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How to prevent biodiversity loss through value chain tracking

Food production is the primary cause of global biodiversity loss (60-70%). At the same time, approximately one third of the food produced (1.3 billion tonnes) is wasted along the supply chain. Food waste increases pressure on agriculture and therefore drives biodiversity loss. Finding efficient ways to track value chains can reduce food waste.

Value chain

Technology is unlocking new opportunities for tracking value chains, enabling companies to fulfil their sustainability commitments and accurately disclose risks. The World Economic Forum and Accenture investigated emerging technology-driven techniques to solve value chain tracking and we explore two in this article.

Food production is the main driver for biodiversity loss

Biodiversity is important to agriculture. Even though farms are managed by humans, they are still ecosystems. The soil health depends on plant diversity, animals and other natural ecosystem services and functions. Plants provide habitats for insects that pollinate them, for example, while animals provide natural fertiliser to soils that in turn provide nutrients to plants, whose roots hold the soil in place, and so on. 

Agriculture and food production are the single largest source of employment in the world. With the human population expected to reach 10 billion by 2050, the demand on an already strained food system will increase. Farmers turn to intensified agriculture in order to produce more at low cost and this increases pressure on biodiversity. Industrial agriculture is a method of farming that prioritises consistency and productivity over biodiversity, leading to biodiversity loss and ecosystem degradation. It endangers vulnerable species, both in the vicinity and in wider areas.

The Food and Agricultural Organisation estimates that 75 percent of the world’s food currently comes from 12 plants and 5 animals that we raise on a wide scale. Of the 300,000 known edible plants, humans only consume up to 200 of which rice, maize and wheat contribute nearly 60 percent of calories obtained by humans from plants. This is driving farmers into monoculture and incentivises them to change wild land for intensive farming purposes.

Monoculture destroys biodiversity. Pesticides and herbicides kill competing species in the ecosystem while fertilisers and genetically engineered crops help farmers to produce more of the same crop per acre. Biodiversity loss affects the plants that rely on them and the impact spreads to other regions.

There are good reasons for focusing on one crop, such as a standard production system with uniformity along the process, high yields, and consistency in product quality and taste that is familiar to the customer. But one crop means the entire value chain is also vulnerable to a single crop disease. 

This is what happened with the banana. Before the 1950s there were several types of bananas, which where susceptible to the Panama disease that caused them to wilt. Farmers therefore turned to the Cavendish banana that was resistant to the disease and stayed green after harvest for weeks, making them perfect for export. Today, 99 percent of exported bananas are Cavendish – the golden yellow fruit. But a Tropical Race 4 (TR4) disease emerged in the 1990s and it threatens to wipe out the Cavendish worldwide.       

Climate change also affects biodiversity, even in areas where humans have not touched. It threatens the food and agriculture sector more than any other. Food systems are responsible for 25 percent of global greenhouse gas emissions, mainly from fertilisers and livestock. Agriculture, being a major contributor to climate change and most at risk from this global phenomenon, should be inspired to protect biodiversity as this has a two-pronged benefit for the industry. Are there technologies that can help the food production industry reduce biodiversity loss through monitoring value chains?

Food sensing technologies

Hyperspectral imaging analysis is a non-invasive food-sensing technique that can trace the food location and detect the quality and safety. It can also analyse moisture, protein and fat content, and able to upload that data in real-time. This feedback gives farmers and food processors important feedback to reduce food loss. In turn, minimal food loss means increased earnings for the farmers, lower prices for consumers and reduced pressure on agriculture, which minimises biodiversity loss. 

In China, 2015, fraudsters were caught smuggling 100,000 tonnes of expired meat in a “zombie meat” scandal. The smugglers ferried meat under unrefrigerated conditions and only froze it back in time to sell. Tracing can help businesses determine that their food is coming from accredited sustainable farms, ensure food safety and reduce food loss, all of which contribute to conserving biodiversity. 

Tracing also enables more accurate biodiversity disclosure as it eliminates most of the unknowns throughout the supply chain that make it difficult to report. By identifying the points in the supply chain where food loss is happening, efficiency along the value chain can be improved. Knowing the original source of the raw materials too enables corporates to make better calculations of the risks involved and plan strategically.

Blockchains enable traceability

Businesses, in general, do not know enough about the products they buy and sell to be safe, sustainable and ethical. Some companies simply do not want their transactional data open to all due to mistrust. Biodiversity, and its complex ecosystem relationships, also makes it difficult for companies to track and report impacts and risks. But tracing products to achieve efficiency and cost savings requires a level of trust and accountability within that data-sharing community. Blockchains offer security, transparency and trust to help make transactional data easier to share and promote responsible practice throughout the supply chain, since tampering can be tracked.

A blockchain is a shared immutable ledger that facilitates the process of recording transactions and tracking assets in a business network. Virtually anything of value can be tracked and traded on a blockchain network, reducing risk and cutting costs for all involved. The decentralised nature of blockchain databases is a key attribute to its success as multiple users across the globe hold exact copies of the same information, meaning that it is tamper-proof and at no risk to manipulation from a single entity. 

Brazil is one of the world’s largest producers of soy. It exports 60 percent of its harvested soybean crop with 75 percent of it going to China. But soy production in Brazil is the second largest contributor to deforestation after cattle ranching. In 2006 the government introduced an Amazon Soy Moratorium, which is a zero-deforestation agreement amongst civil society, industry and government that prohibits the growing of soy on recently deforested land.       

Blockchains offer an opportunity to change the food sector and reduce biodiversity loss. To stop purchasing of soy grown on lands deforested after July 2006, land mapping registration was mandated by the government through Forest Codes. A blockchain traceability solution could therefore help soy production manage risk and comply with regulations such as Forest Codes and Soy Moratorium. Given blockchain data is immutable, all parties can be assured when referencing the source of the product is not from illegally deforested land. 

Biodiversity Guidance

CDSB is developing a Framework application guidance for biodiversity-related disclosures (Biodiversity Guidance). With rapidly evolving reporting regulation worldwide, and mounting pressure from investors demanding decision-useful sustainability information now to move capital towards resilient businesses, companies require guidance on disclosing nature-related information with the same rigour as financial information. The Biodiversity Guidance is to support organisations in preparing high-quality disclosures that enable users of mainstream reports to assess material biodiversity-related financial information. 

The upcoming Biodiversity Guidance includes a checklist and comprehensive reporting could be achieved by employing some of the value chain tracking in food production. Analysing risks and opportunities, for example, companies are encouraged to explain the implications of material biodiversity-related risks and opportunities on business and value chains, specifying geographical locations, and time horizons in which the risks and opportunities will materialise. With blockchain tracing, corporates can easily determine the source of their raw materials and not only improve reporting but pave a clear path for strategic planning with reliable data at hand.

What are your thoughts? The Biodiversity Guidance is now open for public consultation and you can review it here.

View highlights of the upcoming Biodiversity Guidance from our briefing here.

Written by CDSB’s Enock Chinyenze, Senior Communications Executive (enock.chinyenze@cdsb.net) and Laura Clavey, Technical Manager (laura.clavey@cdsb.net).