Why Corporate Sustainability Pledges May Not Be Behind Falling Deforestation Rates

Takeaways

• A new study found that corporate sustainability pledges had little additional impact on reducing deforestation in Indonesia's palm oil sector.
• Researchers observed similar declines in forest loss among companies with and without zero-deforestation commitments.
• Government policies and weaker economic pressure on agricultural expansion appear to have played a larger role in reducing deforestation.

Recent declines in deforestation across Indonesia's palm oil industry may not be the result of corporate sustainability pledges, according to a new international study. Researchers found that companies with zero-deforestation commitments recorded nearly the same reduction in forest loss as companies that had made no such promises, suggesting that broader public policies and market conditions were the primary drivers behind the trend.

The research, published in the Proceedings of the National Academy of Sciences, was led by scientists from the University of Geneva and involved experts from the University of California, Santa Barbara (UCSB), the University of Cambridge, the University of Basel, New York University, and the Transparency for Sustainable Economies (Trase) initiative.

Read More: EU Deforestation Law Faces Embarrassing Delay Over Technical Failures

The study focused on the Indonesian palm oil sector, one of the world's largest producers of palm oil and a major contributor to tropical deforestation. Researchers examined whether voluntary zero-deforestation commitments made by companies delivered measurable benefits beyond government-led conservation efforts.

To answer this question, the team mapped a highly complex supply chain involving more than 2,600 plantations, 1,200 processing mills, and 190 companies. Using satellite imagery and publicly available corporate data, they compared deforestation trends in supply chains linked to companies with sustainability commitments against those without them.

The findings showed that plantations connected to companies with zero-deforestation commitments experienced a 6.63% decline in forest loss. However, plantations supplying companies without these commitments also recorded a nearly identical 6.50% decline. The difference amounted to just 0.12%, indicating that the commitments produced almost no additional reduction in deforestation.

Researchers believe the results reflect the influence of factors beyond corporate action. During the study period, agricultural expansion slowed because of less favorable economic conditions, while Indonesian government measures, including forest moratoriums, were already limiting the conversion of tropical forests into agricultural land.

The study's authors emphasized that this does not necessarily mean corporate sustainability pledges lack value. Instead, they suggest the commitments may have helped companies implement responsible practices but did not create measurable improvements beyond what national policies had already achieved.

The researchers also noted that the effectiveness of these commitments could change under different circumstances. If economic conditions encourage rapid agricultural expansion or conservation rules weaken, companies with strong zero-deforestation policies may play a more important role in protecting forests.

Rather than viewing voluntary commitments as a standalone solution, the team argues they should be considered part of a broader forest conservation strategy. Government regulations, market conditions, and private-sector commitments are likely to work best when combined to reduce pressure on tropical forests over the long term.

Also Read: Sustainable Future: Mexico’s Avocado Exports to Go Deforestation-Free by 2026

The researchers plan to continue studying how public policies and corporate initiatives interact to support lasting reductions in deforestation, particularly in regions where forests remain under increasing pressure.

Follow more news and views via our Climate & Environment and Featured Articles sections, and stay updated on the top ESG events to attend in 2026 for industry insights and networking.

If you're looking for suitable ESG and Sustainability providers to share customized solutions specific to your business needs, you can check out KnowESG's Solutions page.

If you are an ESG provider looking to get your organization listed on our portal, visit this page.

Source: UC SANTA BARBARA