Walmart and Biodiversity Conservation (Part 2 of 2): Zero Net Deforestation

April 6, 2020 By Mark Aspelin

“Our world is increasingly transparent and we’re out to earn trust. When people shine a light on Walmart and see our decisions – the jobs we create, the activities in our supply chain – we want them to like what they see.”
—Doug McMillon, CEO of Walmart

To continue our discussion from last week’s post about Walmart’s approach to biodiversity conservation, today we’ll focus on Walmart’s goal of Zero Net Deforestation.

To determine how to tackle this goal, Walmart first reviewed studies and learned that certain agricultural commodities, such as palm oil, soy, cattle, and timber, were driving most deforestation in the world, so that’s where the company decided to focus its attention. Walmart then sought to address the major drivers of deforestation in its operation and supply chain for each of these commodities, which we’ll highlight below.

Palm oil. In 2010, Walmart set a goal to sustainably source any palm oil that is used in its global private-brand products. The company also encourages its national-brand suppliers to source palm oil from sustainable sources. By the end of 2015, 100% of Walmart’s private-brand palm oil was sourced sustainably in accordance with the certification standards of the Roundtable on Sustainable Palm Oil (RSPO), which included the use of the following supply chain models: Mass Balance, Segregated, Identity Preserved, and Credits. In 2017, Walmart decided to adopt a more rigorous approach of only using the RSPO criteria of Mass Balance or Segregated supply chain systems, or equivalent standards, by the end of 2020.

What the heck does all of that mean? Here are the RSPO definitions that should help make things a bit clearer:

  • Identity Preserved Supply Chain Model: Sustainable palm oil from a single identifiable certified source is kept separately from ordinary palm oil throughout supply chain.
  • Segregated Supply Chain Model: Sustainable palm oil from different certified sources is kept separate from ordinary palm oil throughout supply chain.
  • Mass Balance Supply Chain Model: Sustainable palm oil from certified sources is mixed with ordinary palm oil throughout supply chain.
  • RSPO Credits / Book & Claim Supply Chain Model: The supply chain is not monitored for the presence of sustainable palm oil. Manufacturers and retailers can buy Credits from RSPO-certified growers, crushers and independent smallholders. RSPO’s traceability system for certified palm products is called PalmTrace.

As reported in its 2019 Environmental, Social & Governance Report, the breakdown of Walmart’s Palm Oil supply chain models is as follows:

  • RSPO Identity Preserved: 0.02%
  • RSPO segregated or equivalent: 12.87%
  • RSPO Mass Balance: 47.38%
  • Palmtrace Credits: 39.72%

In other words, Walmart has some work to do in order to transition away from the use of Palmtrace Credits (~40% of its supply chain methodology in calendar year 2018) in order to accomplish its revised 2017 goal. As result, Walmart is now looking for ways to move towards sources of certified, sustainable palm oil that have been physically verified. The company is also determining how it can best support an industry-wide movement as the industry transitions to 100% traceability for sources of palm oil.

Beef. In 2016, Walmart achieved its goal to only source “sustainable beef” that is not associated with deforestation of the Amazon rainforest by getting 100% of its Brazilian beef suppliers to participate in Walmart’s Beef Risk Monitoring System. To monitor its supply of beef, Walmart created a geospatial monitoring system that tracks suppliers, volumes, and over 75,000 registered farm locations, and the data are combined with maps that show where deforestation is taking place. The tool then analyzes Walmart orders to ensure that no beef comes from deforested areas. Beef suppliers are trained to manage geographical information at their slaughterhouses and input the coordinates of their suppliers’ farms into the system. The company is now working to expand the program to include cow-calf operations to address the risk that cattle might be traded from high-risk ranches to approved ranches, and the risk that ranchers who contribute to deforestation may re-register their operations under different names. As the program expands, other sensitive biomes outside of the Amazon will be included, such as the Cerrado tropical savanna ecoregion of Brazil.

Soy. Walmart is working with its supply chain and the Consumer Goods Forum to acquire soy through deforestation-free channels. Walmart supports an indefinite extension for the Soy Moratorium in the Amazon region of Brazil, which has helped reduce the amount of Brazilian soy that comes from deforested areas from 30% to 1%. The company also supports the expansion of the Soy Moratorium to other parts of Brazil where a similar approach is needed.

Pulp and paper products. To address deforestation through logging for timber, Walmart is working to reduce packaging materials and ensure that pulp and paper products are purchased from sustainable sources. The company set a goal of zero-net deforestation associated with its private brand products and is encouraging its national-brand suppliers to set similar goals. Walmart uses a Sustainability Index to measure and track supplier performance based on the percentage of virgin fiber. For the calendar year 2018, the percentage of private-brand pulp and paper volume certified by the Forest
Stewardship Council, Programme for the Endorsement of Forest
Certification, Sustainable Forestry Initiative, or is using recycled content, was reported to be 91%.

