New “Soft Commodities Compact” supports global efforts to end deforestation

4 April 2014 News

“The Soft Commodities Compact demonstrates a great awareness of, and commitment to, sustainability within the banking sector and offers a huge potential to help transform the way commodities such as palm oil, soy and timber are produced and processed.” 

The words of Ben Gunneberg, PEFC Secretary General, welcoming the ‘Soft Commodities’ Compact, which was launched earlier this week by the Banking Environment Initiative (BEI) and the Consumer Goods Forum (CGF). “Importantly, it will support our efforts to mainstream sustainable forest management through forest certification”.

In 2010, the CGF Board of Directors committed their 400 members, with a combined procurement power of over $3 trillion, to achieving zero net deforestation in their supply chains by 2020. The ‘Soft Commodities’ Compact is the result of two years of extensive collaboration between the BEI and the CGF, with advice from the World Wildlife Fund (WWF), to establish how to align the banking industry with this goal.

The Compact includes a commitment for banks, where needed, to raise the standards they expect of certain clients in high risk geographies so that they are encouraged to improve their sustainability performance in line with CGF expectations through to 2020. To achieve this, Compact banks will confirm that customer operations have achieved the same internationally recognized means of verification that the CGF is prioritizing. For timber products, the starting point includes forest certification systems such as PEFC.

“The release of the Compact, together with the CGF guidelines and the WBCSD leadership statement, are visible signs of a broad trend that industry globally is embracing voluntary sustainability certification systems such as PEFC as evidence for the responsible production of soft commodities,” highlighted Mr. Gunneberg. “It underlines the broad acceptance of the PEFC’s work and demonstrates to forest owners and forest-processing companies alike the value that PEFC certification provides.”

The BEI currently counts ten international banks as members, headquartered across Asia, Europe and North America: Barclays, BNY Mellon, China Construction Bank, Deutsche Bank, Lloyds Banking Group, Nomura, Northern Trust, Santander, Sumitomo Mitsui Banking Corporation and Westpac.

A range of BEI and non-BEI banks have been involved in developing the ‘Soft Commodities’ Compact and the CGF and BEI are actively encouraging all international and regional banks to join these first movers. Six banks have confirmed that they will each adopt the ‘Soft commodities’ Compact, including Barclays, BNP Paribas, Deutsche Bank, Lloyds Banking Group, RBS and Westpac.

“We are fully supportive of the efforts by CGF and BEI and are looking forward to collaborating to encourage further uptake of the Compact within the banking sector”, emphasized Mr. Gunneberg. “It is these types of initiatives that greatly contribute to an increased demand for sustainability certification, thereby supporting our work in in promoting sustainable forest management.”