Policy paper

Government response to the recommendations of the Global Resource Initiative

Published 11 November 2020

This was published under the 2019 to 2022 Johnson Conservative government

Ministerial foreword

The world is at a crossroads

Coronavirus must be a wakeup call. Last month we heard that the millionth person had died – and every economy has been battered, even in the few countries that have remained free of the virus.

Like AIDS and Ebola, evidence suggests that COVID-19 is very likely the consequence of our destruction of nature. But its impacts will be dwarfed by the consequences of climate change and environmental degradation for global health, food security, resilience, and stability – unless we all take urgent action on a global scale.

The world’s forests are our frontline. Yet we’re destroying the tropical forests that are home to around 80% of biodiversity at a rate of 30 football pitches every minute – making deforestation a leading cause of climate change and reducing our resilience to its impacts like flooding and drought. Around 80% of global deforestation is driven by agriculture, much of it to produce the commodities we all use on a daily basis, like palm oil and cocoa. Without even thinking about it, we are in effect importing significant levels of deforestation into the UK.

When nature’s free services fail, the poorest people suffer first and worst. Over a billion people rely directly on forests for their livelihoods – including indigenous peoples who look after around 80% of biodiversity. But fundamentally we all depend on the world’s great forests, from the Amazon to the Cuvette Centrale, for everything from temperate climate and weather systems to resources. Over three quarters of the world’s accessible fresh water originates from forest catchments.

Within every challenge, there is an opportunity. Protecting and restoring mangroves, forests, and peatlands could provide around a third of the most cost-effective climate change solutions we need, while supporting species and helping communities adapt to become more resilient. Shifting towards more sustainable forms of agriculture would not only protect the planet’s lungs, but it could add a further $2.3trn in productive growth to the global economy and create a further 200 million jobs by 2050.

Around the world we are seeing new, greener ways of producing the food we eat, and helping the poorest farmers to build a better future. For example, the UK’s support to the Ethiopian wild forest coffee value chain, grown in Ethiopia’s native forests, not only provides local communities with a price premium, its genetic value has the potential to increase the disease resistance and quality of cultivated coffee crops globally.

We know that there is no pathway to Net Zero emissions – or indeed the Sustainable Development Goals - that does not involve protecting and restoring nature on an unprecedented scale. But despite the huge contribution nature can make, it attracts just 3% of global climate finance.

So as co-chairs of the High Ambition Coalition for Nature and People, and through our forthcoming Presidency of the UN Climate Change Convention’s 26th Conference of the Parties (COP26), we are bringing countries together around the table and convening a dialogue between producer and consumer governments to take forest positive actions that promote trade and development. If enough of us work together – producers, consumers, North, South, East, West, developing, and developed – then we can shift the market to make forests worth more alive than dead.

Part of that will come from public money. At the UN General Assembly in 2019 the Prime Minister announced a doubling of UK International Climate Finance to £11.6bn and through that we are committed to increasing our spend on nature and nature-based solutions. We are encouraging other countries to do similarly.

But public money alone will not be enough, and so we are encouraging governments to urgently identify and deploy the powerful levers they hold to shift their economies towards sustainability, which will also create new markets and growth opportunities for the private sector.

In the UK we know that even if we get our own house in order, our environmental footprint extends far beyond our own shores.

So in 2018, we asked an independent taskforce – the Global Resource Initiative (GRI) – to provide us with advice on how we could strengthen our efforts to tread more lightly on the environment. This document lays out how the government is responding to the GRI’s 14 recommendations, published in March 2020.

Because of the urgency of the challenge, we are already responding to the report’s headline recommendation with a world-leading new law to clean up the UK’s supply chains and clamp down on illegal deforestation. The new due diligence law would require bigger businesses to prove that forest risk commodities they use are produced in line with local laws designed to protect forests. We want to ensure that farmers who are working hard to do the right thing are rewarded with access to growing markets.

No single country or sector can deliver the change that is so urgently needed: only by working together we will be able to deliver for the health of our planet and all the people that depend on it.

