Sustainable timber and deforestation

There are currently multiple overlapping strategies which purport to articulate the UK Government’s ambitions, actions, and objectives for woodland creation. Stakeholders are concerned that it is unclear how the Government’s policy objectives for forestry and the timber sector align with its land use and decarbonisation policies. Furthermore, it is not clear what will replace the England Trees Action Plan when it lapses in 2024 to give long term direction for Government’s goals for woodlands.

Although it has some references to the timber sector, the England Trees Action Plan, intended to be the ‘strategic framework’ for treescapes in England, did not comprehensively articulate a vision for timber production. It has not provided an adequate framework for the forestry sector.

We therefore welcome Defra’s engagement with the forestry, timber and construction sectors in relation to the industry-led National Wood Strategy and through the Timber in Construction working group. It is important that the proposed Timber in Construction Roadmap is published as soon as possible and provides clarity on how the growth of timber, and its use in domestic construction, will be encouraged.

To give the sector greater clarity, we recommend that future strategies for forestry should be fully integrated so as to establish a clear and holistic long-term vision for all woodland creation types. The Government should clearly set out how forestry in England will contribute to the delivery of its policy objectives for timber as well as for nature recovery and climate.

We further recommend that the Timber in Construction roadmap should be closely related to, and developed in conjunction with, the Government’s vision for the forestry sector as a whole. As we recommended in our recent report, Building to net zero: costing carbon in construction, this roadmap must address the afforestation commitments made in the England Trees Action Plan, and the need to demonstrate how timber supply in future decades will help to meet growing demand for timber construction products, in a comprehensive, integrated and strategic way.

Tree planting and woodland creation are vital for delivering many of the Government’s environmental targets and commitments, as well as providing a domestic source of timber. We therefore support the tree planting targets set by the UK Government and welcome the commitments to increase woodland cover in England made in the Environmental Improvement Plan.

We are concerned about the current rate of tree planting. In 2022–23, tree planting rates across the UK were at similar levels to the previous four years and remained below half the rate required to meet the overall target of 30,000 hectares per year by March 2025. At this rate it is extremely unlikely that current tree planting targets for England or the UK will be met. (Paragraph 50) 76 Seeing the wood for the trees: the contribution of the forestry and timber sectors to biodiversity and net zero goals

We recommend that in its response to this report the Government provide an assessment of the progress of tree planting in (a) England and (b) the UK against the targets set by Ministers; set out its latest and most realistic estimate of the numbers of trees likely to have been planted by March 2025, and indicate whether it plans to adopt policies to accelerate the current rate of planting.

To ensure that the nation’s woodlands help to deliver the Government’s ambitions for nature, carbon storage and timber production, several stakeholders have called on the Government to apportion tree-planting targets in line with desired outcomes, to ensure that the right balance of outcomes is achieved from woodland creation. We agree. This initiative could also give the forestry sector and investors clearer direction as to the sort of woodlands which ought to be created under the policy.

In order to give the forestry sector greater clarity, we recommend that following the development of the Land Use Framework, the Government divide its overall tree planting targets into sub-categories for the types of woodland needed to achieve different goals. These targets should be underpinned by the clear, holistic long-term vision common to the timber and forestry sectors which we recommend above. (Paragraph 53) Delivery of tree planting

Forestry England has planted only 303 hectares against its target of 2,000 hectares of new planting between 2021 and 2026. Despite pursing leasehold partnership arrangements, in recent years Forestry England has planted virtually no new woodlands on leasehold land.

Decisive action and a clear delivery plan are required for Forestry England to meet its target of planting 2,000 hectares of new woodland by 2026. We recommend that a plan be prepared by the end of October 2023 and published for transparency, to demonstrate to the public and the private sector that Forestry England is playing its part in meeting the national tree planting targets and in contributing to future timber supply.

The private sector is concerned about the implications of delays to Forestry England restocking on future timber supply. Forestry England is responsible for a significant proportion of domestic timber production and should be appropriately resourced to carry out timely restocking.

