Transforming the Leather Industry to Combat Deforestation

Today’s episode highlights a new initiative that aims to reduce the environmental footprint of leather production. Leather, as we all know, is sourced from cattle. And right now, cattle ranching for both beef and leather production is a major driver of deforestation, particularly in biomes such as the Amazon, Cerrado and Gran Chaco.

In Brazil, for example, cattle ranching drives twice as much deforestation as the production of soy, palm oil, and wood products combined. It’s a major problem that we need to overcome if we’re going to save critical ecosystems, conserve species, and secure a stable future for our planet.

That’s where the Deforestation-Free Leather Fund comes in. This new initiative, launched by WWF in March, gives companies that use leather in their products a chance to make a difference. This episode features an interview with the leader of that initiative, Fernando Bellese, about what exactly he hopes the fund will achieve. Companies or individuals interested in joining this effort can get more information in the links below.

Links for More Info:

• Fernando Bellese bio

• Deforestation-Free Leather Fund

• BLOG: Leather Now Has a New Role: Helping to Prevent Deforestation

TRANSCRIPT:

Seth Larson: Welcome to Nature Breaking, a World Wildlife Fund podcast focused on the news and trends affecting our natural world and the people and species who call it home. I'm Seth Larson, and today we're going to be highlighting a new initiative aimed at reducing the environmental footprint of leather production.

Leather, as we all know, is sourced from cattle, and right now cattle ranching for both beef and leather production is a major driver of deforestation, particularly in key biomes like the Amazon, the Cerredo, and the Grand Chaco. In Brazil, for example, cattle ranching drives twice as much deforestation as the production of soy, palm oil and wood products combined.

It's a major problem that we need to overcome if we're going to save critical ecosystems, conserve species, and secure a stable future for our planet. That's where the Deforestation-Free Leather Fund comes in. This new initiative launched by WWF in March gives companies that use leather in their products a chance to make a difference.

And today I'll be interviewing the leader of that initiative, Fernando Bellese, about what exactly he hopes the initiative will achieve and how companies can get involved. Before I bring Fernando into this conversation, please like this episode on YouTube and subscribe to Nature Breaking wherever you're listening to this podcast.

More likes and subscribes make a real difference with the algorithms on various platforms, which quite simply helps our show reach more people. Thank you for listening, and here's my interview with Fernando.

Okay, I am joined now by Fernando Bellese, senior Director of Beef and Leather Supply Chains at WWF. Fernando, welcome to Nature Breaking.

Fernando Bellese: Thank you very much, Seth. I'm glad to be here today.

Seth Larson: Yeah, I'm really glad you're here also and before we get started, I'd love you to just tell us a little about your background and really what led to your work on making beef and leather supply chains more sustainable. I feel like this is a very specific field. I'd love to hear how you got into it.

Fernando Bellese: Yes. It's an interesting question and I'm happy to answer actually, I've been engaged in these two supply chains for just under 15 years, always working with sustainability in the beef and leather sectors but trying to understand two different things. One, one is how those sectors they can be more efficient in a way of processing, making new things with those raw materials, but also looking at the supply chain, how we can work together with suppliers to make them more efficient, to make sure that they abide into, to law following voluntary standards and working more responsibly.

I started in Brazil about just under 15 years ago working for a food processing company. Since then, I moved to the US. I joined a Taiwanese group that works both making leather but also footwear.

And through those experiences, I've always been engaged in different initiatives, talking to different organizations, discussing supply chain chain-wide issues.

And through some of those discussions I had the chance to collaborate with WWF here in the US. And after that, I was in invited to join the markets team here at WWF in, in the US and I'm, as you mentioned, I'm the senior director for beef and leather supply chains. And what we do here, we work with the private sector all the way from brands, retailers, going up to, to midstream processors, slaughterhouses, and producers to understand how we can drive efficiencies, but most importantly, how we can ensure those supply chains are free from deforestation and conversion of ecosystems.

