Can Champagne help us think bigger on sustainability?

With reports of commodity-driven deforestation accelerating, sustainability in countries like Brazil and Indonesia needs a regional approach similar to that enjoyed by gourmet brands like Champagne.

© Richard Whitcombe

By Daan Wensing, Global Landscapes Program Director, IDH

This blog was originally published in Business Green on 8 November 2018.

If you ask yourself what products you associate with a particular region, chances are you will come up with gourmet brands like Champagne, Parma ham or Stilton.

The success of these brands derives from a mix of unique production requirements and robust local and regional governance, leading to a strong international market reputation that coincides with an entire area.

If we can do this with sparkling wine, ham and cheese, can we do it with other agricultural commodities, especially those associated with deforestation (and economic development), such as palm oil, soy or beef? Or better put, with those commodities produced in regions where they are trying to solve the problem of deforestation?

A regional approach to realizing sustainability commitments

The UN Food and Agriculture Organization (FAO) recently found that food products linked to their place of origin (‘geographical indications’) are economically and socially beneficial to rural areas and can promote sustainable development. So, it certainly makes sense to look at sustainability from a regional perspective.

And there are more reasons. Due to rising global demand for responsible agricultural commodities, businesses and governments are increasingly putting sustainability on their agendas – from no-deforestation pledges to the UN Sustainable Development Goals (SDGs).

But making commitments is easier than realising them. Certification schemes like Fairtrade or Rainforest Alliance are doing their share but they are typically focused on improving practices within single farms or commodity supply chains. That makes it difficult to tackle water depletion, deforestation or other land-and resource management issues that go beyond the farm gate.

They need to be dealt with on a regional, or landscape level.

IDH has ample experience with building public-private partnerships across landscapes to address deforestation. Like in Kenya where tea companies, local communities, governments and others work together to save the Mau Forest. Or in Mato Grosso in Brazil where beef and soy producers have joined forces in support of the governments’ policy to end illegal deforestation. And in Aceh in Indonesia, where palm oil companies and the government are trying to address deforestation and peat fires in a regional approach.

Now, it is time to connect those regions to international markets – Champagne-style. We need a regional model that can supply sustainable commodities in large quantities in a cost and time efficient manner. This new model is the Verified Sourcing Area (VSA), currently being developed and piloted by IDH and our partners.

Connecting sustainable regions to markets

A VSA is a defined area or jurisdiction (e.g. municipality, province or district) with a clear governance system linked directly to sustainability criteria on the ground and with international market demand.

In producing regions, key local actors, such as farmers, businesses, communities and governments agree on, and jointly work towards targets on sustainable production, forest protection and social inclusion. Once an area shows compliance with these standards, it can be marked a “VSA”.

Buyer, trader or interested third parties can then easily check these standards via an independent monitoring body, helping improve the uptake of sustainable products on national and global markets. In turn, this creates economic incentives to improve social, environmental and economic performance on the ground.

Once a region develops a reputation for being verified sustainable, so it becomes a self-fulfilling prophecy: stakeholders will expect the region to stay the course and uphold their reputation. Continuous improvement on existing standards is an essential part of the concept.

IDH is currently piloting the first VSAs in Mato Grosso state Brazil, where the government, companies, cattle and soy farmers and civil society organisations are collaborating to create a sustainably managed production area in the Juruena River Valley and in Sorriso respectively. The aim is to increase beef and soy production, improve farmer livelihoods and end illegal deforestation in the Amazon and Cerrado through one holistic approach.

As Daniel Eijsink, director of cattle farm Sao Marcelo in Mato Grosso told us: “We want to be known as a region with both high quality beef and sustainable production.”

The multinational French retailer Carrefour has already pledged to source from the area, with many other European companies to follow suit.

Similar efforts are under way in Aceh, to create a VSA that is connected to global buyers of palm oil and rubber, ensuring the commodities they purchase meet their sustainability commitments.

Commodity-related deforestation is accelerating. And so we need to think big on achieving our sustainability goals. Think Champagne scale.

Read more about the VSA approach