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Theme 2: Sustainable production and development

In 2022, USD 6.1 trillion went to the 350 companies with the highest exposure to tropical deforestation, including almost USD 530 billion invested in companies without a single zero deforestation commitment. Financial institutions can help combat deforestation and promote sustainable commodity production by instituting their own commitments to eliminate deforestation in their portfolios. However, across the zero deforestation commitments of the 150 financial institutions with the most exposure to, and influence on tropical deforestation, the average commitment strength score under Global Canopy’s Forest 500 assessment is only 13%, a decline from the average commitment strength score of 20% in 2020. 
The commitment strength score assesses critical components of financial institution commitments, such as whether they are time bound, apply to all financing, and if clients or holdings are required to monitor their operations or suppliers. 

In 2022, USD 6.1 trillion went to the 350 companies with the highest exposure to tropical deforestation, including almost USD 530 billion invested in companies without a single zero deforestation commitment. Financial institutions can help combat deforestation and promote sustainable commodity production by instituting their own commitments to eliminate deforestation in their portfolios. However, across the zero deforestation commitments of the 150 financial institutions with the most exposure to, and influence on tropical deforestation, the average commitment strength score under Global Canopy’s Forest 500 assessment is only 13%, a decline from the average commitment strength score of 20% in 2020. 
The commitment strength score assesses critical components of financial institution commitments, such as whether they are time bound, apply to all financing, and if clients or holdings are required to monitor their operations or suppliers. 

Mining for commodities such as gold and coal is a driver of permanent tree cover loss and has increased in tropical rainforests in recent years. At a global scale, direct deforestation from extractive industries is minor, estimated to account for between 1.3 and 3.3% of deforestation in tropical forests. However, extractive industries’ indirect impacts on forests and other natural ecosystems are estimated to be much larger than their direct impacts. Furthermore, mining-related direct deforestation is heavily concentrated in certain highly biodiverse biomes and countries, where the impact on ecosystem services and local communities is significant.  
Corporate transparency on forest risks remains very limited in the mining and extractives sectors. Companies reporting through CDP in 2022 saw small signs of improvement in adopting commitments and policies to reduce or avoid biodiversity loss. However, this improvement is largely due to the composition of reporting companies (10 companies that reported in 2021 failed to do so in 2022). In addition, the quality and effectiveness of these policies remains unclear due to a lack of specificity in their design. 

Mining for commodities such as gold and coal is a driver of permanent tree cover loss and has increased in tropical rainforests in recent years. At a global scale, direct deforestation from extractive industries is minor, estimated to account for between 1.3 and 3.3% of deforestation in tropical forests. However, extractive industries’ indirect impacts on forests and other natural ecosystems are estimated to be much larger than their direct impacts. Furthermore, mining-related direct deforestation is heavily concentrated in certain highly biodiverse biomes and countries, where the impact on ecosystem services and local communities is significant.  
Corporate transparency on forest risks remains very limited in the mining and extractives sectors. Companies reporting through CDP in 2022 saw small signs of improvement in adopting commitments and policies to reduce or avoid biodiversity loss. However, this improvement is largely due to the composition of reporting companies (10 companies that reported in 2021 failed to do so in 2022). In addition, the quality and effectiveness of these policies remains unclear due to a lack of specificity in their design. 

Enhancing rural livelihoods depends on eliminating rural poverty. While rates of rural poverty have decreased in recent years, extreme poverty still poses a major challenge in rural areas, especially in countries such as South Sudan, Honduras, and Zambia, where over 50% of the rural population lives below the national poverty line. Reducing rural poverty is particularly important in the context of climate change, since climate-smart, resilient agriculture can require significant up-front investments, expensive inputs, and higher implementation costs – additional expenses that many farmers, particularly smallholder farmers, cannot afford without additional income or financial support. 

Enhancing rural livelihoods depends on eliminating rural poverty. While rates of rural poverty have decreased in recent years, extreme poverty still poses a major challenge in rural areas, especially in countries such as South Sudan, Honduras, and Zambia, where over 50% of the rural population lives below the national poverty line. Reducing rural poverty is particularly important in the context of climate change, since climate-smart, resilient agriculture can require significant up-front investments, expensive inputs, and higher implementation costs – additional expenses that many farmers, particularly smallholder farmers, cannot afford without additional income or financial support. 