In addition to planting new woodland where possible and using good forestry practice to do so, we recommend that Ministers ensure that Forestry England has sufficient resources to restock cleared forest areas as soon as possible, to ensure that Forestry England at least maintains its contribution to future timber supply.

Central government is a major landowner. The Greening Government Commitments commit the Government to identify opportunities to contribute to nature recovery on the Government estate. Woodland creation can be a significant contributor to nature recovery. (Paragraph 70) Seeing the wood for the trees: the contribution of the forestry and timber sectors to biodiversity and net zero goals 77

We recommend that Ministers commission work to identify opportunities for woodland creation on the Government estate, to advance nature recovery further and increase timber production.

Public annual reporting on progress towards the Greening Government Commitments apparently ceased in 2019–20. We recommend that annual reporting of this nature should be re-established as soon as possible, to give assurance to Parliament and the public that the Government is contributing to nature recovery to the fullest extent possible.

The Government is relying on third parties to plant the lion’s share of the trees required to meet its tree planting targets and thus deliver timber production as well as a suite of climate and environmental objectives. It is therefore crucial that the Government is clear on what it requires prospective planters to do, and that it provides competitive and targeted incentives to encourage this. Given that the timber sector is a for-profit sector, it is appropriate that the England Woodland Creation Offer pays public money to incentivise the provision of public goods in the form of ecosystem services and nature restoration. We are nevertheless concerned that prospective planters seeking to plant productive woodlands are deterred from applying for the scheme because of a perception that it does not support productive forestry. The Government must therefore communicate as clearly as possible the fact that the England Woodland Creation Offer—the main grant to incentivise tree planting—can be used to support mixed forests which are commercially productive as well as benefiting nature recovery.

We recommend that in all its forestry and timber strategies the Government must ensure that it is clear to private landowners and the commercial forestry sector that grant schemes are intended to support planting for domestic timber production through the establishment of mixed woodlands planted to the UK Forestry Standard, as well as the establishment of majority native broadleaf woodlands.

To realise the benefits of tree planting, and to avoid detrimental outcomes, it is essential that the ‘right tree in the right place’ principle is followed. The ‘presumption to plant’ principle being developed by the Forestry Commission could be a useful tool to enable ecologically sensitive tree planting and faster approvals, and is likely to reduce the administrative burden entailed in woodland creation so as to encourage private landowners to apply for woodland creation grants.

The reliance on the UK Forestry Standard to ensure the sustainability of planting in areas identified as ‘low risk’ could provide a proportionate risk-mitigation mechanism. For this to operate effectively it is important that Forestry England maintain its monitoring of the compliance of new woodland with the UKFS beyond the establishment stage. We discuss this issue in further detail below.

For transparency, we recommend that the Forestry Commission publish a summary of the analysis underpinning the ‘presumption to plant’ system when details of how the system will work are announced. (Paragraph 97) 78 Seeing the wood for the trees: the contribution of the forestry and timber sectors to biodiversity and net zero goals Sustainable timber production

Against a backdrop of increasing demand, the UK’s softwood timber production is set to peak in the late 2030s before falling back to current levels in the 2040s. Given the UK’s heavy reliance on timber imports and the potential negative impacts that increased UK and global demand could have on the planet’s most ecologically sensitive and biodiverse forests, it is right that the UK should do more to meet a higher proportion of its timber consumption through domestically grown timber. It is unlikely that the UK will be able to fully supply all its timber needs domestically, especially against a backdrop of increasing demand and limited land availability. There is nevertheless scope to increase domestic timber production.

We recommend that the Government set a realistic long-term target for the amount of timber to be produced domestically. This target should be informed by: • the analysis being undertaken to produce Defra’s Land Use Framework; • a comprehensive analysis of the commercial species which need to be planted, and over what area, and • the context of the global timber market, including a realistic assessment of the level of imports still required to meet both the quality and quantity requirements of the UK market.

In tandem with this target, and in line with our earlier recommendations, we recommend that the Government determine the proportion of new woodland to be established under current targets which is to contribute to timber production.