At the UN in September, our Prime Minister joined 75 other leaders in signing an unprecedented, powerful ‘Leader’s Pledge for Nature’ – an ambitious call to action that the UK played a leading role in crafting. It recognises the failure of so many previous declarations and invites every generation to judge leaders on whether they honour their commitment to taking 10 urgent actions to reverse the loss of biodiversity by 2030.

Our challenge now is to turn those words into action.

The Rt Hon Lord Zac Goldsmith
Minister for Pacific and the Environment

Lord Callanan
Minister for Climate Change and Corporate Responsibility

Introduction

The problem of deforestation

Deforestation is a leading cause of CO2 emissions globally, second only to burning fossil fuels: forest loss accounts for 11% of global CO2^{[footnote 1]}, equivalent to the total emissions of India. 80% of this deforestation, particularly in tropical regions^{[footnote 2]}, is due to land and tree clearance to make way for grazing animals and to grow crops such as soya, palm oil, cocoa – so called ‘forest risk commodities’.

The conversion of forests into agricultural land responds to the need to drive economic development and secure livelihoods. The production of these commodities accounts for a significant percentage of GDP in many countries, providing jobs for millions of smallholders. While there is a lot of work focused on increasing the sustainability of production, at present the market does not sufficiently value sustainable production techniques: the economic incentives therefore remain in favour of converting forests into agricultural land.

While in global terms the UK is a relatively small consumer of forest risk commodities, it is leaving an ever-larger footprint on the world’s forests. One recent report estimated that UK imports of just 7 commodities such as soy, cocoa and palm oil account for a land footprint equivalent to 88% of the UK in size – 15% up from just 3 years ago^{[footnote 3]}.

The Global Resource Initiative

That is why in 2019, as part of the UK’s 25 Year Environment Plan, we asked an independent Taskforce – the Global Resource Initiative – comprising representatives of UK and international business, finance and civil society to come together to advise the government on the role the UK can play, building on global and domestic initiatives, to grow the international trade of sustainably produced commodities in order to protect and restore the global environment.

Our approach to tackling the problem

The GRI recommendations built upon a decade’s worth of our existing work in this area, which is designed to achieve 3 key things:

• support producers to shift to more environmentally and economically sustainable land use
• increase market demand and strengthen price signals for sustainably produced commodities
• forge strong partnerships to support collective global action

The following sets out how we do this.

Supporting producers

Rural communities, entrepreneurs and businesses are at the heart of this transition: to succeed it must work with them and for them. The UK is supporting these producers to scale up sustainable land use approaches that protect forests and support clean growth and economic development. Accelerating their adoption of sustainable production and land use systems requires new policies, incentives, technologies and technical support.

The UK government supports the Partnerships for Forests Programme, which incubates and strengthens the market conditions for innovative sustainable forestry and farming businesses in Africa, South East Asia and Latin America, helping them to increase their revenues and secure investment capital.

Growing markets for sustainable commodities

UK companies have been at the forefront of global efforts to reduce the impact of commodity supply chains on forests and other critically important ecosystems, and we have supported these efforts. UK companies have chaired the global sustainability committee of the Consumer Goods Forum and used the UK Roundtables on Sustainable Palm Oil and Soya to tackle the problem of deforestation. UK Aid is supporting developing countries to grow sustainable trade, for example by promoting the legal timber trade and the development of certification schemes for palm oil.

Aligning collective global action

Global partnership and coordination are essential to success. We support the Tropical Forest Alliance, which brings together companies, governments, civil society, indigenous peoples, local communities and international organisations to deliver transformative change in the sector. We also work closely with business and 6 other European governments on sustainable, deforestation-free supply chains through the Amsterdam Declaration Partnership.

Government response to the GRI

The GRI recommendations build on the government’s existing work in this area to date and seek to use the UK’s position on the global stage to deliver increased global ambition and action. Its recommendations covered:

• the strategic pathway
• increasing demand for sustainably produced commodities
• aligning global action and finance
• accelerating the pace of change through research and development and monitoring and evaluation

The GRI published its report on 20 March 2020. See the full GRI report.

