JURISDICTIONAL APPROACHES An analysis of Brazil's states and companies contribution March, 2021 Photo: Istock Getty Images1 Contents 04 Executive Summary 07 Jurisdictional approaches and the climate action agenda 13 Jurisdictional approach: current enablers 19 Overview of the jurisdictional approaches in Brazilian states of the Legal Amazon 26 Overview of the performance of Brazilian companies in jurisdictional approaches 29 Recommendations for policymakers and jurisdictional approach stakeholders 31 References Authors Importan notices The contents of this report may be used by anyone, provided acknowledgement Miriam Garcia is given to CDP. This does not represent a license to repackage or resell any of the data reported to CDP or the contributing authors and presented in this Fernanda Coletti report. If you intend to repackage or resell any of the contents of this report, you need to obtain express permission from CDP before doing so. CDP has pre- Andreia Banhe pared the data and analysis in this report based on responses to the CDP 2020 Gustavo Souza information request. No representation or warranty (express or implied) is given by CDP as to the accuracy or completeness of the information and opinions Antonio Ouro contained in this report. You should not act upon the information contained in this publication without obtaining specific professional advice. To the extent permitted by law, CDP does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to Visual design act, in reliance on the information contained in this report or for any decision based upon it. All information and views expressed herein by CDP are based Thiago Oliveira Basso on their judgment at the time of this report and are subject to change without notice due to economic, political, industry and firm-specific factors. Guest com- mentaries included in this report reflect the views of their respective authors; their inclusion is not an endorsement of them. CDP, their affiliated member firms Acknowledgements or companies, or their respective shareholders, members, partners, principals, directors, officers and/or employees, may have a position in the securities of the Pietro Bertazzi companies discussed herein. The securities of the companies mentioned in this document may not be eligible for sale in some states or countries, nor suitable Rebeca Lima for all types of investors; their value and the income they produce may fluctuate Sareh Forouzesh and/or be adversely affected by exchange rates. CDP refers to CDP North Ameri- ca Inc., a not–for-profit organization with 501(c)3 charitable status in the US and Helen Finlay CDP Worldwide, a registered charity (number 1122330) and a company limited by guarantee, registered in England number 05013650. Nadia Bishai Silvia Abruscato This research included in this report was mode possible through funding by Wal- mart Foundation. The findings, conclusions, and recommendations presented in this report are those of CDP alone, and do not necessarily reflect the opinions of the Walmart Foundation. © 2021 CDP. All rights reserved. 2 Jurisdictional Approaches Photo: Istock Getty Images 3 Executive Summary The objective of this policy brief is of the medium and long-term results to present the most recent develop- and the impacts of these initiatives. ments on jurisdictional approach- However, the specialized literature es, with a focus on jurisdictional has highlighted several benefits in initiatives in commodity producing building collaborative partnerships regions. Jurisdictional approach is an between the public sector, mainly umbrella concept with several defini- at subnational level, and the private tions. Those definitions have at least sector on the issues of forestry and the following elements in common: land use. jurisdictional approaches (i) bring together all relevant stakeholders The potential results of jurisdictional from a landscape defined by politi- approaches can help Brazil to comply cal boundaries that are usually at the with its Nationally Determined Contri- local government level, (ii) co-develop bution (NDC) submitted to the United and align objectives aimed at promot- Nations Framework Convention on ing sustainable practices within the Climate Change (UNFCCC), as well as jurisdiction, and (iii) exhibit strong supporting local authorities and com- subnational government leadership. panies to meet their voluntary climate This policy brief presents a mapping action targets - such as the New York of the status of the implementation Declaration on Forests (NYDF) or the of these initiatives in Brazil, based Rio Branco Declaration of the Gover- on the analysis of the information nors for Climate and Forests Forum submitted by states and corporations Task Force (GCF Task Force). to CDP in 2020. The data analyzed shed light on the implementation of In the first section, the report intro- jurisdictional approaches in the Bra- duces the concept of a jurisdictional zilian states of the Legal Amazon, approach. An analysis is then made including the different governance of the different initiatives centred on arrangements for these initiatives, the concept of a jurisdictional ap- and how they can contribute to re- proach. The third section presents ducing deforestation rates. the main data related to the subject of forestry that the states within the The concept of a jurisdictional ap- Brazilian Legal Amazon provided to proach is relatively new in the inter- CDP. The results regarding the imple- national community. The first case mentation of jurisdictional approach- in Brazil dates from the launch of es by companies are discussed in the Produce, Conserve and Include the fourth section. Finally, the Policy (PCI) Strategy by the state of Mato Brief gives recommendations for the Grosso in 2015. Data is therefore still different stakeholders involved in ju- limited for a more in-depth analysis risdictional approaches. 4 Key Takeaways STATES COMPANIES Of the nine states in the Jurisdictional initiatives can Brazilian Legal Amazon, seven be part of a company’s toolkit responded that they are aware for achieving sustainable of, and are implementing, supply chains. Businesses jurisdictional approaches, and can expand their sustainable one state is still developing practices by engaging in its jurisdictional approach. jurisdictional approaches, allowing them to increase The financial resources coming their environmental actions. from international cooperation, such as the Reduced Emissions In 2020, 687 companies voluntarily from Deforestation and Forest disclosed their information on Degradation (REDD+) program, impacts, risks and opportunities are essential to support states related to forests, by responding in implementing forest policies to CDP’s forests questionnaire. and jurisdictional approaches. Of these companies, 47 are However, there is a need for Brazilian, approximately 7% of conceptual clarity to differentiate the total CDP forest sample, jurisdictional REDD+ systems and which at the request of investors jurisdictional approach initiatives or customers shared forest- in commodity producing regions. related information on their performance and commitments The participation of states in multi- on commodities driving stakeholder initiatives, such as global tropical deforestation. the Governor’s Climate and Forest Approximately one third of the Task Force (GCF), proved to be 47 companies analysed have fundamental both in raising funds participated in external initiatives, from international cooperation and seeking collaboration to solve in implementing forest policies. issues related to deforestation. The state of Mato Grosso, The Brazilian companies analysed through the Produce, Conserve have participated more widely and Include (PCI) Strategy, is in forums and multi-stakeholder one of the world’s pioneers in initiatives than in jurisdictional implementing a jurisdictional approaches, highlighting the approach. Leadership on this need for corporate actions, issue can have a catalytic effect jointly with the government, in on the development of initiatives the regions where they operate. in other states in the region. 5 Jurisdictional Approaches Photo: Istock Getty Images 6 JURISDICTIONAL APPROACHES AND THE CLIMATE ACTION AGENDA Forests play a dual role on the climate the characteristics of each region, are agenda. On the one hand, the change essential requirements for initiatives in land use, resulting from deforesta- aimed at reversing forest loss. In this tion among other causes of forest sense, jurisdictional approaches ap- loss, represents the leading cause pear to be complementary to volun- of greenhouse gas (GHG) emissions tary individual and sectorial private in Brazil(1). On the other hand, forests sector responses - such as the cor- act as natural carbon reservoirs con- porate commitments to eliminate de- tributing to the mitigation of climate forestation from commodity supply change. In addition to carbon seques- chains. It is important to emphasize tration, conserved natural areas are that it is not a question of denying crucial for other ecosystem services sectorial and voluntary actions or such as food provision and regula- proposing a definitive solution to tion of the hydrological cycle, among a complex issue. On the contrary, others(2). by placing local authorities at the center of governance, jurisdictional The causes of deforestation are mul- approaches recognize the specifics tifaceted, with both direct factors,