Delivery of the Government’s net zero and nature recovery targets depends on wide- scale woodland creation. The amount of CO absorbed, the levels of biodiversity 2 supported and other benefits or negative effects of woodland creation are all highly variable, depending on where and how woodland is established, the tree species present, site conditions and management.

Planting more conifer trees is needed if domestic softwood production levels are to be maintained or increased. However, a policy to grow productive woodlands to achieve future timber supply and other benefits for nature and climate, are dependent on forests surviving in the medium to long term. Such policies should therefore be developed within an overall strategy which prioritises species diversity and resilience.

New or restocked woodlands planted to the UK Forestry Standard (UKFS) will have lower yields of timber per area. The planting of predominantly broadleaf species in recent decades has reduced the future availability of softwood timber. To ensure the continued availability of softwoods from productive forestry, it is evident that rates of conifer planting compliant with UKFS ought to increase. But increased planting of conifers ought not to be undertaken at the expense of native broadleaf species, given the clear importance of the latter for biodiversity levels. (Paragraph 151) Seeing the wood for the trees: the contribution of the forestry and timber sectors to biodiversity and net zero goals 79

Given the different advantages of different woodland types and species mixes for biodiversity, carbon storage and timber production, to ensure that the benefits of the nation’s woodlands are fully realised, the total area of woodland managed to the UKFS must be increased. Significantly expanding the UK’s woodland cover is necessary not only to compensate for predicted shortfalls in the supply of domestically-produced softwood timber, but also to enhance the resilience of the nation’s woodlands to future pest, disease and climate challenges through increasing the diversity of trees planted.

We recommend that the project board with oversight of the current quinquennial review of the UK Forestry Standard ensure that the revised Standard not only contributes to beneficial outcomes for biodiversity and carbon storage but also supports productive forestry to the fullest extent compatible with climate and nature goals. This overall objective must be supported by the policy instruments available to the Forestry Commission in England and to Defra Ministers. The Commission and the UK Government should seek to work constructively with their counterparts in the devolved administrations and partner forestry agencies to ensure the overall growth of the forest estate managed to the UK Forestry Standard.

The UK Forestry Standard underpins regulation of the sustainability of the nation’s forests and plays an important role in ensuring that renewed efforts to increase timber supply do not repeat the mistakes of the past. Yet the existence of the standard is not proof that the nation’s forests are being managed sustainably. We are concerned by reports that compliance with this important standard is not being monitored throughout the lifetime of England’s forests and reports that Forestry England lacks labour resource to carry out routine monitoring. Without regular monitoring, Forestry England cannot be sure that forests are being managed sustainably to the UKFS beyond the establishment phase.

The Government aims to increase tree-cover expansion at rates not seen for decades in order to deliver a range of ecosystem service benefits. To ensure that these benefits are realised, and to deliver the Government’s vision for increased woodland cover, Forestry England must be resourced appropriately so as to ensure that new woodland is compliant with the UKFS at establishment stage and throughout the lifetime of the woodland.

Given the importance of the UKFS in ensuring that forests are managed sustainably, we recommend that the Forestry Commission establish a programme for the routine monitoring of woodland to ensure that the standard is being adhered to beyond establishment, adopting new technology to aid this, where feasible to do so.

We further recommend that the Forestry Commission urgently review the resources available to Forestry England so as to ensure that it has sufficient resources to ensure the compliance of woodlands with the UKFS. (Paragraph 166) 80 Seeing the wood for the trees: the contribution of the forestry and timber sectors to biodiversity and net zero goals Using domestically grown timber to contribute to reach net zero

We welcome the Government’s aims to increase the uptake of timber in construction. The long-term use of timber in construction offers longer term carbon storage potential than other uses of harvested wood products and therefore has an important role to play in helping the UK to meet its net zero targets.

It is important that domestically-grown timber resulting from the current drive to plant is available for use in construction as far as possible. While there is scope to use UK-grown timber for a wide variety of non-structural purposes, engineered solutions and potentially changes in construction practices are required to allow the use of domestically grown timber structurally. Engineered timber, for example cross-laminated timber, laminated veneer lumber and heat-treated timber, offer opportunities for domestically-grown timber to be used to create structural components and be utilised in construction. We welcome the Government’s support for the development of innovative timber products.