Three departments – the Department for Business, Energy and Industrial Strategy (BEIS); the Department for Environment, Food and Rural Affairs (Defra); and the Foreign, Commonwealth and Development Office (FCDO) – commissioned the work of the GRI Taskforce. We have coordinated the government’s work on responding to its recommendations, working closely with colleagues in other Departments including in Department for International Trade, HM Treasury and Cabinet Office. We work collaboratively with the Devolved Administrations on any specific policy interventions that intersect with devolved competences.

Recommendation 1: Setting the strategic pathway

Recommendation 1a

The government should publish and commit to the delivery of a Strategic Sustainable Commodity Action Plan by autumn 2020 setting out measurable time-bound actions for government, business, finance and others to take, both at home in the UK and through a global collective action agenda, to provide a clear framework for the delivery of the recommendations in this report and to achieve the goal of the GRI.

Government response

This report sets out the government’s approach for responding to the GRI’s recommendations, working with UK and international partners. Our work in this area forms a critical part of our wider efforts to promote a greener, more inclusive economic recovery from Covid-19. Much of the work we do is this area is nested in our wider international commitments to climate change, including through scaling nature-based solutions. It also reflects our commitments under the Leaders’ Pledge for Nature, signed by the Prime Minister in September 2020, which promises to support sustainable supply chains and reduce the impact on ecosystems caused by global demand for commodities and encouraging practices that regenerate ecosystems.

Recommendation 1b

The government should introduce a legally binding target to end deforestation within UK agricultural and forestry commodity supply chains by no later than 2030.

Government response

The 25 Year Environment Plan set out a series of headline indicators to track delivery of progress. One of these headline indicators (15) relates to the “overseas environmental impacts of UK consumption of key commodities” and is designed to enable us to measure the risks and impacts associated with our consumption of forest-risk commodities. We have commissioned the UK’s Joint Nature Conservation Committee (JNCC) to develop a high-level indicator, so paving the way for its introduction. The first phase of that work will be delivered by March 2021.

The Environment Bill, currently being debated in Parliament, includes a power to set long-term environmental targets. We recently published a target policy paper that provided an overview of the scope of targets that government is currently considering. Before committing to specific targets, we will gather further evidence including carrying out a public consultation. As we progress vital work to consider how we can tackle deforestation within UK agricultural and forestry commodity supply chains, we would like to develop our evidence and assumptions of whether statutory long-term targets for deforestation would be an appropriate mechanism to drive this change.

Recommendation 1c

The government establishes an ongoing independent advisory taskforce of business, finance and civil society leaders to support the development and implementation of the GRI recommendations, initially for the period of one year.

Government response

Recognising the value of the GRI and the scale of work still to be done together, the government will continue to support the work of the Global Resource Initiative Taskforce. Funding for the GRI Taskforce is confirmed through December 2021. During this period the GRI Taskforce will continue to provide independent advice to the Government and act as ambassadors for the ambitions set out under the GRI.

The GRI process has provided a new mechanism for business, finance and civil society to work with government to develop ambitious, interlocking policies to help to reduce our global climate and environment footprint. The model allowed for experts across sectors to directly inform government policy making and better coordinate the business, finance and policy levers required to create a clear demand-signal for sustainable commodities in the UK.

Recommendation 2: Driving market demand for sustainable commodities

Recommendation 2a

That the government urgently introduces a mandatory due diligence obligation on companies that place commodities and derived products that contribute to deforestation on the UK market and to take action to ensure similar principles are applied to the finance industry.

Government response

On 25 August 2020 the government published a consultation inviting stakeholders’ views on whether it should introduce a requirement on businesses in the UK that use forest risk commodities to undertake due diligence on their supply chains. The consultation closed on 5 October 2020. In its response to that consultation, the Government announced that it intends to proceed to legislate on this issue through a government amendment to the Environment Bill.

The proposed new legislation would prohibit larger businesses in the UK from using forest risk commodities that have not been produced in line with producer country laws. It will also require companies to demonstrate that they have undertaken due diligence on their supply chains, and to publish the results. Companies that do not comply with these rules would be subject to fines and other civil sanctions. The legislation will also provide a pathway to recognise national standards and certification schemes to ease due diligence requirements and create a platform for dialogue with producer countries.

