Global Forest Watch, an online forest monitoring and alert system, was launched last week by Google, together with 40 other partners such as the World Resources Institute and United Nations Environment Programme. The software is a mapping tool to track deforestation on a real-time basis. A few clicks will enable users to see how much forests have been degraded or destroyed in the last decade, and which industries were responsible.
Supply-chain traceability is now necessary for many consumer goods companies, in response to calls to boycott products that cause deforestation. Companies such as Unilever and Nestle have committed to source their raw materials from sustainable sources in the near term.
Ultimately, the certification of sustainable practices will only take off if businesses see it as a viable and cost-effective tool. Some shareholders increasingly see sustainability as a key performance indicator, and public companies must recognise this. Consider Norway’s sovereign wealth fund, which divested all of its palm-oil equities in 2012 as it saw the industry as a major culprit for widespread deforestation and biodiversity destruction in Indonesia.
Technology breakthroughs give rise to new solutions to address perennial problems such as deforestation. Google’s inclusion in these tracing efforts is also critical to lowering monitoring costs and achieving increased data accuracy and timeliness.
However, it is premature to optimistically assume that companies will immediately adopt sustainable practices even with greater innovations. Governments and consumers still have important roles to play.
Governments should create conditions requiring companies to be sustainable and give incentives to recognise those that have done so. A step in the right direction: Singapore’s recent announcement of a bill which, if passed, penalises companies responsible for transboundary haze pollution. Cynics say that the penalties are trivial compared to the profits raked in by the palm-oil producers. Some have suggested that the criminal penalty includes a jail sentence. Public feedback is currently being sought on the proposed legislation, which will then be debated in Parliament. The bill should emerge as one that will be taken with seriousness without causing undue fears in investors.
Governments should also promote the adoption of clear eco-labelling by companies to allow consumers to exercise their judgement and reward companies that are doing the right thing. Consumers can only play an effective role if the basis for buying is made clear to them through proper product labelling.
The convergence of technology and greater consumer awareness should prompt companies to etch sustainability into current business models.
It is also helpful if globally governments, corporates and NGOs can agree on common set of standards of sustainability. These would at least provide a basis for further harmonisation across different countries.
