Introduction

Investors have long understood that deforestation and natural ecosystem conversion pose significant risks to their portfolios. Despite years of engagement, substantial work remains to address these issues. This report highlights the business imperative for corporate participation in landscape initiatives, providing a framework for investors to manage nature risk at scale, particularly within the food, agriculture, and forestry sectors. In 2024, 341 companies disclosed engagement in 574 landscape initiatives through the CDP questionnaire. Landscape initiatives manage environmental and social risks across defined geographies, such as sourcing regions or watersheds, helping companies build resilient supply chains collectively. No single company can manage these systemic risks alone, as they extend beyond the boundaries of individual farms or facilities.

Business opportunities

Participating in landscape initiatives helps companies reduce risk and strengthen long-term value. These initiatives allow companies to expand risk mitigation efforts across entire production areas, which is critical where forest loss or social conflicts create severe downstream impacts. For example, Nestlé SA participates in the Southern Central Forest Spine Landscape in Malaysia, which provides 8% of the company’s palm oil. By engaging with 98 of 108 mills in the landscape, Nestlé prevents palm oil linked to deforestation from entering its supply chain. International Paper Company and Sylvamo Corporation have invested in the Mogi Guaçu River basin restoration in Brazil to protect water quality and availability after forest loss triggered a severe drought.

Enhancing supply chain resilience is a primary driver for involvement; one in 3 companies in landscape initiatives targets specific landscapes to secure strategic commodity supply and build resilience at scale. JDE Peet’s NV has reached over 835,000 farmers since 2015 through its Nature Transition Plan, mitigating the risk of disruption in its supply chain. Mondeléz International reports that 91% of its cocoa disclosure volume is covered by the Asunafo-Asutifi Landscape Initiative in Ghana, which advances climate-resilient cocoa production. Furthermore, the average commodity disclosure volume covered by credible landscape initiatives stands at 20.5%.

These initiatives also offer cost-efficient supply chain actions. One in 5 companies cited landscape initiatives as supporting commodity traceability and monitoring systems. The global non-profit IDH estimates that shared data systems can lower the cost of compliance with the European Union’s Deforestation Regulation (EUDR) to a third of what is required for individual farm-by-farm monitoring. Additionally, companies use these platforms to address regulatory compliance and voluntary disclosure requirements, including alignment with the Taskforce on Nature-related Financial Disclosures (TNFD), the Science Based Targets initiative (SBTi), and the Corporate Sustainability Reporting Directive (CSRD).

Maintaining a social licence to operate is another critical benefit. 13% of companies disclose that their engagement protects and recognises rights to land and resources while reducing land-related conflicts. Bumitama Agri Ltd. used the Bumitama Biodiversity and Community Project to facilitate participatory land use planning in Indonesia, reducing future risks of conflict with local communities. Similarly, Musim Mas Group supports the Siak Pelalawan Landscape Programme, covering 2.2 million hectares, to achieve sustainable palm oil production and improve smallholder livelihoods. The median investment in credible landscape initiatives among companies is $300,000.

Engagement considerations

Investors should evaluate company involvement based on materiality and initiative maturity. Materiality is determined by the severity of risks, such as deforestation or social conflict, and the company’s exposure to them. High-risk commodities typically include timber, palm oil, soy, cattle, cocoa, rubber, and coffee. Good practice is demonstrated by Unilever, which focuses on palm oil sourcing regions key to its supply chain, and Archer Daniels Midland, whose partnership with Produzindo Certo covers 25% of its soy volumes. Maturity is assessed against four core criteria: scale, multistakeholder governance, collective goals and actions, and collective monitoring frameworks. The average size of a landscape initiative that companies participate in is nearly 5 million hectares. Supporting nascent initiatives is also recommended, as early investment can play a catalytic role in managing corporate risks.

Engagement questions

To ensure impacts and credibility, investors are encouraged to ask companies how their participation supports the resilience of their business model and contributes to overarching deforestation, nature, or climate targets. Key questions include what KPIs are used to determine if an initiative is relevant, how landscape-level risks factor into sourcing strategies, and what percentage of sourced commodities originates from the landscape covered by the initiative. For companies not yet participating, investors should ask how landscape initiatives could complement current risk management strategies. Finally, understanding the credibility of involvement requires asking about the stakeholder groups involved in initiative design and whether the initiative upholds standards of respecting the rights of Indigenous Peoples and local communities.