To support the Government’s commitments, we reiterate the recommendation made in chapter 1 that the Timber in Construction roadmap be published as soon as possible. The roadmap must comprehensively address the afforestation commitments made in the England Trees Action Plan and the need for timber construction products.

For UK-grown timber to be used in construction, the Government needs to support the sawmilling sector to transition UK production towards producing a higher percentage of construction grade timber products and engineered timber. Action to support this transition should be specifically set out in the Timber in Construction roadmap.

The Timber in Construction roadmap should consider how Government can incentivise changes in practice to allow the safe use of domestically grown timber in construction, including through the use of innovative engineered timber products.

Growing the market for hardwood in composite products—as an alternative to use for firewood—could utilise broadleaf resources in the UK, with the added benefit of incentivising more broadleaf woodlands to be brought into management. However, growing quality hardwoods remains difficult due to disease and pests, and undermanagement.

We recommend that, as part of the Timber in Construction Roadmap, the Government consider how the future UK market can be served by a greater proportion of domestically grown hardwoods (for example, through engineered timber products).

While imported woody biomass continues to be a major bioenergy feedstock, it is important that biomass used in UK power generation, whether from the UK or overseas, is genuinely sustainably sourced in a way which minimises the impact on forest biodiversity and carbon stocks. The CCC has continually stressed that strengthened governance of bioenergy markets is needed domestically and internationally to manage the risks to sustainable low-carbon production as the global biomass market scales up. (Paragraph 216) Seeing the wood for the trees: the contribution of the forestry and timber sectors to biodiversity and net zero goals 81

The Biomass Strategy, which was promised by the end of 2022, must now be issued as soon as possible. We recommend that the Strategy take a risk-based approach to ensuring the sustainability of biomass use, managing risks on a domestic and a global scale. In preparing the Strategy we recommend that the Government consider the risks associated with life-cycle carbon emissions, land-use trade-offs, impacts on biodiversity and ecosystem service provision, and competition with other uses of biomass, and consider the merits of establishing quotas for, or a moratorium on, the use of the highest risk feedstocks.

The amount of biomass used by the UK power sector should be constrained by the supply of low-carbon sustainable feedstocks, factoring in potential domestic supply and rising trends of bioenergy use globally. The Biomass Strategy should set out and quantify the potential of different biomass sources to deliver energy and explain how sufficient sustainability sourced biomass feedstocks will be found, from where, to meet demand required by BECCS, in line with net zero pathways.

The Government needs to manage risks associated with the sustainability of feedstock supply through its governance framework for biomass, which must be strengthened. Improvements should include: • All biomass used for large-scale power generation in the UK should be required to adhere to the sustainability criteria set by the UK governance framework. The Government should include in its Biomass Strategy a thorough review of the subsidy regime for biomass. • The woody biomass land criteria should stipulate that generators and participants must demonstrate that all of their woody biomass supplied is ‘legal and sustainable.’ • As soon as robust life-cycle carbon assessment methodologies are available, biomass sustainability requirements should include the complete accounting of the life-cycle carbon emissions of using a source of woody biomass, from the carbon stored in the forest, through to the stack emissions.

We echo and endorse the recommendation of the Business, Energy and Industrial Strategy Committee, in its recent report on Decarbonisation of the power sector, that the full lifecycle emissions from BECCS facilities in the UK should be made carbon neutral within a timeframe compatible with the UK’s climate targets.

As demand for biomass feedstock grows globally, sourcing more biomass domestically could increase the security of UK biomass supply. Provided that overharvesting is avoided, bringing a higher proportion of existing forests into active management could provide a source of woody biomass for bioenergy in the UK with added benefits for biodiversity and resilience.

