Deforestation & Land Use Change Position

BACKGROUND

Current Situation

Forests and other natural ecosystems are essential for a healthy environment and productive supply chains; they provide critical habitats, biodiversity benefits, support livelihoods, and are an important carbon sink. Mars and other companies have taken significant action in recent years to try to stop deforestation and create solutions in key supply chains. While these efforts have led to some progress, the challenge of deforestation, forest degradation, and conversion remains. Forest area has continued to decline globally in the last several years, and conversion for agriculture is a key driver. In fact, according to Global Forest Watch data, 2016, 2017, and 2018 were the three highest years on record for tropical forest area loss. What’s more, recent scientific reports have made it clear that protecting and restoring natural ecosystems is an integral part of addressing climate change and limiting global temperature rise to 1.5°C.

Mars recognizes the continuing challenge associated with supply chain-driven deforestation and the slow progress over the last several years. Recent corporate action to reduce deforestation in supply chains through increasing traceability and certification is a critical step in the effort, but these actions alone are not sufficient to achieve the end goal of eliminating supply chain-driven deforestation. Companies must engage suppliers and other stakeholders to deploy sufficient monitoring and verification of their supply chains to ensure that deforestation is not occurring and put in place plans for addressing and rectifying situations where deforestation occurs. Ultimately, to adequately stop deforestation, companies, governments and civil society need to work together to address underlying deforestation drivers and ramp up action through a number of levers including supply and demand signals, market and policy mechanisms, and increasing productivity on existing agricultural land.

Our Ambition

Mars is accelerating our efforts to stop deforestation and conversion of natural ecosystems in Mars supply chains identified as most at risk for driving deforestation: beef, cocoa, palm oil, pulp and paper, and soy. We will achieve this by only sourcing these raw materials, across our business, from suppliers that demonstrate compliance with Mars’ deforestation-free principles, within the timeframe and details specified in the following raw material action plans:

Our position on deforestation is informed by Mars’ global Human Rights Policy and Supplier Code of Conduct. Additionally, this position is inextricably linked with Mars’ positions on four interrelated issues:

Mars’ Deforestation-free Principles

In line with the Accountability Framework, Mars outlines the following expectations for our suppliers. Mars’ position defines deforestation and conversion as: the conversion of natural forests and other natural ecosystems to agriculture, tree plantations, livestock production, or other land uses, as well as severe or sustained degradation. Natural ecosystems differ across geographies and could include savannahs, natural scrublands, peatlands, wetlands, and natural grasslands.

Mars expects suppliers to meet the following guidelines to stop deforestation from a specified cut-off date:

Everything supplied to Mars is from legal sources
No deforestation or conversion of primary forest or natural ecosystems of high conservation value (HCV)
No development in high carbon stock (HCS) areas
No development on peatlands
No clearance of land by burning to prepare it for production
Work within credible, landscape-level frameworks where these exist
Provide supply chain transparency

Mars also expects suppliers to:

Support existing human rights commitments including respect for farmers’ and communities’ land rights, free prior and informed consent, and the rights of indigenous and forest-dependent people
Resolve land rights disputes through a balanced and transparent dispute resolution process
Support farmers and plantation owners to comply with Mars’ deforestation-related requirements
Where relevant, support enhanced agroforestry, reforestation or restoration of natural ecosystems

Mars’ Long-term Vision and Theory of Change

Mars’ long-term vision is to expand our influence beyond just the supply that we use, so that our suppliers prevent deforestation and land conversion throughout their full business. There is no time to lose. Ensuring a deforestation-free supply chain for a discrete corporate “buyer” is a positive step, but we aren’t satisfied if our suppliers continue to contribute to deforestation elsewhere in their businesses.

Companies need to draw on their influence to help reach a tipping point as soon as possible for industry-wide transformation towards deforestation-free supply chains. This transformation is a multistage journey, that begins with working with suppliers to ensure that what they supply to Mars is deforestation-free and leads to a supply pool in which a supplier’s total business is deforestation-free (Figure 1). Ultimately, when a groundswell of suppliers has achieved this goal, remaining suppliers feel increased pressure and a clearer pathway to prevent deforestation across their business, bringing the effort to scale until entire commodity supply chains are deforestation-free.

This theory of change necessitates that companies engage other stakeholders, such as national and local governments, civil society, and others, to collaborate and ramp up action on key levers such as pro-forest policy and enforcement, consumer demand for forest-friendly products, and finance and market signals. Collective action by all relevant stakeholders is critical for achieving transformational change.

Figure 1: Long-term vision for deforestation prevention

Our Actions

Mars analyzes deforestation risk across our extended global supply chain, and we are working to stop deforestation and degradation in five Mars raw materials identified as having the greatest risks for driving deforestation: beef, cocoa, palm oil, pulp and paper, and soy. These raw materials make up more than 50 percent of Mars’ land use area and more than 87 percent of Mars’ land use change greenhouse gas (GHG) emissions. This position applies to Mars’ entire supply chain of these raw materials. For these materials, Mars has committed to stop deforestation and conversion in our supply chains by using our influence to advance responsible supply chain management and, where appropriate, on-the-ground landscape approaches. (See Figure 3 for more details.)

