Methodology

Methodology

HOW WERE TRADERS ASSESSED?

The Soy Traders Scorecard assesses 22 companies involved in the trading of soy on the commitments they have made and the actions they have taken to ensure that there is no destruction of nature or human rights abuse in their supply chains.

WHO WAS ASSESSED?

Companies were selected based on their potential exposure to deforestation/conversion risk. This was measured by estimated volumes of soy exported from key producing countries (Brazil, US, Argentina and Paraguay, which together represented 84% of global soy production in 2020), and estimations of deforestation risk linked to soy from these areas by trase.earth.

WHAT DATA WAS COLLECTED?

Developed and delivered in partnership with Global Canopy, surveys were sent to companies for self-reporting, with questions focused on deforestation and conversion of natural ecosystems. The surveys were pre-populated with data that companies publicly reported and has been collected as part of the Forest 500 assessments, and/or volumes and deforestation risk estimations from trase.earth. Further guidance on company commitments and actions for their implementation can be found in the Accountability Framework

Companies were invited to review, update and add to the information before publication and were provided detailed guidance on how to do so.

Only nine of the traders responded and provided supplementary information. The commitments of those that didn’t respond were identified based on publicly available information collected by Forest 500 where possible and additional desk-based research. 

Consult the scores of the assessed companies here

 

The scorecard assesses 22 of the largest soy traders on their actions to end soy-driven deforestation, conversion and human rights abuses

Scoring criteria

1.Set and strengthen goals
30 Points | 30% OF TOTAL

This section focuses on the commitments made by the traders on deforestation and conversion, the traceability of their soy supply, and human rights abuses in their supply chains, and whether these commitments cover all of their operations and procurement.

Protection of forests and other natural ecosystems - 53.33%

Soy traders must have a time-bound commitment to zero deforestation and conversion in their supply chains, with a cutoff date of 2020 at the latest (in alignment with the New York Declaration on Forests and target 15.2 of the UN Sustainable Development Goals). This commitment should apply to all geographies in which the company operates and to the entire corporate group. The commitment should have a clear target date for full implementation, which should be as soon as possible but no later than 2025, and interim milestones.

Key indicators
Existence of public deforestation/conversion commitments 2 Points
Does the company have a public commitment to 100% no-conversion production/sourcing (as defined by AFi), regardless of market demand?
Cutoff dates 6 Points
Amazon
Cerrado
Gran Chaco
Pampas
Chiquitania
Espinal
Pantanal
Danube Delta
Northern Great Plains
Global (all other biomes)
Deforestation/conversion – Scope of commitments 2 Points
All operations, all subsidiaries, all divisions and import markets
All types of soy traded (soybeans, soybean meal and soybean oil)
All regions/biomes
All direct and indirect suppliers
Achievement date 3 Points
How quickly has the company committed to achieving its deforestation/conversion commitments?
When was this target/date last reviewed or updated?
Interim targets and milestones 3 Points
Do the company's commitments to eliminate deforestation and conversion specify time-bound targets and milestones?

Respect for human rights - 26.67%

As deforestation and conversion go hand in hand with human rights abuses, soy traders must commit to respecting internationally recognized human rights, with particular focus on securing the Free, Prior, and Informed Consent (FPIC) of Indigenous peoples and local communities before any activity that may affect their rights, lands, resources, territories, livelihoods and food security. These commitments should apply to all geographies in which the company operates and to the entire corporate group.

Key indicators
Existence of public human rights commitment 2 Points
Does the company have a public commitment to respect internationally recognized human rights (including workers, indigenous peoples and local communities) and ensure this respect equally for all persons and groups?
Human rights - Scope of commitments 2 Points
All operations, all subsidiaries, all divisions and import markets
All types of soy traded (soybeans, soybean meal and soybean oil)
All regions/biomes
All direct and indirect suppliers
Human rights - FPIC 2 Points
Does the company commit to or have a supplier policy that requires suppliers to secure the Free, Prior, and Informed Consent (FPIC) of potentially affected Indigenous peoples and/or local communities before acquiring new interests in land or resources, new developments or expansions?
Is the company's FPIC commitment or policy fully aligned with key elements of an effective FPIC process outlined in the Accountability Framework?
FPIC - Scope of commitments 2 Points
All operations, all subsidiaries, all divisions and import markets
All types of soy traded (soybeans, soybean meal and soybean oil)
All regions/biomes
All direct and indirect suppliers

