TOPSHOT - Aerial view of an area of Amazon rainforest deforested by illegal fire in the municipality ... More of Labrea, Amazonas State, Brazil on August 20, 2024. . (Photo by EVARISTO SA / AFP) (Photo by EVARISTO SA/AFP via Getty Images)AFP via Getty Images In boardrooms around the world, as risk managers fixate on geopolitical shocks, supply chain disruptions, and inflation—one critical threat remains off the radar: deforestation. Despite trillions of dollars at stake, forest destruction—and the corporate role in driving it—is still widely treated as a peripheral issue. The majority of companies continue to treat deforestation as somebody else’s problem, not a material business risk. The recently released Forest 500 report from Global Canopy exposes this neglect, revealing a widening gap between corporate promises and actual progress. Nearly half of the companies assessed have pledged to eliminate deforestation by the end of 2025, but only a small minority are on track. With the deadline only months away, consequences for failure remain unclear. The High Cost Of Inaction The World Bank has warned that deforestation could cause economic losses of $2.7 trillion a year by 2030, undermining carbon storage, crop yields, and ecosystem stability. In Brazil, Amazon degradation could cut agricultural output by $3.5 billion a year. In some developing countries, GDP losses could reach 20%. These losses stem from procurement decisions made by powerful companies. The Forest 500 tracks firms linked to beef, soy, palm oil, timber, cocoa, coffee, leather, and rubber—commodities responsible for over two-thirds of global deforestation. While profits are internalised, the social and environmental costs of disaster response, healthcare, and food insecurity are shifted onto the public. Ultimately, these risks rebound in the form of regulatory fines, reputational damage, and supply chain shocks. In this context, the illusion of profit collapses when the true cost of deforestation becomes visible on the balance sheet. What once looked like efficient margin management increasingly appears as unmanaged risk exposure. Corporate Commitments Are Falling Short Only 3% of the companies assessed have strong, fully implemented deforestation policies. Another 22% show limited progress, while the remaining 75%—including 168 companies—have no public commitments at all.. “The leading companies have published evidence of adequate implementation for all their commodities, taking credible steps to monitor their impacts, engage suppliers and report progress, alongside having strong deforestation commitments in place for all of their commodities too,” said Emma Thomson, Forest 500 and Tracking Lead at Global Canopy. Such leaders include companies like Nestle and Brazil’s Suzano. Yet the laggards include major players like Land O’Lakes, a U.S.-based agricultural cooperative; Parker-Migliorini International, a global meat exporter; and WH Group, the Chinese parent company of Smithfield Foods, the world’s largest pork producer. Each plays a significant role in supply chains that contribute to forest loss, yet none has made public commitments to halt deforestation. The cost of inaction is becoming painfully clear as the urgency of action increases. 2024 was the hottest year on record with wildfires, floods, and heatwaves inflicting billions in damages globally. Forests are not just habitats for biodiversity—they are buffers that stabilize regional and global climates. Scientists warn the Amazon may be nearing a tipping point of irreversible collapse, threatening the water cycles and agricultural lifelines of South America. Deforestation is no longer just an environmental concern—it’s a macroeconomic threat. Cherry-Picking Commitments, Dodging Responsibility Companies are much more likely to take action on deforestation linked to commodities that attract public attention. While palm oil and timber often make headlines, beef and leather—the leading drivers of forest loss—are frequently overlooked. In fact, only 37% of companies exposed to beef have any relevant policies in place. “Public pressure is a huge factor,” Thomson noted, explaining that the lack of awareness around beef and leather results in significantly less scrutiny. To address this, this year Global Canopy launched Floresta 250—a new initiative focused on Brazil’s cattle sector. "About 75% of beef production in Brazil is domestically consumed, so it faces a different set of market pressures compared with commodities which are more extensively globally traded.” Profit Over Planet: The Externalisation Mindset The lack of progress reflects a business model that externalises environmental and human rights costs—until those risks start hitting bottom lines. “A third of companies have no public deforestation commitments at all,” said Thomson. “Ultimately it's about will—what the leaders have achieved shows that with the commitment to act, progress can be made. The Forest 500 is not looking at small family-owned corner shops, by definition these are global heavyweights trading in huge volumes. If they want the capacity to