The reporting obligations set out in the legislation will provide data that others, including civil society and the finance sector, can use in their work. The specific format of reporting will be determined through secondary legislation, but the intention is that it will be designed in such a way as to maximise alignment with other related disclosures, including those supporting environmental, social, governance (ESG) assessments and those arising from the taskforces on climate-related and nature-related financial disclosures (TCFD and TNFD).

This in turn this will support the government’s plans to mandate disclosures of climate-related financial information in line with the TCFD recommendations by 2025, with a significant proportion of mandatory requirements in place by 2023. It will also support the broader ambitions of the Taskforce on Nature-related Financial Disclosures to mainstream and integrate nature-related financial considerations (impacts and dependencies) into the risk architecture, financial decision making and reporting of businesses and banks.

Recommendation 2b

The government works with industry to help broaden overall business engagement and to support businesses beyond the leaders to better understand and address deforestation and land conversion risks within their supply chains, beginning with the food service sector through a Sustainable Food Service Action Plan.

Government response

The food service sector includes a range of companies, from restaurants, to school cafeterias, to catering services, it is worth £57 billion a year, and the UK food service industry is the 4th largest employer in the UK.

Recognising the importance of the food service sector and the challenges the sector now faces in light of COVID-19, the UK will work with leading food service sector actors to develop and consult upon a Sustainable Food Service Sector Action Plan to be published in 2021 and delivered throughout 2022. This additional support will be funded through ongoing HMG funding to the Global Resource Initiative Taskforce, with the aim of bringing a greater number of food service companies into the discussion on sustainable commodities.

The Action Plan would help coordinate trade associations to support their members to engage on sustainable sourcing, providing support and information to companies, enabling them to comply with any changes in government buying standards and any forthcoming due diligence obligation. It will also provide information to associations, member companies, customers, and end users on issues relating to forest risk commodities.

The Action Plan will build on and be delivered through the government’s UK Roundtables on Sustainable Palm Oil and Soya. Through these industry-led initiatives UK companies meet to agree common objectives for sustainable sourcing and work across their supply chains to take action and track progress.

Recommendation 2c

The public sector should lead the market transition to sustainable commodities by strengthening and extending existing sustainable commodity public procurement requirements, reinforcing due diligence obligations placed on business.

Government response

The Greening Government Commitments set out the actions UK government departments and their agencies will take to reduce their impacts on the environment, while also cutting costs and increasing organisational resilience. These include provisions relating to sustainable procurement in the public sector as a whole, as well as the mandate to update Government Buying Standards, which apply to central government. These commitments provide the framework for increasing the focus on sustainable procurement of forest-risk commodities across the public sector.

Defra is responsible for the Government Buying Standards for Food and Catering. We are commissioning research regarding public sector procurement of food and catering services to support the delivery of sustainability goals, with a final report to be delivered in September 2021. We will use that research, together with the findings of the enquiry by the Environment, Food and Rural Affairs (EFRA) Committee, to inform future updates of public sector food procurement guidance.

Recommendation 2d

Action be taken to support a consumer transition to more sustainable and healthy diets and to reduce food waste in supply chains.

Government response

The government recognises the strong linkages between the independent review of the national food system led by Henry Dimbleby and the ambitions of the GRI in relation to food and diets. The analysis, led by Henry Dimbleby, Defra’s lead Non-Executive Director, is the first independent review of England’s entire food system for 75 years. The report will address the challenges of supporting people to eat healthy diets, producing food sustainably and protecting national food security, while also looking at related issues such as trade and the price of food.

An interim report was published on 29 July, which examines how the food system was impacted by COVID-19 and features chapters on trade, health and food insecurity. The final report will be published in spring 2021 and will include a root and branch examination of the food system and the economics that shape it as well as looking at the environmental impacts of the food system. The government has committed to responding to the report’s recommendations in the form of a White Paper within 6 months of the release of the final report.