Seth Larson: Okay, yeah. Thank you for giving us some of your background. It seems like you've had a lot of experience in different stages of the supply chain as it pertains to leather and food production. And I want to take advantage of some of your expertise here and before we dive into the fund itself, can you just explain for our audience the difference between leather that's produced sustainably versus leather that's not? What do we mean when we use those terms and what's the difference between them?

Fernando Bellese: I can try. It's not a straightforward answer and there are many things that you need to assess, you need to look at in order to make that judgment. But I think leather, as in, in many supply chains that they're two different and very important aspects that we need to look at.

One is where those raw materials come from, and what are the practices involved with, those, with the sourcing of those raw materials. And the other way, and the other part is, how you process it. If you look specifically at leather, it is a resource intensive material.

You need a lot of energy, water, and chemicals to process it, to make it a good product. It tends to generate a lot of waste. So, you need to ensure that those processes are maximized, that you are using clear production methods to ensure that you are driving those efficiencies within processing facilities. But there's also the impact that comes from your supply chain.

Leather is a byproduct of cattle production, and most of its impacts comes from that sector. Just to give an idea, when we are performing lifecycle assessments between 60 to 80% of the impacts coming from the impact from leather comes from the life of the animal. So, if you don't address that part, you're really not addressing core issues.

So, we need to make sure that when you're sourcing, you are sourcing from, responsible areas and you're helping to drive improvements in those sectors. And it's interesting because if you compare leather that comes from deforested areas in comparison with those that comes from land that has not been changed, has not been converted recently…

Seth Larson: Mm-hmm.

Fernando Bellese: …the impacts are 11 times, sometimes up to 11 times higher. So, it's really important that we look at both efficiency within a tannery manufacturer, but also what is happening in the supply chain.

Seth Larson: And when you say, when we assess the impacts, the impacts you're talking about are that everything from greenhouse gas emissions to forest loss, to, what are some of the other impacts? Are those the main two or are there others that we're looking at also?

Fernando Bellese: Those are some of the main impacts, biodiversity is another one. But when you look at lifecycle assessment, you are also looking at water usage, abiotic depletion, that there are a number of, impacts that come from the supply chain. And you need to make sure you're addressing them all.

Seth Larson: Gotcha. So just to summarize that, then, it sounds like there's a variety of impacts that can happen in the production phase when leather is actually being produced and it's in, in, a factory setting. And you're dealing with materials there, turning them into products there, but there's also impact from the lifecycle of the cattle that are used to produce that leather and that's where the bulk of the impacts come from. And that's really what we're trying to address through this fund. Right?

Fernando Bellese: That's correct. You summarized it perfectly.

Seth Larson: Okay, good. I appreciate it. So, let's talk about that fund. I want to get into the details of it in a minute, but before we do that, I wanted to just ask why a fund is needed to address this problem of sustainability with leather.

Fernando Bellese: Yeah, before I answer that question, it's important to share that we've been working in different commodities, understanding that the impact of producing those commodities in the environment and how we could be addressing them together with the private sector. Beef is one of them.

And after a few years we understood that leather was a part, an important part of that equation because it comes from the same supply chain. It comes from cattle production. So, we thought it was important to also work with companies in that sector. But when we started working in that sector, we understood that they have some very specific characteristics. On one side they are like if you look at the part that is closer to consumers, they are made of a lot of large companies, international brands, retailers, which you see often. They are engaged in important discussions related to sustainability. They are trying to engage their supply chain.

So, it's, a good door to start some discussions and to start to promote some change. Having said that, when you look on the upstream side, so the side that's closer to producers, closer to slaughterhouse, that sector represents a very small amount of the total business that is generated.

