The Soy Transparency Coalition’s (STC) fourth annual Soy Trader Assessment has revealed significant gaps in action towards achieving fully deforestation- and conversion- free soy.

The report, carried out by 3Keel on behalf of the coalition, is the result of an annual review of the policies and actions of the eleven most significant soy traders supplying coalition member companies. The survey is a combination of desk-based research and direct engagement with the traders.

The key finding is that traders are behind where they need to be in ensuring they align with legislation on the universal cut-off date by which soy plantations must be on land not newly deforested. Only three of the assessed traders have an aligned requirement with the European Union Deforestation Regulation (EUDR) for ensuring no deforestation is occurring in their supply chain since December 2020.

Traders who do not have a universal cut-off, or one later than 2020, show no signs of changing commitments to align with a 2020 cut-off date. This creates a risk that the supply chain will split and that recent deforestation is tolerated, particularly as traders have not been transparent about actions taken to mitigate these risks.

“During the assessment, it was not clear what level of engagement traders are having with farmers to prevent deforestation and land conversion in the lead up to a later cut-off date,” says one of the report’s authors, Charlotte Williams. “There is a risk of the global supply chain splitting, with high-risk soy sent to regions that do not yet have the same level of regulations as the EU.”

A spokesperson from Sainsbury’s, a coalition member, said, “The Soy Transparency Coalition report highlights the need for further commitments and transparency from traders if we want to halt deforestation and conversion in supply chains. The EU Deforestation Regulation shows that significant progress on transparency can be made in a short period of time. The report highlights how industry can build on this progress to eliminate deforestation and conversion and tackle emissions.”

Four other key findings emerged in this year’s report:

1. Traceability of indirect supply (when traders purchase soy from intermediaries) remains a significant challenge and traders are under increasing pressure to close the traceability gap.
2. Gaps remain in monitoring and verifying sustainability policy commitments. There has been progress in disclosing non-compliance to policies within traders’ supply chains. However, traders continue to be inconsistent in monitoring their entire supply chains and there are shortcomings in the verification of progress towards sustainability commitments.
3. Climate change commitments covering supply chain & land use change emissions are currently lacking. Most traders have recognised the importance of reducing scope 1 and 2 greenhouse gas emissions in their own operations. However, commitments to address scope 3 (value chain emissions) and emissions from land use change (LUC) are currently falling short. In the coming years, there is likely to be increasing pressure and scrutiny on soy traders to set ambitious targets to reduce these emissions.
4. Most traders are investing financially in landscape initiatives in areas they source from. However, there is a consistent lack of disclosure that makes it difficult to assess the impact of these initiatives and how traders intend to scale them.

For the full report, visit the Soy Transparency Coalition website.