Traceability - 20%

While traceability alone does not guarantee sustainability, it can help companies understand and improve the sustainability of their own supply chain, and extend support beyond their own supply chain. Soy traders should commit to tracing their supply chain to the farm level in order to be able to verify compliance with their commitments. The commitment should apply to all sourcing in all geographies and the entire corporate group. It should have a clear target date for achievement, which should be as soon as possible but no later than 2025.

Key indicators
Traceability 2 Points
Has the company made a commitment to traceability of the soy it sources? To what level of traceability does the company commit?
Traceability - Scope of commitments 2 Points
All operations, all subsidiaries, all divisions and import markets
All types of soy traded (soybeans, soybean meal and soybean oil)
All regions/biomes
All direct and indirect suppliers
Traceability - Achievement date 2 Points
How quickly has the company committed to achieving its traceability commitments?
When was this target/date last reviewed or updated?
2.Implement ethical supply chains
33 Points | 33% OF TOTAL

Focusing on how the traders implement their commitments throughout their supply chain, this section looks at indicators such as conducting supply chain-wide risk assessments, monitoring suppliers, and verifying compliance and progress.

Company systems and processes - 6.06%

To embed their commitment into their operations and decision-making, traders must develop effective internal processes and systems. Traders must establish senior leadership responsibility and accountability for deforestation/conversion matters, including at CEO and/or board level. To enable grievances to be addressed early and remediated directly, all companies should establish an effective grievance mechanism that is readily accessible to individuals and communities.

Key indicators
Board oversight 1 Point
Does the company’s board have a committee or is there a high-level management position that is formally focused on deforestation/ conversion-related issues?
Executive compensation 0 Points
Does the company link executive compensation to deforestation-related issues?
What is the percentage of pay at risk?
Grievance mechanism 1 Point
Does the company have grievance mechanisms in place to identify and remedy adverse social and environmental impacts linked to their operations and/or supply chain? What is the nature of the grievance mechanism used by the company (own mechanism, that of external entity, etc.)?
Is it publicly available to all stakeholders?
Is there a description of the process and procedures that are followed when a grievance is raised?
Are grievances and responses or resolutions published?
What is the nature of the grievance mechanism used by the company (own mechanism, external entity, etc.)?

Supply chain assessment - 6.06%

Soy traders must transparently identify deforestation and conversion as a business risk, and conduct regular risk assessments covering all volumes of soy produced and sourced by the company. Soy traders must also ensure that all of their operations and sourcing comply with any relevant laws and should conduct assessments to ensure that this is the case.

Key indicators
Risk assessment and due diligence 1 Point
Does the company conduct risk assessments related to deforestation/conversion risk? Are the results of the assessments made publicly available?
Are the results published?
Compliance with applicable laws 1 Point
Does the company conduct assessments to ensure that their operations and supply chains comply with all applicable laws?
Do these assessments include potential future changes to regulatory frameworks?

Managing for supply chain compliance - 57.58%

Traders must have robust supplier management and engagement systems to ensure progress towards zero-deforestation and conversion commitments and resolve issues promptly and effectively. They must: embed deforestation and conversion criteria into trading and procurement decisions; publish clear criteria for exclusion of non-compliant suppliers; and engage with non-compliant suppliers to set action plans to improve. Prior to any land development or acquisition, companies must conduct or support suppliers to conduct social and environmental impact assessments in alignment with Accountability Framework guidance. Companies must provide remedy to (or require and support all suppliers that own or manage land to provide remedy to) any harms in case of negative social impacts associated with the company's prior actions or land management practices and restore any land converted after the cutoff date. This is in line with international human rights laws, national laws and many voluntary commitments which affirm the right to an effective remedy when adverse impacts to human rights occur.