address these issues, they can invest in it.” Worse still, some companies are already backtracking. JBS, the world’s largest meat producer, recently downgraded its 2040 net-zero pledge to an “aspiration.” Across sectors, political pressure, ESG backlash, and shareholder short-termism are eroding hard-won gains in both climate and deforestation action. Traceability - A Weak Link? The EU Deforestation Regulation (EUDR), set to take effect in late 2025, will require companies to prove their products are deforestation-free. But only 30% of upstream companies and just 12% of downstream firms currently have traceability systems in place. “Even in markets that don't have regulation, like China, there is increasing interest in deforestation-free sourcing, with state-owned trader COFCO recently placing its first orders for deforestation-free soybeans,” Thomson noted. “A number of leading investors and financial institutions are increasingly asking questions of companies in their portfolios. We need all of this action to ramp up even further, of course, if we're going to see the change we require.” Without robust traceability, companies cannot claim compliance—or credibility. Despite the availability of traceability tools and clear best practices, 58% of companies assessed in the Forest 500 have no traceability mechanisms at all. “For some time there was also a mistaken belief that supply chains are too complex for meaningful action and data isn't available to enable action,” said Thomson. “But the success of leading companies in making progress, and the advanced frameworks and data sources that have flourished in recent years, shows that this excuse doesn't hold water anymore.” This lack of transparency raises serious questions about whether companies are meeting even their most basic fiduciary duties. With risks ranging from disrupted operations to class-action lawsuits, traceability is no longer optional—it’s essential. “Legal complaints and lawsuits have already been brought against companies,” Thomson said pointing to actions against Cargill and BNP Paribas adding "With regulation like the EUDR in play, this is definitely a space to watch.” Beyond the environmental consequences, the report spotlights an often-overlooked dimension: the human cost of deforestation. Only 6% of companies assessed have comprehensive human rights policies, despite deforestation’s links to land grabs, forced labor, and the violent displacement of Indigenous Peoples. And only 9% have committed to protecting land defenders, those individuals or communities working to protect land, forests, and natural resources from exploitation and environmental destruction. Is Business Ready for Real Accountability? Some companies are making tangible progress. Nestlé has reported that 93% of its coffee supply is now deforestation-free, critically a claim backed by robust on-the-ground monitoring. Brazil’s Suzano has achieved 100% conversion-free certification in its pulp and paper sourcing, an important milestone for one of Latin America’s leading paper manufacturers. Hershey’s is improving cocoa traceability, though it still faces verification gaps. These companies prove that leadership isn’t out of reach—it’s just in short supply. “There were no big surprises but among the new commodities rubber performed badly,” said Thomson. “It’s a key commodity in shoe and tyre production but deforestation isn't high on the agenda for many companies involved in this sector despite the huge impacts and the massive risks it poses.” Newly assessed companies include Decathlon, Hyundai Motor Group, Alfred Ritter GmbH & Co and FinLav SpA, which owns Lavazza coffee. “We added cocoa, coffee and rubber to the mix, along with other forest types, to align with the EUDR,” said Thomson. “These commodities are also driving more and more deforestation, and including them in our assessments now will help push companies to act now before they become larger global drivers of forest loss.” From Rhetoric to Risk Management: What Must Change Voluntary action is no longer enough. Deforestation must be recognised as a business risk equal to climate and human rights issues. Until it is embedded into enterprise risk frameworks, both forests and corporate credibility will continue to fall. “Both sourcing companies and investors can play crucial roles—for instance, the Amazon Soy Moratorium is a sectoral agreement that has been successfully implemented for many years and reduced soy deforestation in the Amazon, through multi-stakeholder action,” said Thomson. “Regulation is critical, but to get success on this we’ll need to deploy the whole toolkit." With COP30 scheduled for Belém, Brazil, in November 2025, attention will again focus on the Amazon and the global promise to halt deforestation by 2030. The Forest 500 report is more than a scorecard—it’s a warning. It’s time for companies, investors, regulators, and consumers to recognise that deforestation is not a distant environmental issue. It’s a live, material risk. And in a warming world, what companies don’t know about their supply chains can—and will—hurt them.