SPOTT – Sustainability Policy Transparency Toolkit – is a free, online platform supporting sustainable commodity production and trade. By tracking transparency, SPOTT incentivises the implementation of corporate best practice.
© Jemma MulraneySPOTT assesses commodity producers, processors and traders on their public disclosure regarding their organisation, policies and practices related to environmental, social and governance (ESG) issues.
Launched by ZSL (Zoological Society of London) in 2014, the initiative initially focused on the palm oil sector, but expanded in 2017 to include assessments of timber and pulp companies, and in 2019 launched inaugural assessments of natural rubber producers and processors. Across all sectors, ZSL’s focus is on the companies likely to have the most significant impact on tropical biodiversity by virtue of the scope and location of their operations. For timber and pulp, there is also a particular focus on companies operating in FLEGT partner countries in the Congo Basin and Indonesia, and traders in China that source timber from Africa.
SPOTT now scores 100 tropical forestry companies annually against up to 175 sector-specific indicators to benchmark their progress over time. Investors, buyers and other key influencers can use SPOTT assessments to inform stakeholder engagement, manage ESG risk, and increase transparency across multiple industries.
All SPOTT data is freely available via the SPOTT Dashboard (free registration required), enabling users to download and analyse data as required to meet their needs. The SPOTT website also includes a weighting function so users can modify the importance of different aspects of the SPOTT assessment framework. Depending on user preferences, weighting can be applied to environmental, social or governance-related indicators; specific indicator categories – such as deforestation and biodiversity, and water and waste management; and to certain types of disclosure – such as information verified through external parties and certification schemes.
SPOTT Scoring Criteria and Certification
ZSL acknowledges that a number of companies are going beyond establishing ESG commitments and have taken the next step of achieving voluntary sustainability certification. In 2020, ZSL SPOTT further developed the timber and pulp indicator framework to reflect this, by awarding certain indicators automatic points. These indicators were chosen where overlap was found between certification schemes, Timber Legality Assurance Systems (specifically the Sistem Verificasi Legalitas Kayu or SVLK in Indonesia) and the SPOTT scoring criteria.
After undertaking a large-scale analysis of the degree of alignment between FSC standards and the SPOTT indicator framework, it was clear that there is significant overlap. In total, FSC standards cover 99 of 175 indicators to some degree, and a further 47 indicators are covered by FSC Forest Management and Chain of Custody Certification. This enables the SPOTT framework to automatically award either partial or full points as appropriate. This recognises that some SPOTT-assessed companies have been audited by a third party against a standard that demonstrates compliance with many SPOTT indicators. In 2020, many companies’ scores improved from the previous year as a result of this change.
In the case of some indicators, the percentage of the companies’ forest management unit that has been certified is reflected in how many points they receive; for example a company whose forest production units are 100% certified will score 1 point, but a company with only 12% certified area would score 0.12 points. This reflects companies’ efforts to increase their FSC certified area in their SPOTT score.
Key Findings from SPOTT’s 2020 Timber and Pulp Assessments
Results from SPOTT’s 2020 timber and pulp assessments – a snapshot of how the tropical forestry sector as a whole is faring in ESG transparency – revealed that many companies are failing to guarantee environmental protections for at least 11.7 million ha of tropical forest. That’s the minimum area controlled by the 44% (40/90*) of companies that are yet to publicly commit to zero-deforestation. As many of the assessed companies do not disclose the size of the areas under their control, the real extent of tropical forest at risk will be far larger. Just 13% (12/90) of companies report actively monitoring for deforestation throughout the areas they manage.
In addition, over half (54% – 49/90) of companies do not publicly commit to protect biodiversity, and only 37% (33/90) of companies provide evidence of conservation, such as restoring river habitats or planting native species in degraded areas.
Key results from the indicator category focusing on certification include a far higher average overall score for companies with some or all of their landbank FSC certified or PEFC certified, at 48.6% compared to 8% for companies lacking such certification.
Only 17% (15/90) of companies have more than 75% of their landbank FSC certified and only 9% (8/90) of companies are 100% certified, while 15% (14/94) of companies have a commitment to only source wood or wood fibre that meets FSC Controlled Wood requirements.
27% (24/90) companies have more than 75% of their area verified as being in legal compliance by a third party. Just 10% (9/90) that have suppliers report any of their supply as being verified legal by a third party.
For a summary of all key findings, and detailed assessments of all 100 companies, visit here.
* Indicators are disabled if they are not applicable to companies due to the nature or location of their operations.