We recommend that the Government conduct an impact assessment of the effects on the delivery the UK’s climate and biodiversity commitments of bringing a higher proportion of existing forests into active management. (Paragraph 229) 82 Seeing the wood for the trees: the contribution of the forestry and timber sectors to biodiversity and net zero goals

Short-rotation forestry and short-rotation coppice crops are currently little used, but demand for them is likely to increase. If they are considered to be significant and necessary bioenergy feedstock sources, their planting must be scaled up sustainably, in line with best forestry practices and limited to an appropriate area of land, so as to minimise competition with food crops.

In the forthcoming Biomass Strategy and Land Use Strategy the Government must determine the capacity of the UK to supply bioenergy feedstock from its forest resources—including forest residues, short rotation forestry and coppicing—analysing the risks of drawing upon these resources and modelling land-use trade-offs, particularly in relation to security of food supply and in the context of the biodiversity crisis

We recommend that the Forestry Commission, as the Government’s experts on forestry, work with Ofgem to share best forestry practice. The objective of this collaboration ought to be to ensure that, should demand for domestic wood biomass in energy markets increase, the regulatory framework for bioenergy feedstocks derived from forestry crops and silvicultural activities is developed in line with principles of sustainable forestry. The collaboration ought to be undertaken in full recognition of the need to deliver on the UK’s commitments to halt and reverse biodiversity loss by 2030 under the Kunming-Montreal Global Diversity Framework, and on the Government’s commitments and obligations under the Environment Act 2021. (Paragraph 232) Seeing the wood for the trees: the contribution of the forestry and timber sectors to biodiversity and net zero goals 83

Significant action is required to reduce the impact on deforestation of the UK’s consumption of agricultural products. While the UK is the 15th largest contributor to tropical deforestation in global terms, the intensity of UK consumption (measured in footprint per tonne of product consumed) is higher than that of China. This figure ought to alarm Ministers.

Consumption patterns in the UK which rely on the current global supply chain are unsustainable. Addressing these patterns is essential to the UK’s contribution to the alleviation of global biodiversity loss. The first step in addressing them is in recognising the need to reduce the UK’s overall consumption. We welcome the news that the UK Government has commissioned the Joint Nature Conservation Committee to develop a global environmental footprint indicator, but we are disappointed to observe that the Government has not yet made a commitment to setting a global footprint target using this indicator, so as to track progress made in reducing the UK’s global environmental footprint.

We reiterate the recommendation we made in our September 2021 report on The UK’s footprint on global biodiversity, which reflects that of the Global Resource Initiative Taskforce, that the UK Government should commence the process of setting an environmental footprint target with the aim of reducing the UK’s global environmental impact, including its deforestation footprint.

Understanding which forest risk commodities are contributing to deforestation, and on what scale, is essential for the UK and other nations to introduce effective legislation and policies. Monitoring and transparent data reporting are therefore crucial, including on how consumption contributes to deforestation. These are very complex undertakings, requiring global cooperation at the national government level and within the private sector. Complete and transparent data availability is essential for companies and the financial sector to be able to understand, and to reduce, exposure to deforestation in their supply chains or portfolios.

To ensure that the UK can measure and track progress, we recommend that the Government should continue to fund the development of a monitoring, measurement and reporting framework for UK consumption.

We recommend that the Government use its influence in all relevant forums to promote international data disclosure (and domestic disclosure of UK customs and industrial data) so as to improve the monitoring of forest risks in the UK and globally.

Illegal mining is increasingly recognised as a driver of deforestation in some regions. The Foreign, Commonwealth and Development Office has indicated that its programmes addressing deforestation are to be expanded to cover a wider range of forest risk commodities, beyond timber, and will expressly include mining. We welcome this explicit recognition of a broader range of drivers of global deforestation. (Paragraph 27) The UK’s contribution to tackling global deforestation 47

We recommend that UK consumption monitoring be developed to incorporate the monitoring of mined products, so as to support the Government’s programmes addressing the impact of mining-related deforestation.

Given the scale of government purchasing power, both centrally and across the wider public sector, the UK Government has an opportunity, and a responsibility, to drive best practice and to demand the use of sustainably sourced products.