To give you an example, when you look at this slaughterhouse, the amount of money they make from selling the hides in South America, which is where the fund is going to be looking to support projects, the hides, sold by the hide, that's going to be it's the raw material that's going to become leather when it represents at most 1% of the total revenue from this slaughterhouse. So even though, yeah, it's incredible, isn't it? So even considering the size of companies, the international brands, we know when they start engaging with slaughterhouses and producers, they have very limited leverage. So, what we decided was that, okay, they may not be able to move at the strength and speed they need by themselves, but if they can work together first, we can send a stronger signal. But making sure that also the support they channel in the supply chain, they are used in a meaningful way and by using it collectively, they bring better results. So, like in, a summary, that's the idea behind the fund.

Seth Larson: Gotcha. I have just a quick question that I thought of as you were talking about, that it occurred to me, I don't know the answer to. And I'm inferring an answer based on what you've said, but I don't know if this to be true. Are most cattle that are raised for beef production? Are their hides then usually sold for leather production or are they, do they tend to be separate animals that are used for beef versus leather?

Fernando Bellese: That's, a very important question, Seth, because it's also part of why we need you to engage in that sector. There are no cattle that is raised for leather. Cattle are raised for beef and leather is a byproduct of that sector. Saying that doesn't mean that the leather sector doesn't, it's not co-responsible for that.

The leather sector has to engage with that. But because the main motivation behind cattle raising is beef, we need to understand that not only companies in the leather sector cannot solve everything by themselves, they need to work collectively within the leather sector, but they also need to work with the beef sector to address the problem. If you give me an extra minute just to…

Seth Larson: Yeah.

Fernando Bellese: …go a bit more in depth on this topic, this is also an interesting discussion. Moving a bit away from the funds, we are always engaged, often engaging in that discussion. People ask why we are working with leather, if leather has this connection with such environmental impacts.

What we see is that for the next 20 years, the world will increase the production of beef. FAO estimated that cattle herds will increase by at least 20% by 2050 to deal with the growth of the population. So, it's not about having or not those sectors, it's about how we can make sure that when they are growing, we can make them more efficient, and we can ensure that they are not impacting the environment.

Seth Larson: Yeah, absolutely. That's a really important point and I really want to thank you for making it because, yeah like you said, it's not about whether those sectors will be there or not. It's about acknowledging that the projections are what they are. And we also know that those industries are driving deforestation. And that there's better ways to do things and worse ways to do things. And we're trying to encourage the best possible, most sustainable, most efficient practices we can based on those future projections. So, I think that's a great pivot point to get into talking a bit about the design of this fund and how it will actually work and how it will actually drive change. The Deforestation-Free Leather Fund, my understanding is it's going to be focusing on three main tactics to help leather production become more sustainable. Those three tactics are traceability, ranching practices, and helping ranchers comply with laws and standards. I want to take each of those one at a time, and I think we should start with traceability.

Can you just tell us what traceability means in this context and why it's important?

Fernando Bellese: Yes, I can. One like traceability in a simple manner, it means you are able to understand where the materials you're using, the products you are buying, they come from and what is happening in those supply chains. It sounds simple, easy, but sometimes it can get very complicated. When you look at leather, sometimes even within just the leather processing facilities, that can be very complicated because you use different materials, different grades, different qualities.

You use traders. So, it can be complicated, but when you start looking at what happens after the slaughterhouse moves towards producers, it gets way more complicated. Cattle, differently from other commodities like soy or, or cocoa, they move, they go from one farm to another. It's not uncommon to see one animal between the farm they were born on and the day they were slaughtered to, to go through three, four different farms and that. That movement between farms makes it very hard to trace those animals all the way to the farm of birth. Because looking at environmental impact, the environmental impact doesn't happen also only on the direct supplier selling to this slaughterhouse.

It happens on every single farm, so we need to make sure we are looking at each of those farms. Not only that, most of the countries where you have larger, cattle herds and leather being shipped or being exported, traceability is not mandatory. So, you need to work with producers to get that information. So

Seth Larson: And so just I guess as an example, so maybe, production facility, a slaughterhouse might purchase an animal from one farm that is deemed to be not associated with deforestation, but little do they know that animal was born on a different farm that was in an area that was deforested and it just happened to be sold to a farm that wasn't before it was processed.