To help promote transparency and traceability across its supply chains, in 2017, Walmart joined the World Resources Institute and 20 other companies to launch Global Forest Watch Pro. Global Forest Watch Pro is an online platform that provides companies, banks and other stakeholders with data and tools for monitoring global forest loss due to the production of key commodities such as palm oil, soy and Brazilian beef. The online platform’s algorithms leverage the use of cutting-edge satellite technology and cloud computing to provide real-time information about where and how forests are changing around the world.

I hope you enjoyed this two-part overview of Walmart’s approach to biodiversity conservation. I’ll be back next week with a new topic or case study that highlights the role of corporations in protecting our planet’s biodiversity.

Thanks for reading!

Mark

How Businesses Can Help Make Half-Earth A Reality: Alleviating Habitat Destruction

September 17, 2018 By Mark Aspelin

Part 2 of a 5-part series that is published on the E.O. Wilson Biodiversity Foundation and Half-Earth Project website at www.half-earthproject.org/news-notes

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How Businesses Can Help Make Half-Earth a Reality: Alleviating Habitat Destruction

by Mark AspelinPart 2 of a 5-part series

Habitat destruction is the #1 issue that impacts wildlife and biodiversity today.  The term “habitat destruction” can refer to the complete destruction of a habitat or, more commonly, habitat fragmentation, where a large, continuous area of a habitat is divided into two or more fragments. The primary culprit behind habitat destruction is a change in land use. The most common forms include clearing land for agricultural use, extractive industries like logging or mining, and expanding urban or residential development.

There are five common strategies that corporations use to combat habitat destruction, four of which we will cover here: avoidance; minimization; rehabilitation and restoration; and biodiversity offsets and voluntary compensatory actions. The fifth major strategy—supply chain management—we’ll cover later in this 5-part series.

The first—and best—strategy that companies can adopt to address habitat destruction and biodiversity loss is a simple one: avoid any development or operations in areas identified as important habitat for species that are classified as endangered, threatened or vulnerable to extinction; or areas that have been identified as critical for the conservation of biodiversity because of existing species richness.

On land that is not categorized as an avoidance zone, corporations shift their attention towards minimization strategies that reduce the duration, intensity and extent of their impacts for biodiversity and wildlife. Minimization strategies can take a wide variety of forms, including site selection strategies, operational policies and procedures, wildlife corridors and green roofs. For example, to transport material and facilities needed for a project located near the fragile Tibetan plateau of the Sanjiangyuan National Nature Reserve, workers from the State Grid Corporation of China used an “Electricity Caravan” of horses rather than build roads or bridges in this ecologically sensitive area. In another example, companies such as Facebook, Macy’s, and Ford have installed green roofs, which not only save money, but also provide habitat for a variety of insects and birds.

In situa­tions where avoidance and minimization are not practical or feasible, companies may turn to a third strategy: rehabilitation and restoration. With this strategy, a company attempts to rehabilitate degraded ecosystems or restore cleared ecosys­tems in areas that have previously been cleared, developed or neglected. In another example from China, The China National Petroleum Corporation (CNPC) pursued an ecological restoration effort as part of its Western Pipeline project. As soon as the new pipes were laid down and buried, CNPC planted vegetation to restore the original landscape and followed up with annual monitoring and remediation measures.

If avoidance, minimization and restoration strategies aren’t viable options, then companies may pursue a fourth strategy: biodiversity offsets and voluntary compensatory actions. A well-known example of a voluntary compensatory action is Walmart’s Acres for America Program, which has a goal to conserve one acre of wildlife habitat for every acre of land developed by Walmart stores.

So where does the Half-Earth Project fit in? The Half-Earth Project is creating a global map of fine resolution species distribution that will provide companies, such as Walmart, a unique tool for decision-making in support of biodiversity. The Half-Earth Map can be used to see where various species groups have rich or rare populations, so that companies can avoid development in these special places. The Half-Earth Map can also be used to identify the places that offer the best opportunity to offset biodiversity impacts through conservation management of land that is particularly rich in biodiversity. This tool can guide and ensure that conservation investments are happening in the optimal places for biodiversity while also showcasing the biodiversity value that these kinds of investments can bring to these places.

That wraps up our whirlwind tour of how corporations can address the biodiversity threat of habitat destruction, and how the Half-Earth Project can help corporations make sound decisions that are good for business and good for biodiversity.