We recommend that each Government Buying Standard be made mandatory for all large public sector bodies, including the NHS, the Armed Forces and HM Prison Service, as it currently is for UK Government departments and their partner organisations. Annual reporting on compliance against public procurement policies should also be mandatory for these large public bodies: the annual reporting should in each case indicate the proportion of overall goods procured which have been sourced from UK producers.

Sustainable government procurement presents a pathway to increasing the sustainability of supply chains. Government performance against existing sustainable procurement policies has been unimpressive to date. The 2020–21 Greening Government Commitments report indicated that ten departments had submitted information about their performance against the procurement commitment in that year. Given that 2020–21 was a year in which the pandemic had a significant impact, the Cabinet Office ruled that the data submitted “should not be considered as a representative measure of overall government performance against this commitment” and declined to publish the data submitted. We expect Ministers to require full reporting by their departments against the procurement commitment, and all other Greening Government Commitments, for 2021–22: in the interests of transparency and the encouragement of high levels of compliance, the data should be published in full in the 2021–22 annual report.

There is an opportunity to learn from the experience of timber and palm oil procurement, and to strengthen and extend these approaches.

We recommend that the GBS require all acquired forest-risk commodities (in addition to palm oil, timber and paper) to be certified as sustainably produced. (Paragraph 41) The UK’s proposed due diligence system under the Environment Act 2021

Current UK regulation is not sufficient when it comes to limiting non-sustainable deforestation. It relies too heavily on the laws in exporting countries and an assumption that that these laws will incorporate adequate provision for sustainability: as currently drafted the Regulations take control of the UK’s impact on sustainable timber production out of the UK’s hands.

We recommend that the Government bring forward proposals to amend the UK Timber Regulations so as not only to prevent illegally harvested timber being placed on UK markets but also to require all imported timber to be sustainably harvested. (Paragraph 52) 48 The UK’s contribution to tackling global deforestation

The Government’s consultation on proposals for Schedule 17 implementation ended in March 2022, but secondary legislation has not yet been brought forward and the Government has not yet committed to a date by which it can be expected. While we welcome the Secretary of State’s recent clarification of the initial commodities which are to be within scope, and the turnover threshold to which the Schedule 17 regime is to apply, many details of the proposed scheme remain unclear. We are concerned that this leaves businesses with uncertainty and impairs their ability to prepare properly to meet the requirements of the regime. Under the Glasgow Leaders’ Declaration on Forests and Land Use, the UK has committed to ending deforestation and forest degradation by 2030, and at COP15 global agreements were made to halt and reverse biodiversity loss by the same deadline. With less than seven years remaining until 2030, the UK Government should avoid all further delay to ensure that the UK plays its part in meeting these vital goals.

We recommend that the Government publish its proposed suite of regulations as a matter of urgency. Where regulations are to be subject to the affirmative procedure, Ministers must publish a clear timetable for drafts to be laid, approved by both Houses and brought into force, to allow those businesses likely to be within the scope of the regulations sufficient time to prepare.

The due diligence system established under Schedule 17 will prohibit the use of illegally produced commodities with reference to compliance with local laws. This means that products of legal deforestation will not be within the scope of the system, unlike comparable EU legislation. This is regrettable. Only 31% of deforestation globally is illegal; the wide variation in the strength of local laws on deforestation is a weakness of this approach, and there is the possibility of deregulation in response to the UK’s due diligence requirements.

We recommend that, in order to increase the sustainable use of forest-risk commodities, the Government should bring forward amendments to paragraph 2 of Schedule 17 to the Environment Act so as to prohibit UK businesses from trading or using commodities linked to deforestation activity as defined by the UN Food and Agriculture Organization, whether or not the activity is permitted by local legislation.

To be effective, the Government’s proposed approach requires the UK to work in partnership with producer countries and to reinforce (and in some cases, strengthen) their legal and policy provisions to counter deforestation. We therefore recommend that the proposed demand-side due diligence system is complemented by Government initiatives to support and build capacity in producer countries.