And so, it's, we're trying to get to the beginning of that so that we have visibility about what's really true and where did this animal really come from, and what impacts might be associated with its whole life.

Fernando Bellese: That's a perfect explanation. You, I think you, I can see you've done your homework and, that's, the reality. Most often, the connection between this slaughterhouse and this first supplier, it's easier to deal with and these slaughterhouse in many geographies, they are able to monitor those suppliers in an efficient way to understand if there was deforestation, if there was conversion of ecosystems, but even for other things such as animal welfare. But the challenge is really how to do the same thing throughout the supply chain up to the farm of birth. And, but there are solutions that, that's the good thing, there are solutions. It's not only about technology, but it's related to the market arrangements, how farmers have relationships with different suppliers, it's about incentives. We need to understand that very often we are asking producers to provide more information to work more to provide that information to make investments.

But slaughterhouses, they're not paying for that. So, we need to sometimes look at the market arrangements also to be able to do that. And the fund, when going back to, your question the fund is going to look at basically two things. How we can help to scale some of those solutions too, for traceability. So, to ensure that we are scaling some initiatives that have been created to individually trace the animal and be sure to monitor the life of those animals to prove that they are not coming from deforested areas or areas that were involved in other sort of environmental degradation. As a goal for the first three years, we expect to individually trace and verify where those animals came, went through during their lives for at least 1 million heads of cattle. That's our goal related to traceability.

Seth Larson: Yeah, okay. That would be hugely impactful. And I think that makes a lot of sense and I can really see the line of how that connects to driving more sustainable practices. I want to ask you next about the second of these areas that the fund's going to be working in, which is ranching practices. And I wanted to just understand what practices in particular we are advocating for and how those practices would actually lead to better outcomes for nature.

Fernando Bellese: Yeah, this is an interesting one. There are different, if we look from the deforestation angle, there are different reasons why a producer, a farmer will deforest. But one thing that it's very common is that they are deforesting to increase their production. This can be done illegally, but very often it's also done legally. So, what we are trying to achieve with this part of the fund is to really help farmers to become more productive, to become more efficient so they can produce more, they can be more profitable without needing to clear more land. Sometimes clearing land, deforesting, it's expensive as well. So, if we're able to help them to become more profitable and more efficient without clearing the land, we reduce that driver.

So, in terms of practice that we are going to support, it's about how farmers can better manage pastures, how they can work with rotations, how they can use... recover areas that have been degraded. Why do you need to deforest if you have an area that has been cleared before and it's just degraded?

So, it's really addressing the drivers for deforestation so they can... it's about their livelihoods also in the end. We need to make sure that they are working, in balance with the environment, but that they are ensuring that their livelihoods, that they're achieving a good life let's put this way. So, these are the kind of practices we are talking about, and it's not very challenging. Just to give an example, in Brazil where we first going to start the fund, today on average, a farmer raises one cattle head per hectare, which is a very low product production rate. In some countries, you have two, two heads of cattle per hectare and they are slaughtered at a younger age. So, if we're able to get those farmers to go anywhere like close to two heads per hectare. If we're able to recover areas that are degraded, if we're able to send the animals to the slaughterhouse at a younger age, sometimes the emissions now talking specifically about greenhouse gas emissions, they can be up to 70% lower per kilo of beef or per kilo of leather.

So, it's a lot of impact that it’s reduced if we are able to drive that efficiency, those efficiencies.

Seth Larson: Yeah, and that makes a lot of sense too. If I'm a farmer and I have 500 cattle, but I see an opportunity and I want to increase my revenue and I want to have 700 cattle instead, it seems like it would be a lot of work to clear more forest, cut down all those trees and create a new space of land to have those cattle live in. If I can find ways to make the existing land that I already have work for more cattle, it's going to be an easier path for me as a farmer in this hypothetical scenario to increase my revenue with a little bit less, just labor that would have to go into it and time, and I assume a lot of other factors as well.

