The production of commodities such as palm oil and timber is a crucial driver of economic growth for many countries. Yet in many places, agricultural expansion for these and other commodities is driving deforestation, destroying irreplaceable habitats, negatively impacting the rights and livelihoods of local communities, and exacerbating climate change. Some governments, companies and investors have made commitments to achieve deforestation-free supply chains, but the complexity and opacity of global trade poses a major obstacle. For action on sustainable trade to be effective it is important to understand the supply chains of individual buyers from beginning to end, and the risks they are exposed to as a result.
We focus our attention on Indonesia, where we examine the wood pulp and palm oil industries and attempt to map their supply chains to demonstrate how commodity exports are linked to environmental and social harms in the places where they are produced, allowing companies, financial institutions, governments, and others to understand the risks and identify opportunities for more sustainable production.