Environment Bill

Written evidence submitted by WWF UK (EB13)

Environment Bill Public Committee Evidence

Global footprint, deforestation and mandatory due diligence

WWF is a core member of Greener UK and Wildlife and Countryside Link – this evidence is intended to supplement the Greener UK evidence which has been submitted to this Committee. WWF welcomes the Environment Bill as vital to set nature on the path to recovery. However, when considered as a whole, the Bill does not achieve what has been promised: gold standard legislation, showing global leadership for responding to the environmental crisis both at home and abroad and a world-leading watchdog

The UK must take responsibility for the impact of our environment footprint overseas . WWF are calling for the Environment Bill to include provisions to tackle the offshoring of our environmental impact , including a commitment to rid our supply chains of the deforestation which is currently being driven in some of the world’s most unique habitats. 

This will be the first step on the path to halving the environmental footprint of UK’s production and consumption by 2030, necessary if we are set nature on the path to recovery and meet our climate commitments.

Introduction

Our world is in the middle of a dangerous climate and biodiversity crisis. Rapid climate change is causing disruption and damage to infrastructure, impacting on water and food security, and threatens to trigger mass migration on an unprecedented scale. Globally, wildlife populations have decreased by an average of 60% since 1970 and the UK is now one of the most nature-depleted countries in the world. Our society and economy depend on natural capital from overseas as well as at home and UK trading relationships and supply chains have environmental impacts across the globe. 

 

In 2019, the UK, historically became the first G7 country to legislate for net zero emissions in line with the Paris Agreement which set the global agenda. The 2019 Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services’ (IPBES) Global Assessment Report warned that up to one million species are now at risk of extinction due to human activity – many within decades – and identified our inefficient food system as the single biggest threat to nature today. Nature-based solutions offer the best way to achieve human well-being, tackle climate change and protect our living planet and so we must tackle these challenges in tandem.

Both climate change and ecosystem damage are being driven by patterns of unsustainable development. In order to bend the curve on biodiversity loss we must halt the unprecedented loss of biodiversity, globally and put nature on a path to recovery for the benefit of all. This is achievable but only if we act now, and only if the UK plays a leadership role.

In 2020 the eyes of the world are firmly fixed on the UK's positioning in the world after Brexit. Success in Glasgow at COP26 will require both ambitious action at home and environmental leadership on the world stage. The Environment Bill is a once in a generation opportunity to set nature on the path to recovery and enshrine the UK's high environmental ambition in world-leading legislation.

The case of inclusion in the Environment Bill

As with the UK’s world leading Climate Change Act; with decisive domestic action in the UK, it can set an example for the world. With strong legal frameworks and prompt practical implementation, the UK has inspired international action before and can do so again. The government’s ambitious domestic legislative programme through this Bill provide opportunities to do just that.

WWF is calling for the Environment Act to include:

- a commitment from the government to develop a target for reducing our global footprint;

- a target to end all deforestation within our supply chains by 2020

- commitment to bring in legislation on due diligence, which would require business to assess environment and human rights risks to their global operations and impacts, develop a plan to address these and report on their progress in implementing the plan.

- an initial obligation for importers to undertake due diligence for deforestation and conversion, to ensure that the material they import is sustainable, capable of being traced back to source and does not cause adverse environmental and human rights risks.

Through ambitious comprehensive domestic legislation, backed up by a world-leading governance framework the UK can demonstrate best practice in landscape and seascape management, drive investment and trade supports nature’s recovery and position ourselves as an environmental superpower on the world stage.

If we want to reverse the trend of nature loss by 2030, we need urgent action in 2020. This year, governments, businesses and stakeholders at all levels must take steps to achieve or have implemented plans for sustainable production and consumption and have kept the impacts of use of natural resources well within safe ecological limits. With this Bill, we can set an example at the international moments, which other countries can follow. This will set nature on the path to recovery.

The Problem – The UK’s Global Footprint

Economic activity, driven by the UK, is a significa nt contributor to the destruction of nature , including in vital biome’s such as the Amazon. UK companies operate in, and source products and materials from all over the world, and they have a responsibility to uphold environmental standards wherever they operate. The effects of UK consumption on land use choices, energy consumption, waste and resource use around the globe are considerable. The Government recognised this in the 25-year environment plan (25 YEP).

Agriculture and the associated land use change is now responsible for roughly 73% of forest loss in tropical and sub-tropical regions [1] while also accounting for approximately 24% of global greenhouse gas emissions. Research commissioned by WWF and RSPB (Risky Business, 2017) shows that the UK – as the world’s fifth largest economy – is a major importer and consumer of seven key commodities closely associated with deforestation and social challenges: beef and leather; cocoa; palm oil; pulp and paper; rubber; soy; and timber. It shows that to supply the annual UK demand for these seven commodities alone requires a land area more than half the size of the UK, and that more than 40% of the UK’s overseas land footprint is in countries at high or very high risk of deforestation, weak governance and poor labour standards. 