Fernando Bellese: And not only that, very often we create this negative image about farmers, but farmers, they value their lands. They value nature. We just need to help them to understand how to become more, more efficient, and how to work in a better way. Not only that, after you start having those discussions, they can see the positive impacts of respecting nature. When you are recovering the areas, you deforested before when you're recovering, for example, the riparian areas, you see that the water cycles become more balanced again. You start having fewer extreme weathers. You become more resilient to droughts.

So, it's a win-win situation. It allows them not only to become more, more profitable, but also, they start seeing other positive effects coming from those better practices.

Seth Larson: Yeah. Well, thank you for explaining that. And just to keep us moving, I want to touch on the last area that the fund is focused on, which is working with ranchers to help them comply with local production laws and voluntary standards so that they can gain access to legal leather markets. This one is on its, on its face, a little more confusing to me. So, I'd love you to unpack it a little bit. What exactly are we helping ranchers to do? Why do they need our help to do it? And how will it lead to avoiding deforestation?

Fernando Bellese: Yeah, I think this is a good question, but also probably one of the most complicated ones for people who are not directly engaged in those discussions. And, just to be clear, we are not talking only about becoming legal again but also complying with other voluntary markets that sometimes, farmers are non-compliant for some reason. But what happens, Seth, is that very often when, we start engaging with supply chains and when companies start to implementing some sort of, of sustainable responsible procurement approach, the first step they take is to start looking at their suppliers, monitor it to see if they're complying either with legal requirements or voluntary requirements.

And they start sometimes blocking the non-compliant suppliers. This is one of the initial steps. But what we've seen through many, we many years working in different sectors is that if you only block the, low performing suppliers and you don't work in, bring and helping to bring those suppliers back to compliance, what happens is that those suppliers will not cease to exist. Demand for beef, just as an example, it's higher than they offer. So, they'll find markets for those, for beef, for cattle, and consequently for leather. And by leaving markets that are stricter and have higher requirements, they will start supplying them to less strict markets, which may not require those better practices. Yeah, in a way, it works against the conservation goals that we have. So, it's very important that we help those farmers to become complaints, both legally and to voluntary markets so they can access those better, but more, more strict markets. And, but why do they need help?

Seth Larson: Yeah.

Fernando Bellese: Sometimes they don't know that the right way of doing it.

Some of the paths they need to follow are complicated. Sometimes they do not, don't have the resources. It's expensive to restore areas that you have already deforested. Sometimes you have to fence that area. There are very clear steps that you, you can, you, can follow both to go back to legal compliance, but also to follow some of those voluntary markets.

But it's not necessarily an easy path to follow. So, what we are trying with the fund it's to really support the smaller and medium-sized farmers to be able to go through that journey of improvement. And, just to, and, one thing I'll also forgetting before you, move on, the positive results coming from, this processes are very interesting because first, you are bringing those suppliers to access better markets and through implementing better practice, but also the one of the immediate effects that you see is that some of these steps you, have to take is about.

Addressing the impacts you generated in the past. So, it, requires farmers to, as I mentioned, recover their legal reserves, riparian areas they need to be able to be profitable. They need to restore the pastures. So, it also has an immediate, positive effect on the environment.

Seth Larson: That's great. So, you know, as we talked about earlier, the fund is really premised on getting companies involved to finance the work that needs to happen on the ground to make leather supply chains more sustainable. And when I say companies, I think we're talking about companies that, you know, could be a fashion company that makes leather purses or a furniture company that makes leather chairs and couches.

There's a lot of different companies that make a lot of different leather products. What's your pitch to those companies about why they should contribute to this fund and how can they make a contribution if they're interested?

Fernando Bellese: Good, good question. And you mentioned a point that I forgot to talk about before. You're right. Then we are planning to work with companies in fashion, in the footwear sector, furniture, but also, we are looking at automotive companies. They use a lot of leather in their interiors, and we are looking also to engage some companies from the food sector.

