COFCO International has reached traceability and completed social and environmental screening of all its directly sourced soy from current suppliers in the Matopiba region, by December 2021, an important stepping-stone towards establishing a sustainable soy supply chain in the environmentally sensitive region.
In 2020, COFCO International teamed up with the International Finance Corporation (IFC), a member of the Good Growth Partnership, to support a more traceable and sustainable soy supply chain in Matopiba, a region located within Brazil’s biodiversity hotspot – the Cerrado Biome.
The project is part of the Good Growth Partnership, a wider initiative, funded by the Global Environment Facility (GEF) and led by the United Nations Development Programme (UNDP) convening a wide range of stakeholders and initiatives throughout soy, beef and palm oil supply chains to reduce deforestation and enable sustainable development.
The project’s main goal was to establish traceability, meaning the ability to track the soy back to the farm where it originated and to assess these farms against several environmental and social criteria. The initial objective was to cover 85 percent of the company’s directly sourced soy by the end of 2021, but it was surpassed to achieve visibility over all of COFCO International’s direct supplies from current suppliers in the region.
The traceability and assessment components of the project involved the analysis of farm contours, satellite imagery and other geographical information against public available information and other sustainability aspects.
The analysis considered farm compliance against the following:
- Ministry of Labor – Forced labor list
- Institute of Environment and Renewable Natural Resources (IBAMA) – Embargoed areas
- Conservation Units
- Indigenous lands
The project also established land conversion profiles for individual farms and assessed supplier compliance with the Cadastro Ambiental Rural (CAR), a mandatory electronic registration which combines geospatial data of rural properties with their environmental information, including legally protected areas. COFCO International’s own teams, IFC experts as well as external experts from service provider Agrosatélite, have actively participated from the project.
The project included capacity building and training with more than 1,000 farmers utilising distance learning methodologies in 2021. Next year, COVID conditions permitting, the project partners plan to carry out in person training with direct COFCO International suppliers. The trainings promote sustainable practices which lead to soy production that is free from deforestation and land conversion.
“Achieving full traceability was a massively complex process which required detailed screening, data monitoring, imagery analysis as well as direct interactions with farmers,” said Julia Moretti, Global Head of Sustainability at COFCO International. “We now have full visibility of our direct soy supply chain in the region, and we are able to support local farmers on their journey towards sustainable and economically viable soy production.”
The Matopiba region spans more than 73 million hectares in the states of Maranhão, Tocantins, Piauí, and Bahía with 90 percent of its surface located in the Cerrado, which is recognised as the world’s most biodiverse savannah.
But with Brazil’s rise to become one of the world’s top producers and exporters of soybean, Cerrado’s ecosystems have come under increasing pressure from land conversion and agricultural expansion. Matopiba has been at the forefront of this expansion.
With the country’s soybean acreage expected to grow over the next decade, the need to protect the area’s native vegetation is more urgent than ever. Although Cerrado’s soy-related land conversion has been gradually declining, Matopiba itself has experienced high land conversion rates.
“IFC is fully committed to supporting industry leaders, such as COFCO, to demonstrate that it is possible to monitor their soybean supply chain, particularly in sensitive regions such as the Brazilian Cerrado," said Tania Kaddeche, IFC's Head of Manufacturing, Agribusiness, and Services in Latin America and the Caribbean. "While full traceability across key agricultural commodities in Brazil will take time and joint efforts from multiple stakeholders, we are pleased that we contributed to COFCO’s supply chain monitoring improvement and achieving this key milestone.”
COFCO International and IFC, who contributed equally to finance the project, used the services of Agrosatélite’s farm monitoring systems to obtain satellite imagery for monitoring land cover changes linked to deforestation. The data collection also involved COFCO International’s sustainability and commercial teams who facilitated the cooperation and dialogue with local farmers.
COFCO International will now develop action points and next steps on how to use the data to advance sustainability efforts in the area. The project outcomes will also support COFCO International to identify market opportunities for deforestation and conversion-free soy.
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