A phased introduction of forest risk commodities misses the opportunity to set early and clear expectations that deforestation is not welcome in any UK supply chains. While the Government’s announcement that four major commodities will be brought within initial scope of the Schedule 17 regime is welcome, the failure to include commodities such as maize, rubber and coffee within this scope does not demonstrate the level of urgency required to halt and reverse forest loss and land degradation by 2030. (Paragraph 81) The UK’s contribution to tackling global deforestation 49

We recommend that the Government’s proposals for due diligence legislation should include from the outset all forest risk commodities associated with a material UK deforestation footprint (soy, palm oil, cocoa, maize, beef and leather, rubber and coffee) rather than taking the phased approach which Ministers appear to favour. In the response to this report we expect the Government to set out the evidential basis for the claim that the commodities within initial scope are estimated to account for 64% of the UK’s tropical deforestation footprint, and to indicate the proportion of the UK’s global deforestation footprint estimated to be covered by these commodities.

A due diligence system is likely to require companies to comply with any human rights requirement included in local land use or land ownership laws. We observe that the legal status of customary land tenure rights of indigenous peoples and local communities (IPLCs) varies between nations. Unless customary tenure rights are explicitly recognised and protected under national law, IPLCs with customary land rights are vulnerable to rights violations.

We recommend that provision be made in the due diligence system—by amendment to primary legislation, if necessary—to ensure that products are not illegally produced in relation to land use and land ownership laws, including customary tenure rights.

Schedule 17 requires the Secretary of State to evaluate the effectiveness of the due diligence system in the third year following its full entry into force. The Act requires an evaluation of the impact of the regime on deforestation activity, but does not explicitly require an evaluation of the impact of the system on the human rights of indigenous peoples.

We recommend that the statutory evaluation of the Schedule 17 due diligence system address expressly whether the due diligence system has effectively supported the human rights of indigenous peoples to land, territories and resources.

The UK financial sector is a direct and indirect contributor to financing deforestation. Financial institutions cannot meet their deforestation policies or their net zero commitments without also addressing their exposure to deforestation through the companies they finance.

Information and data availability is one of the greatest challenges for financial institutions with regards to allowing them to assess and reduce their deforestation risk. We therefore welcome the Government’s championing of the work of the Taskforce on Nature-related Financial Disclosures. We observe that making nature-related disclosures mandatory would not obviate the need for mandatory due diligence for the finance sector under Schedule 17 to the Environment Act.

We recommend that the Government bring forward legislation to bring businesses in the UK financial sector within the scope of the Schedule 17 regime.

In order to support target 15 of the Kunming-Montreal Global Biodiversity Framework, we recommend that the Government bring forward proposals to legislate for mandatory 50 The UK’s contribution to tackling global deforestation disclosure of nature-related impacts by businesses, including the financial sector, on the basis of the November 2023 recommendations of the Taskforce on Nature-related Financial Disclosures, and should set a clear timetable for doing so. (Paragraph 95) Global agreements to tackle deforestation

The UK Government has played a significant role in brokering agreements to reverse deforestation and has been influential in increasing the profile of nature at climate COPs. For the first time, many nations and significant private sector institutions have committed to action on deforestation: substantial financial commitments on deforestation have also been made.

Decisive action must follow these commitments if the Kunming-Montreal goal of halting and reversing biodiversity loss by 2030 and the commitments of the Glasgow Leaders’ Declaration and subsequent COP agreements are to be met. The UK must lead by example, fulfilling its pledged funding commitments, continuing its diplomatic efforts to keep issues of deforestation and nature prominent in global discourses and restoring and conserving its forests at home.

It is encouraging to see the commitments made at COP26, COP27 and COP28 on deforestation which were accompanied by major funding commitments. Past commitments to mobilise finance for climate adaptation have not yet been fulfilled and commitments to restore nature remain relatively underfunded. In order to meet the commitments of the Glasgow Leaders’ Declaration on Forests and Land Use and the goals of the Global Biodiversity Framework by 2023, mobilising the promised funding is critical.

Whilst the Committee welcomes recent funding announcements to tackle deforestation, it is unclear whether these are in addition to the £1.5 billion previously committed to in the Global Forest Finance Pledge.