The main goal is leather companies, but we welcome companies in the beef food sector to engage with us. In terms of why they should engage with the fund. As I mentioned before, they even in, even though on one side, they are large international companies there. On the retailer brand side, when you start looking at the upstream side producers and slaughterhouses, they represent a small part of that supply chain. So, it's limited. The improvements they can make individually is limited. But if we are able to get a large number of companies working together, we can, we can build efficiencies, synergies, in having those companies working together. Not only that, but we also see, there are companies trying to do things. They have climate commitments; they have commitments to biodiversity. They believe they need to help their supply chains.

But very often when you look at brands, either in fashion, automotive or furniture, they are very far from where those environmental impacts are happening. They are very far from farmers and, it's challenging for those companies too, to understand where they can be more efficient in supporting those companies.

How they can be meaningful in supporting those suppliers. So, the idea that it's not only we are able to have better, more meaningful results by supporting those suppliers together. But we are able to help those companies by engaging them with meaningful projects that have already been tested, projects that are ready to be scaled.

Very often we see that there are pilots, things that you can do on a small scale, but getting like a larger volume is challenging. So, we want to support those companies to be more meaningful in transforming their supply chains.

Seth Larson: Yeah, I think that's a great pitch and I hope that any company representatives listening to this find it compelling and want to get involved. Before I let you go, just knowing that a number of our listeners may just be regular folks who don't work for a leather supply chain company but might still feel motivated to make a difference on sustainable leather products. Is there anything that everyday consumers can do to make a difference in this work?

Fernando Bellese: That there are a lot of things they can do. And sometimes I think consumers don't engage as much as they can because they are afraid, they don't know what to ask.

Seth Larson: yeah.

Fernando Bellese: it's not about asking the best questions, but it's about showing you care and it's about showing you are engaged.

So, I would say engage with the companies from which you're buying your products, your goods, and ask them questions. Ask where the materials come from, if they understand that if those materials are not involved with deforestation, how they can prove that, and any other questions that you may have in mind.

It may not be the most correct question, but just showing that you are engaged, that you want to know you, you're going to get them thinking and you're going to get them to understand that consumers care about more responsible, better supply chains.

Seth Larson: Yeah, I like that notion of just making the effort really can make a difference and get minds thinking about what factors they need to be considering.

Fernando Bellese: Yeah.

Seth Larson: Just raising the profile and getting people thinking about it is good.

Fernando Bellese: Yeah, and the last thing, Seth, about this question. It's not hard to ask those questions. You can ask them on social media. You have contact forms on websites. You, when you are in a store, ask the person selling to you to help you, where does this leather come from?

Is it Deforestation-Free? That information is transferred. It is channeled to their headquarters. So, if you have many people asking those questions, you start moving those companies faster.

Seth Larson: Those are great examples and thank you for giving that. That's very good low hanging fruit of, send a social media message to some of the companies you buy from or fill out their web form. That's something that all of us can do pretty easily. So, Fernando, thank you so much for walking us through this. Congratulations on launching this fund and we really wish you the best of luck in getting it moving and really driving a lot of impact through it. And maybe six or twelve months from now we can have you back on talking about what some of the results looked like and what you've been able to accomplish.

Fernando Bellese: Sounds great. I would like to thank you for the invitation. It's been a very interesting conversation, and I look forward to continuing it.

Seth Larson: Great, Fernando, thank you.

Fernando Bellese: Thank you.

Thanks to Fernando for joining the show today. At WWF, our work with companies to make supply chains more sustainable is a big priority because the materials that go into so many products are often sourced from critical ecosystems that support biodiversity and a healthy planet.

Seth Larson: Leather is certainly a prime example of that, and I appreciate Fernando's work to make progress in that sector. If you're a company that wants to get involved in this work, please visit WWF's Deforestation-Free Leather Fund website to learn how you can do so. I'll include the link in the show notes for this episode. And for all of our listeners, thank you for tuning in and together let's keep building a more sustainable future.