Key indicators
Embedded into decision-making 2 Points
Does the company have a policy or process for procurement teams and trading desks to assess compliance against its commitments and include that in decision-making?
Do trade desks and procurement managers have a list of non-compliant suppliers that should be excluded due to their involvement in deforestation?
Operations and supplier engagement: thresholds 2 Points
Does the company have specific thresholds/triggers for supplier suspension in case of non-compliance?
Operations and supplier engagement: time-bound plans 5 Points
Does the company set time-bound action plans for non-compliant operations and suppliers in order to address and remedy non-compliance?
If yes, does the company sets time-bound action plans for farm-level suppliers, including indirect suppliers?
Engagement with non-compliant suppliers 2 Points
Does the company offer support to its suppliers to help them achieve compliance with commitments? What percentage of the company's supply chain volume are represented by suppliers currently in receiving that support?
Type of support:
How many of the company's suppliers are currently receiving this support?
What percentage of the company's volume is represented by suppliers that are supported?
Supporting expansion of soy on cleared land 0 Points
Does the company provide technical and/or financial support to soy producers to encourage expansion of soy on already cleared land?
How many producers are currently receiving this support?
Environmental and social impact assessments 4 Points
Does the company conduct environmental and social impact assessments for any new site development or land acquisition conducted by the company?
Are suppliers required to conduct environmental and social impact assessments for new site development or land acquisition?
Remediation and restoration 4 Points
For company-owned or managed land: Does the company provide remedy to social impacts?
For company-owned or managed land: Does the company restore land deforested after the cut off date?
For suppliers: Are suppliers required to provide remedy to social impacts?
For suppliers: Are suppliers required to restore land converted after the cutoff date?

Supplier requirements - 12.12%

Soy traders should require that their suppliers take action across their entire operations (and not only on the volumes supplied to the trader) to eliminate deforestation, conversion, and human rights abuse from soy production. Action to move supplier practices as a whole prevent leakage and cascade best practices up the supply chain.

Key indicators
Supplier commitment requirements 4 Points
Zero deforestation and conversion commitment
Human rights commitment covering both workers rights and rights of Indigenous peoples and local communities
Commitment to respect FPIC of local communities

Monitoring and verification - 18.18%

Soy traders must diligently monitor direct and indirect suppliers—including farms of origin—against deforestation and conversion requirements. Monitoring protocols should be fully transparent and third-party verified, and civil society organizations should participate in their development.

Key indicators
Direct supplier monitoring 1 Point
Does the company monitor direct suppliers (e.g., soy producers) against deforestation and conversion requirements?
Are results made publicly available?
Indirect supplier monitoring 1 Point
Does the company monitor intermediaries (e.g. aggregators, other traders, brokers, silo owners, cooperatives, etc.)?
Are results made publicly available?
Indirect supplier monitoring – farms of origin 1 Point
Does the company monitor intermediaries' farms of origin (e.g. original producers of soy purchased by intermediaries) against its deforestation and conversion requirements?
Are results made publicly available?
Quality of monitoring protocols 3 Points
Have civil society organizations participated in the development of monitoring protocols?
Are monitoring protocols made publicly available?
Are supplier monitoring reports/outcomes third-party verified?
3.Report progress
20 Points | 20% OF TOTAL

This scoring section looks at whether the traders report on their progress towards their deforestation/conversion or traceability commitments.

Outcomes: deforestation and conversion - 75%

Soy traders must act swiftly to achieve their commitments and reduce the volume of soy produced on converted land to zero. They must have robust, independently verified processes to measure their progress, and report this publicly and clearly.

Key indicators
Compliance with deforestation and conversion commitments: reporting 8 Points
Has the company reported on progress on commitment implementation in 2019 or 2020?
In the latest reporting cycle, what percentage of soy volume in the company's operations or supply chain was compliant with no deforestation/conversion standards?
Compliance with deforestation and conversion commitments: verification 4 Points
How is this compliance percentage calculated?
Is the company's progress reporting independently verified?
Exposure to deforestation risk in South America 3 Points
Brazil
Bolivien
Argentina
Paraguay

Outcomes: traceability - 25%

Soy traders must publicly report on the traceability of their supply chains, clearly demonstrating the proportion of their volumes that are traceable, and the level. They must strive to reach 100% traceability to the farm as soon as possible.