In Brazil’s Cerrado alone there are 40 million hectares of already cleared land that would be ideal for soy production. Instead, 50% of the Cerrado has already been destroyed. Soy is the biggest deforestation risk crop commodity imported to the UK. In 2018, the UK directly imported approximately 2 million tonnes of soy - with over 75% of soy imported into the UK is used for animal feed – demanding the largest overseas footprint of any other crop imported to the UK [2] .

WWF will shortly be publishing Risky Business 2 – a refresh of our 2017 report, which will show that the UK’s global footprint is becoming greater.

The Business Case

Nature underpins our prosperity and wellbeing by providing economic value and security, supporting human development and equality, and increasing our resilience to climate change. WWF’s recently published Global Futures report warns of potential risks to the world’s economies, trade and industrial sectors if we don’t act urgently to halt nature loss. The study estimates that in the period between 2011 and 2050, the total cumulative loss, considering six of the many ecosystem services provided by nature, would be US$ 9.87 trillion. The UK will suffer some of the biggest financial losses - third behind only the United States and Japan - taking an annual hit to its economy of at least £16 billion by 2050 - the current combined annual funding for the police, fire service, prisons and law courts.

Furthermore, businesses rely on nature for resources such as food, fibre, minerals and building material; ecosystem services such as pollination of crops, water filtration, waste decomposition, climate sequestration and climate regulation; and healthy and prosperous societies that give them their customers and workforce.

The problem with current voluntary commitments for progressive businesses

For more than 10 years, leading businesses, including M&S, McDonald’s, Nestle, Tesco and Mondelez, have been committed to and working towards implementing ethical supply chain practices to better manage their global environmental footprint – particularly deforestation and habitat conversion. Much of this work has been carried out in line with multiple non-binding international treaties and commitments, such as the New York Declaration on Forests, Consumer Goods Forum and Tropical Forests Alliance. However, because commitments have been voluntary and non-binding, not one of the commitments set out on these international platforms is expected to be achieved.

There is a desire for a regulatory response from government to ensure a level playing field and allow UK businesses leaders to go further and faster. Progressive UK businesses have been attempting to respond to these various voluntary measures at some considerable cost – whereas the laggards remain free to carry on business as usual . Global Canopy’s 2019 Forest 500 report (which assessed 500 of the most influential global companies linked to forest commodity supply chains ) found that not one of the companies assessed – 130 of which are either based in or have significant operations in the UK – were on track to achieve their commitments – many of which were time-bound to 2020. Lack of regulation and consistency around monitoring, verification and reporting has been highlighted as a key factor in each company’s failure to achieve their commitment.

Furthermore, retailers and brands have highlighted that they struggle to motivate suppliers, who are not exposed to the same reputational risk as them, to act. A mandatory due diligence obligation would drive action by laggard companies and create the enabling conditions for all businesses in the supply chain deliver on their commitments. Additionally, due diligence would stop companies passing and spreading blame throughout the supply chain, making it easier to pinpoint and address the failure.

Engagement and support in tackling deforestation is apparent amongst business leaders. In October 2017 – following the publication of ‘Cerrado Manifesto’ which called for "immediate action in defence of the Cerrado by companies that purchase soy and meat from within the biome, as well as by investors active in these sectors." - 23 global companies including Marks & Spencer, Tesco, McDonald’s, Nando’s and Unilever launched the Statement of Support (SoS) . The SoS aimed to bolster the objectives defined in the Cerrado Manifesto (adoption of effective policies and commitments to eliminate deforestation and conversion of habitats) and committed to "working with local and international stakeholders to halt deforestation and native vegetation loss in the Cerrado". Tesco was one of the first companies to lend its support by contributing £10 million to a new initiative to support soy farmers in the Cerrado region of Brazil to protect native vegetation and transition to producing soy only on existing agricultural land.

However, due to contradicting narratives and support from national governments it has meant that this initiative is currently failing to progress any further. This lack of consistency between supply chain actors and national governments is now threatening the prosperity of successful initiatives, such as the Soy Moratorium – a 2006 agreement between environmental groups and large agricultural corporations to avoid the purchasing of soy produced on land deforested after July of that year.