Recommendation 3: Aligning collective global action and finance to deliver at scale and pace

Recommendation 3a

Government take a bold new approach to partnerships, dialogues and trade between producer and consumer countries, working together to develop solutions that support the transition to sustainable commodity supply chains that are fair and equitable for farmers, foresters, communities and indigenous peoples, supporting long term economic growth through sustainable trade.

Government response

The government has acted on this recommendation and is launching a new state-level dialogue with producer and consumer countries to set the course for a bold new global approach to our trade and investment in sustainable commodities that will protect and restore forests. We recognise that on our own the UK cannot solve the problem of global nature loss. It requires support to countries to achieve their economic goals while transitioning to more sustainable land use. This new dialogue builds on years of efforts to forge partnerships between governments, the private sector and communities in this space.

Partnerships:

The UK is playing a leading role internationally in developing partnership approaches to addressing land-use change and deforestation. We will build on and scale-up this work as we work to respond to the recommendations of the GRI Taskforce.

Engagement to date includes playing an active role in the creation of the Forest Law Enforcement, Governance and Trade (FLEGT) action plan, which supports producer governments such as Indonesia and Ghana in their efforts to tackle the illegal timber trade through a combination of demand and supply-side measures. We have transposed relevant EU legislation into UK law, and are replicating FLEGT’s Voluntary Partnership Agreements with partner countries. FLEGT is a well-respected, deeply collaborative programme which works in partnership with other governments, making it a good model for HMG’s future work in this area.

The government also actively promotes efforts to align collective global action, between producers, consumers, companies and civil society. The UK is a founding member of the Tropical Forest Alliance, which brings together over 160 governments, companies and NGOs working in support of deforestation-free agricultural commodities. In September, the TFA supported the Consumer Goods Forum to launch the Forest Positive Coalition for Action, a group of 17 major consumer goods companies with a collective market value of US$1.8 trillion, who are committed to delivering a forest positive future through their supply chains and market influence.

The UK is a major supporter of the TFA Africa Palm Oil Initiative, which is promoting a partnership approach to sustainable and deforestation-free palm oil in ten West and Central African countries, and the Cocoa and Forests Initiative, which supports joint action by governments and companies in Ghana and Cote d’Ivoire.

The UK will also continue to support the Amsterdam Declarations Partnership, which brings together a group of European countries to collaborate on reducing deforestation linked to agricultural supply chains.

Dialogue:

2021 will see summits on climate and biodiversity being hosted by the UK and China respectively. It offers up an opportunity to bring these two agendas closer together, to strengthen country partnerships and take coordinated action on both areas. Recognising this opportunity, almost 80 countries have signed the Leaders Pledge for Nature, committing them to deliver a series of comprehensive actions to deliver sustainable development, tackle climate change and reverse biodiversity loss.

We will use our forthcoming Presidency of COP26 to support this work and take forward the GRI’s recommendations launching, for example, the Sustainable Land Use and Commodity Trade Dialogue. This government-to-government initiative will bring together major producers and major consumers of key agricultural commodities to agree a shared vision for a sustainable land economy. The response in section 3c covers the dialogue in more detail.

Trade:

The government is committed to setting out by COP26 how the UK can further improve forest-risk supply chain resilience and sustainability through trade and investment. Trade measures provide an important set of levers through which to reset the incentives in favour of a low carbon, high biodiversity future, and to generate a stronger market signal for sustainably produced commodities.

As an independent trading nation, we will ensure the UK’s trade policy supports the government’s climate, environment and sustainability goals and are considering a range of bilateral and policy measures to advance these aims.

For example, the new UK global tariff will reduce import tariffs on 104 environmental goods entering the UK. This will help to promote the deployment of renewable energy generation, energy efficiency, carbon capture, and the circular economy through recycling and reducing single-use plastics.

Free Trade Agreement (FTA) negotiating teams are exploring options in the design of future trade and investment agreements, with the aim of securing high ambition sustainability provisions with key trading partners, drawing upon existing FTA precedents to enhance cooperation on areas such as biodiversity, forestry and supply chains.