Key indicators
Compliance with traceability commitments - reporting 3 Points
Does the company publicly report on traceability of its soy supply chains? What percentage of soy in the company's supply chain is traceable to the country of origin? To a sub-national origin (e.g. state or municipality)? To the farm?
Percentage traceable to second-level jurisdiction (e.g. municipality level)
Percentage traceable to farm
Compliance with traceability commitments - verification 2 Points
How is this compliance percentage calculated? Is the company's progress reporting independently verified?
Calculation methods
4.Increase transparency
11 Points | 11% OF TOTAL

Increasing transparency of soy supply chains is critical in ensuring that they are free from deforestation/conversion and human rights risks. This scoring section assesses whether traders are transparent on their exposure to deforestation through soy.

Company information and exposure - 72.73%

It is critical that soy traders increase their transparency on key pieces of company information to enable stakeholders to understand their exposure to deforestation and conversion risk. This includes volumes sourced by subnational area, supplier lists and location, and further information pertaining to the company’s operations.

Key indicators
Volumes and sourcing area 3 Points
Does the company disclose volumes of soybeans purchased annually? Are they disaggregated by country and by biome/subnational sourcing area?
Total volume
Brazil: Cerrado
Brazil: Amazon
Brazil: Matopiba
Brazil: Pantanal
Brazil: Atlantic Forest
Argentina: Gran Chaco
Argentina: Pampa
Argentina: Espinal
Paraguay: Gran Chaco
Paraguay: Atlantic Forest
Bolivia: Chiquitania
Bolivia: Amazon
US: Northern Great Plains
Europe: Danube Delta
Others
Volumes produced on own farms/direct sourced/third-party sourced 1 Point
Produced on own farms
Sourced directly from producers
Sourced from other third-party suppliers
Company operations 1 Point
Does the company publicly disclose the location of company-owned processing facilities?
Supplier and farm of origin list 3 Points
For direct suppliers
For indirect suppliers
Farm of origin

Certification - 9.09%

If soy traders use certification schemes—either third-party schemes or their own—this must be made publicly available in full. This includes making the company’s own standards publicly available in their entirety, as well as disclosing percentages of volumes covered by certification schemes.

Key indicators
Certification 1 Point
Certification scheme
Certified volume under credits
Certified volume mass balance
Certified volume segregated
Total certified volume
Total certified volume as percentage of all volumes
If the company has its own certification scheme, is it made publicly available?
Traceability process
Supplier requirements
Cutoff date
Are at least 50% of volumes sourced under either identity preserved or segregated chain of custody models?

Policy advocacy - 9.09%

In addition to bold actions within and beyond their own supply chains, traders should advocate for regulatory frameworks that enable progress towards supply chains free of deforestation, conversion, and human rights abuses. Traders should be transparent about any political contributions and campaign expenditures in all relevant jurisdictions.

Key indicators
Political Disclosures 1 Point
Does the company disclose all of its political contributions and campaign expenditures at all jurisdictional levels?
Advocacy 0 Points
Does the company actively advocate for regulatory frameworks that enable progress towards soy supply chains free of deforestation, conversion, and human rights abuses?

Survey Response - 9.09%

Did the company respond to the scorecard survey?

Key indicators
Response 1 Point
Did the company respond to the scorecard survey?
5.Collaborate for change
6 Points | 6% OF TOTAL

The final scoring section considers whether the soy traders collaborate or partner with other stakeholders on improving the sustainability of soy production and procurement beyond their own supply chains.

Collaborate for change - 100%

Soy traders should constructively participate in collaborative initiatives in both producer and consumer countries to support large-scale change for deforestation- and conversion-free soy. This participation should go beyond commitments for the company's own supply chain, by requiring company participation with demonstrable action intended to increase the sustainability of the wider soy industry.

Key indicators
Collaboration in producer countries 3 Points
Is the company a member of biome-specific working groups to tackle deforestation and conversion for soy (and other commodities) in the biomes it sources from?
Initiatives
Collaboration in import markets 3 Points
Is the company a member of initiatives in import markets that advocate for zero deforestation and conversion in soy supply chains (or across commodities)?
Initiatives