Last month, 5 large key UK food businesses recently signed a private joint letter to Number 10, which called on the UK Government to step up and lead the way and act urgently to tackle the UK’s global footprint through a mandatory due diligence obligation in the Environment Bill. The letter highlighted that as leading UK Businesses, they have a commercial interest to ensure that their supply chains aren’t destroying the planet.

The v oluntary commitments and action that have been made over the last decade demonstrat e that leading business es understand:

· the risks of the degradation of nature to their business continuity;

· how proactive action to address the risks can lead to business benefits including supply chain resilience to flood and drought, improved relationships with local communities and in many instances lower operating costs.

Overall, despite noteworthy efforts by leading businesses, addressing deforestation in supply chains is still a voluntary action. Unless there is pressure from governments, leading businesses are powerless to implement the necessary changes needed to end global deforestation and habitat destruction for good and not simply relocate it from one landscape to another.

The Global Resource Initiative (GRI)

WWF welcomed the Government’s commitment to act on our environmental footprint in the 25YEP, and it was ground-breaking for an advanced economy to set up the independent GRI to review how to tackle this. The GRI is likely to propose, as part of its recommendations, the need for legislative reform to take mandatory action to ensure business clean up their supply chains, particularly in areas where the UK consumption of commodities is directly causing the destruction of the world’s forests, such as the Amazon.

WWF have been an active partner of the GRI which is currently considering actions the UK can take to green its international supply chains and leave a lighter footprint on the global environment – and will make recommendations later this month. This model could be scaled up into a multilateral initiative enabling countries to work together collaboratively to address these issues with the COP’s later this year a moment to champion this ambition as part of the UK’s foreign policy strategy.

With the Environment Bill, the UK government has a unique opportunity to respond to these recommendations, improve the Bill ahead of COP26 and lead the world on this issue. By putting commitments to deforestation free supply chains in the 25 YEP, the government showed great ambition and leadership on this issue as the Bill is timely

Case study: Tesco/WWF Partnership

Tesco is an example of a food business leading in this area. WWF and Tesco have entered into a partnership with the ambition off making affordable, healthy, sustainable food available to everyone. The partnership has the goal of halving the environmental impact of the average shopping basket and therefore demonstrates action that can be taken by a food business to reduce its global footprint.

The partnership covers r estoring nature in food production: supporting a thriving farming sector that produces the food we need whilst protecting the natural resources it depends on. Under the partnership we are working together to deliver improved agricultural practices across Tesco’s supply chain, eliminate deforestation from imported products like palm oil, soy, timber and cattle, and to reach a 100% sustainable seafood range . In order to meet the halving impact objective there is a need to better understand and track the entire ‘food value chain’, from food production (farming, fishing and manufacturing) and food delivery (transportation, packaging and stores), right through to food consumption (food waste and dietary choice).

If we lose just 5% more of the Amazon, we lose the fight against climate change. WWF would welcome the opportunity to speak to the Committee to discuss how a relatively simple change in the Bill, now, could have a huge impact on the future of our planet, global biodiversity and our global effort to achieve a 1.5-degree pathway.

Appendix

Explanatory notes to accompany global footprint amendments to the Environment Bill (tabled by Kerry McCarthy MP)

Clause 1, page 1, line 17, at end insert-

"(e) global footprint."

In clause 1, page 2, line 16 at end insert –

(10) Without prejudice to subsection (6), the global footprint target is required to be met with regard to ecosystem conversion and degradation, and to deforestation and forest degradation, by 31 December 2020".

To Move the following New Clause-

"Environmental and human rights due diligence: duty to publish draft legislation

1. The Secretary of State must, within the period of six months beginning with the day on which this Act is passed, publish a draft Bill on mandatory environmental and human rights due diligence which imposes a duty on specified commercial, financial and public sector persons to-

a. carry out due diligence in relation to all environmental and human rights risks and impacts associated with the exercise of their functions, and

b. identify, assess, prevent, or mitigate (where prevention is not possible) the risks so that the impacts are negligible.

2. The objective of the due diligence provided for pursuant to subsection (1) is to ensure that the target set pursuant to sub-paragraph (e) of section 1(3) is met.

3. The due diligence must be undertaken by specified persons in relation to –

(a) risks and impacts wherever they arise

(b) the entire supply chain and investment chain of the person specified.

4. In order to address, in particular, ecosystem conversion and degradation and deforestation and forest degradation ("deforestation and conversion") the draft Bill must ensure that all goods placed on the UK market are -

a. sustainable;

b. traceable back to source through fully transparent supply chains; and

c. do not cause adverse environmental and human rights impacts including deforestation and conversion. 

5. The due diligence required to be carried out in accordance with subsection (1) by providers of financial services must include (but not be limited to) the risk of deforestation and conversion which may arise from or be enabled by the provision of the financial services.