Beyond bilateral trade deals, the UK will work with the international community to make trade more sustainable. We have outlined the environment as one of our 3 priority areas for UK ambition and leadership to the WTO General Council earlier this year. We will use our COP26 Presidency next year to push climate and environmental issues to front and centre of the multilateral trade agenda. This includes at the WTO Ministerial Conference (MC12), and as the WTO welcomes a new Director General.

Recommendation 3b

The government creates a sustainable commodity import guarantee scheme in order to reduce the cost of trade finance for sustainable agricultural production.

Government response

The government is assessing the case for implementing a Sustainable Import Guarantee and has set up a Working Group with the Green Finance Institute bringing together government and banking sector representatives to look at this in more detail. The Working Group will present an initial report on their findings by the end of 2020, identifying whether there is a financing gap in commodity supply chains that could be filled by a government-backed sustainable trade finance incentive.

Early findings of the Working Group suggest that large commodity importers are not significant users of bank facilitated trade finance, however more work is underway to investigate this and better understand where a financial incentive could lead to behaviour change. We agree that there are potential benefits in reducing the cost of trade finance for sustainably produced commodities and government guarantees are an efficient way to incentivise this behaviour change at low or no cost to the UK taxpayer.

In parallel with this evidence gathering, the government is considering possible funding routes and delivery methods that could be used to implement the Sustainable Import Guarantee, learning lessons from existing trade finance mechanisms, such as those delivered by UK Export Finance.

Recommendation 3c

The government mobilises a global call for action to tackle deforestation and build sustainable commodity supply chains in the lead up to COP26 to:

• build multilateral partnerships for collective action between producer and consumer governments, companies, finance institutions, farmers, foresters, forest communities and indigenous peoples
• mobilise global funds, public and private, to support sustainable production and trade in food and agricultural products
• begin with the development of shared roadmaps for agricultural and forestry products in Biomes and landscapes of greatest shared risk and shared benefit, for nature and people

Government response

The UK is using its role as forthcoming President of COP26 to launch a bold new Dialogue on Sustainable Land Use and Commodity Trade ahead of the Summit in Glasgow in 2021. This will bring together producer and consumer country governments to discuss sustainable land use and forestry, economic development, and trade.

Reducing the overseas footprint of our consumption is not something the UK can do alone. The perspectives, priorities, and goals of major producer countries need to be at the heart of action to reduce deforestation, and we need mechanisms to promote equitable government-to-government dialogue in the spirit of partnership.

Through this international dialogue we will work regionally and globally to agree an inclusive vision and effective action to grow sustainable forest and land use economies. This will include a focus on helping industries transition towards more sustainable practices and opening up new opportunities for investment and jobs and livelihoods in forests, land use and agriculture.

We will aim to agree principles for aligning the governance of production and consumption of internationally traded agricultural commodities in a way that respects all countries’ interests. We will work with other countries to put these into practice in the coming years. We hope to see them incorporated into national policy and to be adopted by other market participants to guide their actions (companies, producers, investors, traders). The Dialogue will provide the context through which we can set out a roadmap for the UK to green its international supply chains in partnership with others.

To underpin the government-to-government Dialogue, we have also partnered with the Tropical Forest Alliance (TFA) to run a multi-stakeholder process which engages businesses and civil society to provide strategic guidance and insights to the Dialogue and help deliver ambitious and transformational actions for COP26 and beyond. TFA will help us to identify priority projects which are aligned with the principles of the Dialogue which the COP26 Presidency and our partners can support in advance of Glasgow to showcase good practice and demonstrate early action.

This campaign will play an important role in enabling the UK and countries who signed up to the Leaders’ Pledge for Nature in September 2020 to meet their shared commitment to support sustainable supply chains and encourage practices that regenerate ecosystems^{[footnote 4]}.