Supply Chain Management

Supply chain management involves engaging the supply chain, from producers through traders and buyers, to align on sourcing guidelines. How this works in practice differs by raw material supply chain (see the raw material action plans for details). Our work is guided by five technical criteria (Figure 2):

We have invested significantly in providing greater traceability and transparency on each of the five raw material supply chains mentioned above to better identify and define deforestation and conversion risks, and we have published lists of our suppliers and sourcing origins, which we will update over time.
We are working to specify our deforestation-free requirements to our suppliers, utilizing certifications where they align with our requirements and elaborating more detailed specifications and sharing best practices where needed. We have already outlined these requirements to our palm oil and cocoa suppliers and are developing specifications for other supply chains. And for pulp and paper, we are maximizing the use of recycled fiber first, and where we use virgin fiber, we are committed to trusted forest management certification or verification.
We are making strategic choices on how best to modify our supply chains, considering the risks and drivers of deforestation and conversion to help inform our sourcing decisions. For example, in some cases we have identified opportunities to simplify and consolidate our supply chain in order to increase the effectiveness of monitoring and work only with suppliers that align with our requirements
We are putting in place robust monitoring processes to verify suppliers’ compliance with Mars’ requirements. In some cases, such as with palm oil, sector-wide satellite-based monitoring systems are being established by external organizations to be used by all companies in the supply chain. In other cases, Mars is working with suppliers to establish our own monitoring platforms.
We are establishing processes for rectifying instances of deforestation in our supply chains by engaging, suspending or removing suppliers that do not come back into compliance after we notify them that they aren’t meeting Mars’ deforestation-free requirements. We are also considering what role reforestation or restoration might play in contributing to deforestation solutions.

Figure 2: Supply Chain Management criteria

Landscape approaches

Integrated landscape approaches are a critical complement to supply chain management to achieve a deforestation-free transformation, especially in the most critically threatened or highest conservation value landscapes. Mars is deeply engaged with initiatives such as the Consumer Goods Forum and Tropical Forest Alliance to catalyze collective action in support of landscape approaches. These initiatives involve collaboration among multiple stakeholders in the landscape and integration of ad hoc initiatives on the ground that are addressing deforestation or landscape restoration.

While landscape approaches for addressing deforestation are still nascent, Mars is engaging in several promising pilot efforts. In cocoa, Mars is engaging with partners such as ProForest and Verra to pilot jurisdictional approaches in Ghana, Cameroon and other countries. In palm oil, Mars is partnering with Conservation International and other organizations on the Coalition for Sustainable Livelihoods to support smallholders and sound natural resource management in Aceh and North Sumatra, Indonesia. Mars partnered with Earthworm in Aceh, Indonesia to reduce deforestation and demonstrate balancing commodity production, conservation and good social and labor practices at scale. Mars is also working with Earthworm on stopping ecosystem degradation in pulp and paper production landscapes, including Northwest Russia and British Columbia. Mars also supports landscape-level initiatives, such as the Cerrado Manifesto, which engages companies to halt soy-driven deforestation and promote sustainable land management in the Cerrado grasslands in Brazil. Through these efforts, we’re engaging local government, addressing deforestation, planning with communities, and supporting farmer livelihoods.

Figure 3: Status of Mars action to address deforestation (*by the end of listed commitment year)

Key Performance Indicators

Mars’ Sustainable in a Generation plan goals to cut GHG emissions across our value chain 67% by 2050 and hold the land use in our supply chain flat reinforce our Deforestation Position. As part of Mars’ Climate Action target, we include land use change GHG emissions as a key performance indicator (KPI) to measure both our progress to reduce our carbon footprint and to address the causes of deforestation. We use a land use change accounting methodology developed with Quantis to assign an emissions value to the deforestation and conversion in our supply chain. This helps us better understand the magnitude of this impact compared with other GHG emissions sources and measure our efforts to address this source. Another important KPI that we deploy in our effort to address land use change is the area of land under cultivation to produce the raw materials we source. Working toward our goal to hold the land area flat in our value chain highlights the importance of increasing productivity of crops so that more can be grown on less land, thereby reducing pressure on natural landscapes.

What’s Next

As Mars implements our deforestation-related commitments with suppliers and partners, we will continue to refine and expand our approach. We will collaborate with peer companies, suppliers and technical partners to improve data and methodologies, and apply the best available science to our strategies. We will engage with policy makers to support robust and ambitious deforestation policies that are enforced. We’ll continue to make strong linkages among all of our sustainability positions, including between this deforestation position and our climate and land use positions and will explore intersecting areas such as nature-based solutions, soil health, and indirect land-use change. We will explore opportunities for investing in reforestation, forest and other landscape restoration, and integrated agricultural systems to capture carbon and build healthy forest and land ecosystems for the future.

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