6. The provisions of the draft Bill relating to due diligence must require compliance with international standards and obligations relating to human rights, including the rights of indigenous peoples and local communities. 

7. The draft Bill must-

a. establish or designate a body to oversee implementation of and compliance with the provisions of the Bill;

b. provide proportionate, effective and deterrent sanctions for entities failing to comply fully and promptly with their duties under the Bill; 

c. provide for an independent, transparent and public complaints mechanism;

d. establish a system which ensures effective and appropriate redress for any person affected by environmental impacts and human rights violations;

e. require persons to report publicly on –

i.their plans for due diligence

ii.the implementation of their plans and

iii.the action taken to comply with their plans including the effectiveness of the action.

f. require the regulatory body or other appropriate institution to undertake periodic and public audits of the effectiveness of the due diligence requirements, focusing on specified persons, sectors or supply chains; and

g. require the Secretary of State to include in the annual report on environmental improvement plans an assessment of the application of the duties imposed in accordance with subsection (1), and to review the effectiveness of those duties after 3 years (including by commissioning an independent assessment).".

Clause 44, page 27, line 24, at end insert-

"global footprint" means-

(a) direct and indirect environmental harm, caused by, and

(b) human rights violations arising in connection with,

the production, transportation or other handling of goods which are imported, manufactured, processed, or sold (whether for the production of other goods or otherwise), including but not limited to direct and indirect harm associated with-

(i) greenhouse gas emissions;

(ii) ecosystem conversion and degradation;

(iii) deforestation and forest degradation;

(iv) biodiversity loss;

(v) water pollution and abstraction; and

(vi) air pollution.".

Explanatory notes

These amendments consist of:

· new global footprint target;

· deadline for deforestation target;

· duty on ministers to public new primary legislation setting out a due diligence obligation.

As set out above, it is vitally important that the government sets a global footprint target urgently to limit the overseas impact of our consumption and production. Further, HMG will struggle to meet its wider environmental obligations (eg: on climate change) without such a target.

The first amendment adds the term "global footprint" to the list of priority targets in clause 1(3) so as to ensure that the Secretary of State must set a global footprint target as a priority area alongside air quality, biodiversity, water and resource efficiency / waste.

Although it might be argued that ministers already have the power to set a Global Footprint target under clause 1 of the Bill, our concern is one of timing. Given it’s not a priority area, there is no assurance (on the face of the Bill at least) that the target would be set with the other priority areas ie: sufficiently quickly. Hence an amendment is required. The date for achieving the global footprint target should be 2025 rather than 2037 as proposed for the other priority targets.

The second amendment specifies a target date to ensure that the deforestation and conversion component of the global footprint target is met by 31 December 2020. The deadline is short both because of the urgency of the environmental impacts and because business and government have longstanding commitments to eradicate these impacts from UK supply chains (see for example Consumer Goods Forum (2010) and New York and Amsterdam Declarations (2014 and 15). These commitments have not been met. (Clearly it would be necessary to specify what the deforestation target should look like and further briefing (and draft wording) can be provided on this point as necessary).

The third amendment requires ministers to publish a Bill setting out a full due diligence obligation for business (including banks etc) and certain public sector bodies to assess the environmental and human rights impacts which their activities give rise to.

Finance has been included as the financial sector is one of the largest UK sectors exposed to agribusiness and deforestation-risk industries. A recent Global Witness report found that the UK was the single-largest provider of credit from 2013-2019 to six of the worst agribusiness companies linked to deforestation. Excluding finance would therefore present a key gap.

So far as deforestation and conversion are concerned, the obligation to undertake due diligence is imposed on importers to ensure that the material they import is sustainable, capable of being traced back to source and does not cause adverse environmental and human rights risks. This is broadly in line with the approach adopted by the existing EU Timber Regulation.

The due diligence required to be carried out in relation to other global footprint and human rights impacts lies with businesses (and certain public bodies) to be specified in the primary legislation to follow. We would expect a larger group of bodies to be caught who will be required to look across their supply chains at impacts. This is necessary because the importer focussed approach is less likely to be effective in relation to impacts other than forests and grasslands (eg: water). In addition, an importer focussed due diligence obligation would only cover international supply chains and would not drive action to address environmental risks and impact in domestic supply chains.

The amendment ensures that the Bill must provide for an effective enforcement mechanism; redress for third parties; and due diligence plans to be published by business.

A duty on ministers to publish a draft Bill is contained in section 16 of the EU Withdrawal Act 2018 and is what led to the current Environment Bill before the House.

The fourth amendment sets out some of the key elements of the global footprint target.

March 2020