Recommendation 3d

The government takes steps to establish London as the global centre for high integrity carbon trading by:

• commissioning an Advisory Group to accelerate expert discussions about next-generation carbon markets, learning lessons from existing UK and international initiatives, providing advice on principles, standards and measures for how to strengthen carbon markets and associated trading services and components
• using the UK’s COP26 Presidency to work towards agreement for robust compliance markets through the Paris Agreement
• providing support for building the supply of robust carbon credits (through capacity-building and learning lessons from existing UK and international initiatives) including from high quality forest-based credits

Government response

As incoming COP President, the UK is fully committed to facilitating a successful outcome to ongoing negotiation of the implementation framework of Article 6 of the Paris Agreement at COP26, which will provide clarity on international rules for cross-border carbon trading.

The government will also support initiatives working towards the growth of high-quality voluntary carbon markets (companies buying offsets without being legally required to do so). There is a need to bring together the many global initiatives that are working on guidance in this area to clarify and agree common principles for how transactions in carbon markets can generate the greatest benefit for the climate, people and nature. Examples include: ‘Foundations for Net-Zero’ led by the Science Based Targets Initiative; the ‘Natural Climate Solutions Alliance’ coordinated by World Business Council for Sustainable Development and the World Economic Forum; and the independent, private-sector-led ‘Taskforce on Scaling Voluntary Carbon Markets’, initiated by Mark Carney and convened by the Institute of International Finance in London. As part of this, the UK and partners will support a high-ambition coalition to identify common principles for the voluntary use of carbon credits to deliver strong environmental and social benefits.

To build up the supply of robust carbon credits, the government has provided £137m to date of the UK’s International Climate Finance to strengthen the governance, policies and technical systems required for developing countries to design and implement domestic carbon pricing and trading systems and build capability for international carbon trading. The UK has also committed £330m to support the development of landscape and national-scale programmes to halt and reverse emissions from deforestation in over 20 partner countries, for instance through the REDD for Early Movers Programme. This provides a potential platform for developing countries to connect emission reductions and removals from forests with local and international carbon markets.

The government has also launched the £50m Woodland Carbon Guarantee, which will boost the UK domestic carbon offset market and guarantee long-term income for land managers who plant trees to sequester carbon. This will support capacity-building and learning lessons to further our international goals.

Recommendation 3e

The government launches a significant blended finance demonstrator facility and establishes a centre of excellence for blended finance public-private collaboration in order to mobilise capital, at scale, in support of sustainable land-use, forest and livelihoods.

Government response

The UK is exploring whether to increase support for blended finance, including through scaling up first-loss capital investment through our International Climate Finance to mobilise greater flows of private finance into sustainable land use funds and showcase excellence in sustainable land use investment.

There is over $1 trillion worth of investment flowing towards agricultural commodity production, the vast majority of which is flowing towards conventional commodity production. Shifting even a fraction of this investment towards sustainable land use approaches would be significant and shifting this at scale would be transformational.

This is already a focus for the UK’s International Climate Finance, for example through the Partnership for Forests programme (£120m, over the years 2015 to 2023) which supports the development of sustainable businesses both through mobilising capital and developing a portfolio of investable projects. To date this programme has mobilised £225m in private investment including from blended finance initiatives and through other public-private partnerships, at a ratio of £5 of private investment to every £1 of public financial support.

Recommendation 4: Accelerating change, tracking progress

Recommendation 4a

Government funds and supports the scaling and commercialisation of technologies and innovations that provide transformative solutions for more sustainable agricultural and forestry supply chains.

Government response

The government agrees that technological advances and innovation have an important role to play in delivering more sustainable agriculture and forestry supply chains. We have made significant investments in this area to date and are embedding the GRI’s recommendations into our consideration of future investment.

We have funded the development of tools and initiatives that increase transparency around forests, land use and agricultural commodity supply chains, including Global Forest Watch, Transparency for Sustainable Economies (Trase) and the Zoological Society London’s Sustainability Policy Transparency Toolkit. These have helped to drive innovation in agricultural production and supply chain monitoring and increase transparency and accountability.

We have also ensured that innovation funding for sustainable food and land-use systems is available through UK Research and Innovation (UKRI), the national funding agency investing in science and research both domestically and to meet global challenges, as well as the national academies.