In next week’s post, we’ll turn our attention to the #2 threat to biodiversity: invasive species. See you then!

Habitat Fragmentation Edge Effects: When Having an Edge is Not a Good Thing

August 6, 2018 By Mark Aspelin

The following is a longer version of an article that was published on GreenBiz on 8/13/18: https://www.greenbiz.com/article/when-it-comes-habitat-having-edge-not-good-thing

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We usually think it’s great when we have an edge, but that’s certainly not the case when we’re talking about habitat fragmentation edge effects and their impact on biodiversity and wildlife.  In this post we’ll explore the topic of edge effects and how it relates to business and biology.

Habitat destruction is the #1 issue that impacts wildlife and biodiversity today.  This fact shouldn’t come as much of a surprise.  When we think of all the roads, power lines, buildings, clearcutting, and other development activities taking place all over the world, we can quickly get a sense of the widespread reality of this issue.

The World Wildlife Fund estimates that forests cover about 31% of the land area on Earth and, for a variety of reasons, we’re losing about 46,000 to 58,000 square miles of forest each year – roughly equivalent to losing 48 football fields every minute.  In the Amazon alone, we’ve lost about 17% of the forest over the past 50 years, mostly due to forest conversion for cattle ranching.  Habitat destruction is clearly a big issue, and it won’t be going away anytime soon.

The term “habitat destruction” can refer to the complete destruction of a habitat or, more commonly, habitat fragmentation, where a large, continuous area of a habitat is divided into two or more fragments.  The primary culprit behind habitat loss, degradation, and fragmentation is a change in land use, usually in the form of agriculture, logging, mining, and urban or residential development.  

There are three important conditions that characterize habitat fragmentation: smaller habitat, increased edge effects, and increased isolation.  Today, we’ll focus on the second characteristic – edge effects, which refers to the effect of an abrupt transition between two different, adjoining ecological communities.

We can see examples of edge effects occurring naturally all over the place.  These natural edges, such as the forest and meadow pictured below, can lead to greater biodiversity in the area.

However, the edge effects that I’m focusing on in this post are man-made edges that are created in the middle of an existing natural habitat.  From a business perspective, habitats are commonly fragmented by the construction of roads, power lines, and buildings, or the clearing of land for agriculture and forestry.

In the context of habitat fragmentation, edge effects increase the proportion of habitat edges in relation to the total area.  In other words, any given point within the fragment of land is, on average, closer to an edge.  Why does that matter?  Edges matter because they create changes in the species composition for a given chunk of land.  These species-composition changes found at edges are caused by the following conditions:

  • Edges of a forest have microclimatic changes that impact the types of vegetation that can grow there.  These microclimatic changes include more direct sunlight, higher soil temperatures, differences in humidity and depth of humus, and increased wind exposure and snow loads compared with the interior of a forest.  The seeds of some plant species are sensitive to drying out with increased sun and wind, leading to significant differences in the types of vegetation found at a forest edge compared with the forest interior.  To make matters worse, these species alterations extend into the forest interior.  In some tropical rain forests, vegetation changes have been detected as far as nearly 1,500 feet from the edge.  In the scenario where we have a small fragment of a natural habitat or a narrow corridor of land, the microclimatic changes associated with the edges can permeate throughout the entire piece of a habitat.  The result may be a decrease in the presence of rare and sensitive species, while weedy species and generalist predators may thrive.
  • Edges are suitable for some species but unsuitable for others.  If we build a road through a forest, some plant species will thrive with the extra sunlight, and some bird species will enjoy perches next to these open areas where they can pounce on exposed prey.  “Edge species” such as deer and elk like forest edges because they can find food in open areas and take cover in the forest.  Other species of animals will actively shy away from areas of increased sunlight and exposure, moving further into the interior habitat where the characteristics of land remain unchanged.  For example, spotted owls (pictured below) prefer old-growth, mature forests with a lot of canopy and few edges.  When we push these species into the now-smaller interior habitat, we are likely to see increased competition for limited resources.
  • Edge-tolerant species are often generalist predators and exotic species that outcompete native species and habitat specialists.  Examples of edge-loving species include brown-headed cowbirds, crows, raccoons, and opossums.  These species thrive in an edge habitat and act as nest predators and cavity competitors of interior species, which can decrease the populations of forest songbirds, ground-nesting birds, reptiles, and amphibians in the remaining habitat fragments.
  • Edges become areas with increased noise, light, pollution, human recreation, and roadkill.  The increased noise, light, and human activity may cause some species to move further inland, away from habitat edges. Traffic on adjacent roads can cause pollution in the form of nitrogen deposition, and the increase in noise and light can deter or disorient animals.  Roadkill continues to be a significant source of wildlife mortality with several million collisions per year reported worldwide.  In one study in Saguaro National Park on the United States–Mexico border, an estimated 30,000 animals were killed by vehicles annually.  This included a variety of reptiles, amphibians, birds, and mammals, such as the mountain lion pictured below at Saguaro National Park.

