Sourcing soy responsibly
Sourcing soy responsibly
Last updated: 19/08/2022
Soy is a globally traded commodity used in a wide range of food and non-food products, from soy milk to biofuels. However, the principal use of soy is animal feed, which accounts for around 75% of global production. As a high-quality vegetable protein, soy is used in animal feed for its nutritional benefits. Soy is grown in both temperate and tropical climates with the United States and South America (e.g., Brazil, Argentina, Paraguay) being the two main production regions. China is the largest consumer of soy, with the EU being the second largest.
The Soy Sustainability Challenge
The soy that is sold as part of our products – such as soy milk, tofu, and other vegetarian meals – contributes around 1% of our soy footprint. In contrast, around 99% is present via animal feed that is used to produce the livestock-based products we sell, such as chicken and cheese. Mapping these supply chains is inherently more complex as the companies we buy from often do not handle soy themselves, but instead buy products that were fed soy at an earlier stage in the supply chain, away from their own operations.
As the world population increases, so too will the global demand for meat and other animal proteins such as fish, eggs, and dairy. The increasing demand for animal feed to support this growth is driving an expansion of soy cultivation - leading to the loss of forests and other native vegetation in the Amazon and Cerrado in South America.
To stop this trend, the Amazon Soy Moratorium was established in 2006. This Moratorium, led by industry and civil society, was a key milestone in halting further loss of the Brazilian Amazon for soy cultivation. However, the conversion of native vegetation for soy continues in other important ecosystems such as the Cerrado, the Gran Chaco and Atlantic Forest.
The Brazilian Forest Code established in 2012, aims to protect Brazil’s natural ecosystems including the Amazon and the Cerrado. While compliance with the Forest Code is an important starting point, current regulation on its own is insufficient to protect the Cerrado. Just 8% of the Cerrado is officially protected – less than 3% under strict protection - and landowners are required to conserve just 20 per cent of their land, a rule that unfortunately has not been enforced in many regions.
As part of the Consumer Goods Forum (CGF), Tesco committed to the target of zero-net deforestation in our sourcing of soy by 2020. As part of this target we produced an ambitious UK Zero Deforestation Soy Transition Plan. Tesco is proud to have achieved 100% compliance with our UK Zero Deforestation Soy Transition Plan and our Zero Deforestation Soy Sourcing requirements since 2019/20 but we know there’s more to do. We have also been working both within and beyond our own supply chain, at an industry level and with other stakeholders, including NGOs and governments, because we recognise that developing the right conditions for a sustainable soy market requires effective collaboration.
Since 2018 Tesco has been working towards a ground-breaking target of sourcing 100% of soy from Verified Deforestation and Conversion Free Sourcing Areas. Achieving such an ambitious target is challenging and complex so we work on three key levers: (i) convening and aligning industry, (ii) engaging directly with our suppliers and (iii) supporting innovative mechanisms to reward soy growers for leaving their forests standing.
Our Zero Deforestation Soy Sourcing requirements and UK Zero Deforestation Soy Transition Plan have been designed to ensure that all of our suppliers are well positioned and aligned with Tesco for the upcoming transition to sourcing only deforestation and conversion free soy by 2025. With respect to our business in Central Europe we are actively building capacity amongst key suppliers in the soy supply chain so that they are also in a position to take forest positive action in sourcing soy.
Overall, our approach to zero deforestation soy is based on our Improve-Transform-Advocate approach to environmental sustainability.
Improve: achieving sustainable soy in our supply chain through incremental change
Tesco has developed industry leading Zero Deforestation Soymeal Sourcing requirements over a number of years. These requirements use the CGF Soy Ladder to define reporting scope and are intended to: achieve zero deforestation soymeal in our supply chain, promote the development of more effective options for sourcing zero deforestation soymeal, promote an industry transition plan for the sourcing of zero deforestation soymeal, and support the development of resilient agricultural supply chains for livestock production.
Each year we engage all our direct suppliers on commodity reporting for soy, along with other commodities, through a collective approach with other retailers. This process is conducted by an independent third party – 3Keel – who collect and validate supplier data allowing us to report for each commodity.
All of our direct/tier 1 suppliers of livestock-based products (e.g., dairy, chicken) are required to report on their annual supply to our company in one of two ways: (i) Livestock producers – use of soy in animal feed for our production (direct soy volume), (ii) Manufacturers – volume of livestock-based products supplied to our company. Where the amount of soy used is not known, we apply relevant conversion factors to estimate our soy use based on the country of production. Origin and deforestation free certification claims are assessed against our Soy Roadmap to validate supplier declarations.
Phase 1 and 2 of our UK Zero Deforestation Soy Transition Plan outlines how we drive incremental change in our supply chain. Over a number of years, we’ve made progress by certifying soy in our supply chain with increasingly stringent standards. In the 2021/22 reporting year we mandated that all soy in our supply chain was certified with RTRS Regional Credits at a minimum. These area-focused credits ensure that Tesco’s investment goes back to support sustainable farmers in the sourcing areas where our soy comes from.