The Global Challenges Research Fund is a £1.5 billion fund to support cutting-edge research into meeting the Sustainable Development Goals which has funded multiple research projects focused on sustainable agriculture and food systems. Examples include projects looking at ecosystem services and sustainable production in smallholder oil palm systems in Malaysia and Indonesia and sustainable enhancement of food production in East Africa.

The Newton Fund has provided over £735 million of bilateral support for specific R&D and innovation priorities identified by partner countries. Its partnership with Brazil has, for example, funded research into optimising sustainable crop production, and in Colombia it has supported research into the sustainability of livestock systems.

The UKRI Industrial Strategy Challenge Fund, as part of its objective to strengthen UK science and business innovation, recently awarded £5.9 million to a consortium led by Entocycle, an insect farming start up, to help the UK become a hub for Black Solider Fly farming and technology. Sustainable insect protein for animal feed, using black solider flies fed on food waste, have the potential to reduce demand for imported crops, such as soya.

The UK Catapult Centres are also part-funded by UKRI and each ‘Catapult’ specialises in a different technology area, supporting businesses to solve problems, develop new products and services, and accelerate commercial application of new technologies. The Satellite Applications Catapult is looking at scaling and commercialising satellite technologies to support sustainable commodity production, for example through its ForestMind programme, support sustainable sourcing with major retailers.

Recommendation 4b

The government supports the development of a monitoring, measurement and reporting framework to support the implementation of the recommendations of the GRI, covering current and future commodity supply chain forest risk, impact and response, building on the core principles of the Accountability Framework Initiative (AFI).

Government response

The government agrees that robust monitoring, measurement and reporting is essential and is a major donor to the Accountability Framework Initiative and other UK-supported supply chain transparency initiatives which strengthen understanding of commodity supply chain risk.

As government develops a global footprint indicator, we will continue to explore its scope as a tool to support the monitoring of our policy interventions and our progress in reducing the UK’s overseas deforestation risk.

As we consult on further details of our due diligence legislation, we will continue to explore how to best ensure that our policies are effectively monitored and their impacts accurately measured, using and aligning existing modelling, data and platforms where possible. Our due diligence legislation includes an in-built review clause requiring the government to review the effectiveness of the law every two years and to set out what steps it intends to take as a result before Parliament. We will consult closely with key monitoring and reporting organisations as we move towards consulting on detailed reporting requirements for businesses to ensure the data generated enables third party scrutiny. At the same time, we will be considering how best to present this data to the public.

The way forward

The 3 key principles that underpin our UK approach will continue to provide the framework for the way ahead. We will continue to focus on supporting producers to transition to more sustainable agricultural practices. We will build stronger markets for sustainable products. We will deepen our partnerships with governments and business.

Through scaling up our International Climate Finance and by mobilising greater public and private investment in sustainable land use, we will level up support for producers so that increasingly more farmers and smallholders transition to sustainable agricultural practices.

Our domestic policy framework will drive greater market demand for sustainably produced commodities through key levers such as our due diligence obligation, improving the sustainability of public procurement and by reducing food waste and switching to sustainable diets.

We know that unless we can deliver a new model for sustainable land use through which it becomes more economically viable to work with nature and for climate, it will be difficult to achieve our objectives. By combining our domestic policy interventions and International Climate Finance with ambitious partnerships with governments and the private sector we will demonstrate that it is possible to deliver the triple win for people, nature and climate.

In the year ahead several critically important global moments offer the opportunity to accelerate collective action as we seek to build partnerships on a global scale. In his speech on the Leader’s Pledge for Nature, the Prime Minister made clear that the time for action is now. Through key international opportunities such as the Convention on Biological Diversity (CBD) and COP26, we will take the learning from the Global Resource Initiative into the world and build a global alliance to drive transformative change.

1. Intergovernmental Panel on Climate Change (IPCC), ‘IPCC Fifth Assessment Report’ (2014) ↩

2. Hosonuma et al (2012). An assessment of deforestation and forest degradation drivers in developing countries, Environmental Research Letters, 7,4 ↩

3. WWF and RSPB Riskier Business 2020 Report: The UK’s Overseas Land Footprint ↩

4. UN Summit on Biodiversity (2020) The Leaders’ Pledge for Nature ↩