The UK Government should lead by example. We therefore welcome the recent confirmation that the UK is to maintain its flagship £11.6bn climate and nature funding pledge. The UK cannot step off the global stage in relation to its climate, nature and deforestation commitments. The Government should make it clear how the £1.5bn of funding specifically committed to activity to address deforestation is being spent. Greater transparency will ensure that this Government and future Governments can be held to account.

It is encouraging to see the IPLC donor pledge supporting the principle of the advancement of Indigenous Peoples’ and local communities’ forest tenure rights and rewards their role as guardians of forests and nature. However, extremely little funding pledged for nature has previously supported IPLC tenure rights, and even less has reached indigenous peoples and local community organisations directly.

We welcome the commitment of the Foreign, Commonwealth and Development Office to fund capacity building initiatives for IPLC grassroots organisations. We recommend The UK’s contribution to tackling global deforestation 51 that, in order to ensure that this funding is used to maximum effect, Ministers ensure that the greatest possible proportion of UK funding is disbursed so as to reach IPLC organisations directly and verifiably. (Paragraph 129) Global cooperation to tackle deforestation

We welcome the Government’s commitment to a programme to continue the work of the of the Forest Governance, Markets and Climate Programme, and the potential extension of its scope to include mining commodities.

We recommend that the scope of the next phase of the Forest Governance, Markets and Climate Programme should be kept under regular review to ensure that the most significant drivers of deforestation are included.

We look forward to the publication of the report of the Government’s review of the effectiveness of FLEGT-VPA programme. The evidence we have received indicates that the experience of the FLEGT-VPA varies greatly depending on the country context.

We recommend that the report of the Government review should be shared widely, including with the relevant EU authorities and Member States preparing for the successor programme to FLEGT-VPA. Lessons learned should be incorporated thoroughly into future UK programmes so as to address most effectively all deforestation activities driven by production of forest risk commodities. Where appropriate the review’s findings should take a country-based approach, analysing the country-specific factors which have contributed to particular outcomes.

Indigenous peoples and local communities (IPLCs) are vital protectors of forests: but they themselves are victims of the negative effects of deforestation activity, which can include violence and deprivation of livelihoods. Ensuring the full and meaningful participation of IPLCs in negotiations to address deforestation activity is therefore crucial: it is encouraging that this appears to be recognised in Government.

Security of tenure rights for IPLCs is essential to measures to address deforestation. The UK Government can make a significant contribution to ensuring security of tenure. We recommend that the Foreign, Commonwealth and Development Office

We recommend that the Foreign, Commonwealth and Development Office continue to address measures to improve tenure rights through its development programming. Ministers must ensure that IPLCs are supported in the protection and restoration of forests: one means of achieving this objective is by promoting the inclusion of IPLC representatives in all relevant global and national negotiations.

For the UK Government to make good on its declared intention to put environmental sustainability measures at the heart of global production and trade, Ministers must ensure that biodiversity considerations are more consistently incorporated into its trade agreements and operations. (Paragraph 168) 52 The UK’s contribution to tackling global deforestation

Ending commodity-driven deforestation requires decisive action by all major consumers. While the UK and EU markets represent a relatively high proportion of global consumption of some forest risk commodities, such as cocoa and coffee, they account for a relatively small proportion of others, including soy and palm oil, compared to other large markets such as the Asia Pacific market. In order to have maximum impact on efforts to halt and reverse deforestation, the UK’s engagement must therefore extend to major consumers of forest-risk commodities in other markets.

If the UK Government is to persuade other major consumers to act on their deforestation footprint, it is important that the UK leads by example. We recommend that Ministers use the opportunity of bilateral and multilateral trade negotiations to encourage consistently high environmental and social standards, so as to accelerate the transition to sustainable supply chains which minimise deforestation risk.

We reiterate the recommendation of our 2021 report on the UK’s footprint on global diversity: sustainability impact assessments must be conducted for all future trade agreements. Ministers must develop strategies for the effective monitoring and delivery environmental net gains, including gains through halting and reversing deforestation, in its negotiations for and implementation of the UK’s trade deals. (Paragraph 171) The UK’s contribution to tackling global deforestation 53