Summer marks a season of extreme weather for much of the US – wildfires, extreme heat or flooding rains, or all three, in some regions – putting the increasing challenges of climate change front of mind for many people. Also heating up? The pressure on businesses to control or reduce greenhouse gas emissions contributing to climate change. For some, meeting SBTi commitments loom, and for all, the regulatory landscape is becoming more complex.

Much of a company’s greatest potential for impact lies outside their direct operations, in the supply chain activities upstream that are classified as “scope 3 emissions.” That’s also where things get complex, and it can be overwhelming to address emissions across a web of supply chain actors that are often distant and disparate.

“The hardest part for companies is not setting a target,” says Brenda Mariana Huerta Garcia, Fairtrade International’s Senior Advisor Climate and Environment. “It is getting reliable, plot-level or farm-level information from fragmented supply chains made up of smallholder farming organizations.”

Fortunately, narrowing focus to deforestation-related land use change is a solid start to addressing scope 3 emissions effectively. 

What exactly are scope 3 emissions?

Greenhouse gas (GHG) emissions are broken down into three groups along a company's supply chain: scope 1, which are direct emissions that occur from sources controlled or owned by an organization; scope 2, the emissions associated with the purchase of energy to power production; and scope 3, which are all the other emissions associated with supply chain activities that happen up- and downstream of a company’s core production.

How is deforestation linked to scope 3 GHG emissions?

Scope 3 emissions can come from a wide variety of activities along the supply chain, but land use change is the biggest offender. For agricultural products, like coffee, cocoa, palm oil and soy, the most common form of land use change is deforestation. 

Forests play a crucial role as a natural and effective carbon sink to controlling Earth’s climate. Think all the way back to 4th grade science class. Remember photosynthesis? Sunlight is used by a plant to synthesize nutrients from water and carbon dioxide (CO2), one of several greenhouse gases. Trees use photosynthesis to capture carbon dioxide in their leaves, stems and trunks, making them effectively a vacuum cleaner for this greenhouse gas. However, if cleared, forests release significant amounts of that captured CO2 back into the atmosphere, transforming from carbon absorbers into carbon emitters. 

Environmental sustainability rests on social and economic stability.

Deforestation-driven land use change is a particular risk in supply chains that are dependent on agricultural products. When a forest naturally decays, it releases carbon slowly over a period of years or decades. But when forests are cleared or thinned by human activity - for example, slash and burn methods - large quantities of stored carbon are released immediately, which has a negatively compounding effect on the atmosphere and climate change.

Mitigating this risk and balancing the carbon scales isn’t as simple as replanting lost forest acreage, however.

“There are human issues at the root of this environmental sustainability problem. If farmers facing low prices, poverty, insecure land tenure, lack of technical support and climate stress are all driving deforestation, then companies cannot solve the problem only through reforestation-focused projects,” says Huerta Garcia.  

Wondering where to start on scope 3 emissions? Your sourcing standards can do some heavy lifting.

Assessing and mitigating risk, implementing better practices and marketing sustainability with confidence are complex feats that no company can tackle alone. That’s where a partner like Fairtrade is invaluable.

“Involve a partner as early as possible when mapping Scope 3 hotspots, identifying risk commodities, designing traceability systems, or preparing for due diligence requirements,” says Huerta Garcia. “If companies wait until a compliance deadline or a reputational issue emerges, the work becomes reactive and likely more expensive and less effective.”

When it comes to deforestation, Fairtrade standards cover a lot of ground. Certified farmer cooperative members are prohibited from causing deforestation and/or destroying vegetation in carbon storage ecosystems or protected areas. Specific to cocoa and coffee, commodities with higher risk for deforestation, Fairtrade has expanded standards to protect forest environments.  

Importantly, Fairtrade’s standards don’t treat deforestation and land use change as isolated problems. Core interventions, like the Fairtrade Minimum Price and the Fairtrade Premium, as well as standards addressing key economic and social sustainability levers, support the stable farmer livelihoods that are necessary for lasting change.

“The value of Fairtrade is not only the standard itself,” says Huerta Garcia, “it is the infrastructure around the standards: organized producers, auditability, our staff on the ground, farmer training, Fairtrade premium investments and deep partnerships that can turn corporate sustainability commitments into meaningful adaptation and mitigation action at farm level.”  

Fairtrade designs and implements agroforestry programs in partnership with government, philanthropic and private sector donors to support farmers in protecting and rebuilding their ecosystems. 

For example, over the past decade, Fairtrade has provided training on Dynamic Agroforestry (DAF) with cocoa farmers in Ghana. DAF is a production system that combines cocoa with fruit trees, timber trees, food and cover crops on the same piece of land, creating a system that respects succession, high density and diversity planting. This method ultimately reduces the use of chemical inputs, helps support higher cocoa production (+100kg/ha on average), builds resilience of cocoa trees to disease and pests and diversifies farmer’s income. One example, the Ghana Agroforestry for Impact project, first launched in 2023 and since has trained 400 lead farmers whose knowledge is benefiting nearly 100,000 more Fairtrade-certified cocoa farmers. To date, more than 490,000+ cocoa seedlings, plantain suckers, fruit trees and timber trees have been distributed and planted, transitioning more than 102 hectares of land to dynamic agroforestry.  

“Efforts are strongest when they connect compliance with producer support,” Huerta Garcia says. “Geolocation with satellite monitoring helps identify risk, but training, agroforestry, farm improvement plans and livelihood support are what help reduce risk on the ground.”