in the UK Asset Owner climate physical risk engagement also told us that regulation (e.g. the EUDR) is often an opening for board-level conversations on forest-related issues. These discussions should be used as an opportunity to:
Educate the board on deforestation and other nature-related issues.
Explain the company’s exposure to forest-related risks (direct and through the supply chain).
Present the business case for acting on deforestation, quantifying forest-related risk in material terms.
Assign ownership of deforestation commitments and related policies to a named board committee member.
3. Manage Forest-Related Issues Cross Functionally
The effective management of forest-related issues relies on cross-functional collaboration and ownership. Organisations that engage their Research & Development, Legal, Procurement, Quality Assurance, Marketing and Communications teams and Sustainability Committees are often better able to embed requirements into day-to-day decision-making and achieve effective implementation.
Companies looking to take a cross-functional and integrated approach to forest-related risks and opportunities can start by:
Mapping supply chains and identifying where forest-related considerations may be relevant across existing sourcing and production processes, including during the pre-development, development and selection of new materials.
Identifying which business functions need visibility of this risk and implementing the systems needed to ensure this.
Building forest-related criteria into existing sourcing tools, such as supplier scorecards, risk assessments, quality checks and pre-nomination screening, rather than creating parallel tools owned by sustainability teams.
Piloting new tools with all relevant teams and stakeholders before implementation, for example through workshops and focus groups, building in time to gather and implement their feedback.
4. Build Supplier Relationships to Improve Traceability and Performance
Traceability remains one of the biggest barriers to achieving deforestation-free supply chains and EUDR compliance. While companies are increasingly relying on technologies such as AI, satellite imagery and blockchain to improve supply chain visibility, our experience suggests that the importance of supplier engagement and capacity building in improving traceability should not be underestimated.
A consistent lesson from our work is that traceability challenges often do not stem from poor supplier practices, but from gaps in their reporting capacity and technical expertise, and from uncertainty about data and evidence requirements. Companies that provide clear guidance and capacity-building are often better able to improve data quality, strengthen traceability and identify genuine risks. Strong supplier relationships improve data availability and risk identification processes, and can also help ensure the inclusion (rather than the exclusion) of smallholders who may require support to build data collection and reporting systems.
Companies can improve traceability by, for example, providing targeted training, technical support and guidance to help suppliers substantiate deforestation-free claims with robust monitoring and verification methodologies; and tailoring supplier guidance to local contexts, for example by providing it in multiple languages.
Moving From Commitments to Implementation
One of the clearest lessons from our work is that companies make the greatest progress when forest-related issues are treated as a business-wide challenge rather than solely as a supply chain or sustainability issue.
While certification can play an important role in responsible sourcing, it is not a substitute for clear commitments, robust definitions and effective implementation. Our experience shows that achieving this requires a combination of clear definitions, strong governance, cross-functional ownership and meaningful supplier engagement.
As expectations from regulators and investors continue to grow, companies that embed these approaches today will be better positioned to build resilient supply chains, manage nature-related risks and deliver on their commitments in practice.
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To learn more about our work on nature with companies, contact our Principal Consultant for Nature: Rebecca Drury (rebecca@chronossustainability.com)
References
Photo by Justus Menke
[1]A-Global-Earth-Economy-Model-to-Assess-Development-Policy-Pathways.pdf
[2]A-Global-Earth-Economy-Model-to-Assess-Development-Policy-Pathways.pdf
[3]Government steps up action to tackle illegal deforestation - GOV.UK
[4]Forest 500 data shows regulation is driving corporate action on deforestation – Global Canopy
[5]Uncovering_Financial_Implications_of_Deforestation_Report.pdf
[6] Gross deforestation is the total or aggregate loss of natural forest without any deductions for offsets, replanting, or regeneration.
[7] Net deforestation is the balance between forest loss (deforestation) and forest gain (regeneration, restoration, or new planting) over a specific time and geographic area.