Policies and programs to make agricultural production more sustainable must be paired with broader interventions to alleviate hunger and food insecurity, working towards the United Nations Sustainable Development Goal 2.1 to ensure all people have access to safe, nutritious, and sufficient food all year round by 2030. Unfortunately, since the development of the Sustainable Development Goals in 2015, the prevalence of moderate or severe food insecurity has been moving in the wrong direction. As of 2022, 2.4 billion people (30% of the global population) were moderately or severely food insecure. This number has remained steady since 2020, after increasing significantly between 2019 and 2020 at the onset of the COVID-19 pandemic.  

Policies and programs to make agricultural production more sustainable must be paired with broader interventions to alleviate hunger and food insecurity, working towards the United Nations Sustainable Development Goal 2.1 to ensure all people have access to safe, nutritious, and sufficient food all year round by 2030. Unfortunately, since the development of the Sustainable Development Goals in 2015, the prevalence of moderate or severe food insecurity has been moving in the wrong direction. As of 2022, 2.4 billion people (30% of the global population) were moderately or severely food insecure. This number has remained steady since 2020, after increasing significantly between 2019 and 2020 at the onset of the COVID-19 pandemic.  

Building climate resilience is crucial for enhancing livelihoods, as well as reducing poverty and addressing other inequalities that climate change will otherwise intensify. Well-chosen adaptation actions can also help to avoid future climate-related losses and even provide strong economic returns. But to build climate resilience equitably and effectively, countries must develop plans, strategies, laws, and policies to guide their adaptation actions, as well as access the finance required to implement them.  
As of August 2023, 168 countries – or 85% – had at least one national adaptation planning instrument in place. Of the 29 countries without an adaptation planning instrument in place, 14 are in the process of developing one and five are pursuing funding to support their adaptation planning. These adaptation planning instruments include national adaptation plans, adaptation communications, national climate change laws and policies, and national communications.  

Building climate resilience is crucial for enhancing livelihoods, as well as reducing poverty and addressing other inequalities that climate change will otherwise intensify. Well-chosen adaptation actions can also help to avoid future climate-related losses and even provide strong economic returns. But to build climate resilience equitably and effectively, countries must develop plans, strategies, laws, and policies to guide their adaptation actions, as well as access the finance required to implement them.  
As of August 2023, 168 countries – or 85% – had at least one national adaptation planning instrument in place. Of the 29 countries without an adaptation planning instrument in place, 14 are in the process of developing one and five are pursuing funding to support their adaptation planning. These adaptation planning instruments include national adaptation plans, adaptation communications, national climate change laws and policies, and national communications.  

Extension services play a vital role in equipping farmers with the necessary knowledge and technical support to develop profitable, sustainable agricultural practices, including those that increase productivity while reducing greenhouse gas emissions. An important metric for assessing the effectiveness of these services is the proportion of farmers who benefit from continuous and reliable access to them. Over time, there has been a notable increase in the percentage of farmers with access to such services in various countries. An IFPRI report, for example, finds that Bangladesh witnessed an increase from 10% in 1980 to 50% in 2000; India saw an increase from 5% in 1960 to 25% in 2000; and Kenya experienced growth from 5% in 1960 to 20% in 2000. In 2019, a substantial 60% of farming households in Ethiopia reportedly had access to these extension services. The availability of these services can vary significantly from one country or region to another. It is important to ensure that farmers have consistent and lasting access to extension services to enhance their agricultural productivity sustainably and overall well-being.  

Extension services play a vital role in equipping farmers with the necessary knowledge and technical support to develop profitable, sustainable agricultural practices, including those that increase productivity while reducing greenhouse gas emissions. An important metric for assessing the effectiveness of these services is the proportion of farmers who benefit from continuous and reliable access to them. Over time, there has been a notable increase in the percentage of farmers with access to such services in various countries. An IFPRI report, for example, finds that Bangladesh witnessed an increase from 10% in 1980 to 50% in 2000; India saw an increase from 5% in 1960 to 25% in 2000; and Kenya experienced growth from 5% in 1960 to 20% in 2000. In 2019, a substantial 60% of farming households in Ethiopia reportedly had access to these extension services. The availability of these services can vary significantly from one country or region to another. It is important to ensure that farmers have consistent and lasting access to extension services to enhance their agricultural productivity sustainably and overall well-being.