In the case of upstream suppliers, for the past four years we have engaged in detailed mapping and capacity building in our supply chain to improve the disclosure we have from the upstream actors. We began this process with our UK supply chain first, where we now have achieved 39% disclosure of the traders present in our soymeal supply chain. We also recognise that with the difficulties throughout the industry with transparency of origin, we are unable to give an accurate figure to represent how much of our Soy supply is considered to be "low-risk".
At the same time, in 2020 we spearheaded the creation of a new Soy Transparency Coalition (STC) to consolidate the ask coming from livestock producers, food manufacturers, brands, and retailers through a standardised questionnaire, assessment and engagement process. The success of this group led to the first private disclosure of soy sourcing origins for a trader for their whole supply chain. In July 2021 we communicated the requests of the Forest Positive Coalition to 100% of the known and likely indirect companies in our supply chain via the STC. Whilst Tesco does not publicly disclose the performance of upstream suppliers/ traders, we do, through the Soy Transparency Coalition (STC), apply our requirements to the STC scorecard template to use as an indicator of their progress.
According to the reporting of our Tier 1 suppliers the major traders present in our supply chain were known and disclosed are Cargill, Cefetra and ADM who collectively represent around 23% of soy in our supply chain. We engage with traders through the STC process mentioned above.
Transform: encouraging innovative solutions
Phase 3 of our UK Zero Deforestation Soy Transition Plan outlines our ambition to contribute to the development of jurisdictional approaches, which will transform the industry’s approach to achieving zero deforestation soy production by creating verified deforestation and conversion free sourcing areas. To accelerate this process, we are pioneering a direct investment model known as the Responsible Commodities Facility, this is designed to support soy farmers located in the Brazilian Cerrado who commit to growing soy without deforestation or conversion.
Since 2021 Tesco has co-chaired, the Landscape Working Group of the Forest Positive Coalition which culminated in several projects including the Responsible Commodities Facility (RCF) being put forward as prospective Forest Positive Landscape projects. The RCF is a pilot financial facility that will make low interest loans available to Brazilian soy farmers who agree to growing soy without deforestation or conversion. Tesco has led on designing the model for the retailer landscape investment and provided £5m investment in the Responsible Commodities Facility, which will be formally launched in the coming months, please visit the RCF website for more details.
In tandem we are raising our expectations of Tesco suppliers via our updated Zero Deforestation Soymeal Supplier Requirements, which now stipulate that all suppliers using soy need to develop and share detailed roadmaps on how they will comply with our 2025 zero deforestation and conversion free soy sourcing target.
Advocate: mobilising others for action
In order to achieve our ambitions, we will continue to work with others and engage key stakeholders in producing and consuming countries. We are a founding signatory of the Statement of Support for the Cerrado Manifesto, co-chair working groups of the Consumer Goods Forum Forest Positive Coalition and have an active role as a member of the Soy Transparency Coalition and Retail Soy Group amongst others. Through these groups we collaborate with international and local stakeholders on industry transformation to halt deforestation in the Brazilian Cerrado and in other South American sourcing countries.
We also make our suppliers aware of our commitments and the partners we work with, such as the Forest Positive Coalition’s Approach and its implementation via the Tesco Supplier Network, a community of over 10,000 incl. all suppliers.
In 2021 Tesco and other leading UK companies launched the UK Soy Manifesto. Tesco, alongside WWF, Efeca, Earthworm and Mighty Earth spearheaded the development of the UK Soy Manifesto, which was launched by Tesco CEO Ken Murphy in November 2021 during COP26. The Manifesto sets out requirements to deliver deforestation and conversion free soy to the UK by 2025. Manifesto signatories currently represent close to 60% of soy used in the UK. Read more about the UK Soy Manifesto here.
Key Soy Facts & Statistics
- Global production of soybean is around 350 million tonnes
- Tesco Group represents <1% of global soybean use.
- More than ¾ of global soy production is fed to animals
- Tesco’s 2021 Group soymeal footprint was 514,003 tonnes
- 100% of these soy volumes met our Zero Deforestation Soy Transition Plan requirements through being certified to a Tesco approved scheme.
- 46% of the soy meal volumes declared through our annual supplier reporting process were declared to have been sourced from a specific production region(s).
- 21% of the soymeal volumes declared to be from South America, or with no single declared origin, were claimed to be certified to a physically deforestation and conversion free standard (either Mass Balance or Segregated, as listed in the FEFAC benchmark)
- 39% of our soy meal volumes were linked to a disclosed trader (2021)
- 20% of our suppliers who were involved in the soy reporting have a zero deforestation and conversion free policy including soy used in their supply chain, and further 15% are in the process of developing one.
- 13% of the suppliers involved in the reporting said that they have deforestation and conversion free soy as a contractual requirement with their suppliers.
- In common with other businesses in the UK the upstream soy supply chain is dominated by a small number of traders namely Cargill, Cefetra and ADM
Whilst we have ambitious aims, Tesco also recognises that the transition of a global industry like the soy sector cannot happen over-night without huge impacts on individuals, livelihoods, and businesses. This is why we are working closely with many partners including suppliers, NGOs like WWF, advisors, and other retailers to develop and implement an industry wide transition plan.