Setting deforestation- and conversion-free commitments can come with a steep learning curve. One of the first hurdles to overcome is deciphering some commonly used—and commonly misunderstood—environmental science terms and concepts. One of the questions I get the most often: what is the difference between cutoff dates and target dates? In the following post I’ll delve into specific definitions and context, along with why this is so crucial to get right.
What is a deforestation- and conversion-free commitment?
Deforestation-and conversion-free (or DCF) commitments are made to avoid producing goods on land that has been converted from natural habitat—including forests, grasslands, wetlands, and savannahs. As it stands, commodity production is the leading cause of deforestation and conversion which is why these commitments are some of the most important tools we have to protect habitat on a large scale. If there is no market for goods produced on deforested lands, there’s no incentive to clear them.
There are two necessary components of any deforestation- and conversion-free goal: cutoff date and target date.
A cutoff date marks the latest date a company or country will source from lands that have been converted for agricultural purposes. For example, a food company may decide that it will no longer buy soy from any area converted after 2015.
All agricultural land was converted at some point in history. This is why DCF goals need a cutoff date. These dates should always be fixed. Rolling dates that refer to relative targets, e.g., no conversion in the past 10 years, are more likely to shift and should be avoided. Although these time frames are useful when analyzing historic trends, they don’t work when setting goals.
A cutoff date should never be left undefined or set in the future.
If a company doesn’t set a cutoff date, but instead employs a rolling window to avoid converted habitat from a prior year, farmers will be incentivized to continue clearing natural habitat on a corresponding rolling basis. Likewise, if a company sets its cutoff date for a length of one year’s time, a farmer will likely keep clearing more habitat since they can start using the land the next year. Cutoff dates in the future can even incentivize a race to clear as much habitat as possible before that date.
The illustration below shows just how much the cutoff date can influence a company’s progress toward its DCF goal. The top row shows a landscape that faces ongoing habitat conversion between 2020 and 2025. The bottom row shows what areas are excluded from the market under different cut-off dates. On the left, the company has set a 2020 cutoff for its sourcing, the middle set 2023, and the right 2025. If a company sourced from the whole region, its DCF compliance in 2025 would be 68%, 80%, and 100% respectively. But the 2025 cutoff date likely spurred the additional clearing in 2024, and none of these cutoff dates have much meaning without the company setting a goal to avoid sourcing from them.
A target date is when the company plans to be completely deforestation- and conversion-free.
You can have a goal to not use any land cleared before a certain date, but when do you intend to meet that goal? Any DCF commitment must include a target date, when the company will be 100% compliant with its policy to not source from any land converted after the cutoff date.
A target date should be soon enough to spur ambitious action, but far enough away to be realistic.
The sooner the target date, the more aggressive the company must be in changing its sourcing habits. However, a goal that’s clearly unrealistic sets a company up to fail and invites greenwashing accusations. But set the target date too far into the future and progress will either be too slow to make a significant impact (or nothing will change at all).
How does a deforestation- and conversion-free goal work with a Scope 3 value chain climate goal?
A strong DCF target will help companies reduce emissions within its supply chain and help meet climate commitments. In climate accounting, the carbon emissions that result from clearing nature are amortized over 20 years. If a forest containing 500 tons of CO2e is cut down in 2020, it has 25 tons of CO2e assigned to it each year for 20 years. This means a company sourcing from this land must include 25 tons of CO2e per year in its emissions accounting until 2040. That additional CO2e load can be detrimental to a company’s supply chain emissions targets, since it is often 10 times as much as the emissions from producing the actual crop on that land.
Companies benefit from considering climate accounting when determining DCF cutoff and target dates.
The further back the DCF cutoff date, the less land you will have in that 20-year climate window—and fewer emissions to add to the carbon balance sheet each year. The sooner your target date, the more land in your supply chain moves to DCF each year. There is a dual benefit here: as the years go by you make progress toward your DCF goal and lower your emissions, while at the same time, land ages out of that 20-year window and lowers your emissions even more.
Setting an appropriate and ambitious deforestation- and conversion-free target—and acting on it—is critical for both nature and business.
Agriculture is the number-one cause of deforestation and land conversion. In 2022 we lost nearly 6 million hectares of forests around the world each year to commodity agriculture. In the North American Great Plains, nearly 32 million acres of grasslands have been plowed since 2012, primarily for row-crop agriculture. This cannot continue. The planet is warming, ecosystems are collapsing, and the resources on which we depend are depleted faster than we can replace them.
Companies, along with governments, wield immense power to halt and reverse these trends. Thoughtful, ambitious, and realistic deforestation- and conversion-free commitments are a first step in the journey toward that goal. It won’t be easy, but for the sake of your business, the planet, and everyone on it, it’s time to act.
About the author:
Emily Moberg is the director of scope 3 carbon measurement and mitigation at WWF’s Markets Institute.