Business Strategies for Managing Edge Effects

To address the issue of edge effects, corporations typically use one or more of the following four strategies:

Avoidance: The first—and best—strategy that companies can adopt to address edge effects is a simple one: Avoid the construction of buildings, roads, trails, power lines, pipelines, etc. in areas with high-quality habitat for species that are classified as endangered, threatened, or vulnerable to extinction.  This avoidance strategy may also be extended to a high-quality habitat for species that are classified as “species of concern,” depending on the health of the populations of those species as well as the degree and types of potential impacts.  To identify these “avoidance zones,” you’ll need to conduct a biodiversity assessment to collect data about the species that are in the areas where you hope to develop or operate.  

Minimization: For land that is not categorized as an avoidance zone, corporations shift their attention towards minimization strategies that reduce the duration, intensity, and extent of their impacts for biodiversity and wildlife.  For example, some oil and gas corporations take steps to reduce the width of land cleared for the construction of a pipeline or road.  In another example, the State Grid Corporation of China implemented an “Electricity Caravan” concept to minimize environmental impacts in a fragile plateau environment in the area of Sanjiangyuan National Nature Reserve (pictured below), known as “the water tower of China”.  This project between Golog and the main grid of Qinghai needed to adhere to strict environmental and water protection requirements.  To do this, workers from SGCC Qinghai Electric Power Company didn’t build any roads or bridges, but used horse caravans known as “Electricity Caravans” to transport the material and facilities needed for the project.  This alternate mode for transporting materials also served to reduce edge effects compared with the normal practice of building a road or bridge.

Rehabilitation and Restoration: In situations where avoidance and minimization are not practical or feasible, companies may turn to a third strategy: rehabilitation and restoration.  With this strategy, a company attempts to rehabilitate degraded ecosystems or restore cleared ecosystems in areas that have previously been cleared, developed, or neglected.  In another example from China, The China National Petroleum Corporation (CNPC) pursued an ecological restoration effort as part of its Western Pipeline project.  As soon as the new pipes were laid down and buried, CNPC planted vegetation in an attempt to restore the original landscape.  In addition, CNPC adopted a higher design grade, increased the pipeline burial depth, enhanced the anti-corrosion grade of the pipes, and installed cut-off valves to prevent oil leakage in the event of any accidents.  Since the project was launched in 2004, CNPC has followed up with monitoring and remediation measures on an annual basis to ensure that the restoration effort is a success.

Biodiversity Offsets and Voluntary Compensatory Actions: If avoidance, minimization, and restoration strategies aren’t a viable option, then companies may turn to a fourth strategy: biodiversity offsets and voluntary compensatory actions.  The concept of a biodiversity offset is relatively simple. A company has a proposed project that will result in negative impacts to biodiversity at the target site.  To offset that loss, the company enters an agreement to protect biodiversity at another site.  The result is no net loss of biodiversity or, preferably, a net gain of biodiversity from the perspective of species composition, habitat structure, ecosystem function, and cultural values of biodiversity.  Biodiversity offsets differ from philanthropic donations and other compensatory actions by linking the offset to the biodiversity impacts of a specific project.  With voluntary compensatory actions, there is no formal link between the actual biodiversity impacts of the company’s development activities and the biodiversity gains from purchasing land for conservation.

Are these strategies “profitable conservation” strategies?

The short answer is, it depends.  From a business perspective, the business case is not always attractive.  In some industries, businesses are encouraged, and sometimes required, to implement these strategies in order to obtain permission to operate in certain areas.  The permission to operate in these areas can lead to huge financial gains.  In other cases, these approaches have fewer tangible benefits to the bottom line, but they can be effective risk-management strategies that are well received by regulators, customers, employees, and the local community.

From a biodiversity and wildlife perspective, anything that we can do to minimize impacts to the habitat they depend upon is a good thing.  However, the reality is that the cumulative impact of development projects is taking a toll on the health of wildlife populations throughout the world.

Parting words and coming attractions

Well there you have it!  I hope this post gives you a better idea about the topic of edge effects, why it matters from a biodiversity perspective, and the steps that businesses can take to minimize edge effects during planning and construction activities.

Next week, we’re off to The Netherlands, where we’ll be looking at oil and gas giant, Royal Dutch Shell, and it’s profitable conservation strategies that are good for business, biodiversity, and wildlife.

Thanks for reading!

Mark