The Deforestation Risk Report

The Deforestation Risk Report

Deforestation risk cannot be understood through one annual forest-loss figure. A country can report a falling national deforestation rate while still containing persistent hotspots, poorly mapped suppliers or frontier regions where conversion is accelerating.

Forest loss, deforestation, native-vegetation conversion and degradation are related but distinct. Deforestation normally refers to conversion from forest to another land use, while tree-cover loss can also include temporary disturbance.

The report therefore combines scale of clearing, direction of change, commodity exposure, geographic concentration, governance and traceability pressure. The final sections translate those statistics into a Deforestation Risk Index, a 90-day assessment plan and a procurement decision framework.

Executive Deforestation Risk Benchmarks

The numbers defining global forest pressure

Global forests cover approximately 4.14 billion hectares, or about 32% of the world's land area. That is roughly 0.5 hectares of forest per person. About 3.83 billion hectares are naturally regenerating, representing around 92% of total forest area, while at least 1.18 billion hectares are reported as primary forest. These figures establish the scale of the resource at risk, but they do not imply that all forest hectares provide equal ecological function.

Long-term rates show important progress. Average annual deforestation declined from about 17.6 million hectares in 1990–2000 to roughly 10.9 million hectares in 2015–2025. Net forest loss fell even more sharply, from about 10.7 million hectares per year in the 1990s to approximately 4.12 million hectares annually in 2015–2025.

Commodity pressure is concentrated. The seven major commodity groups highlighted in the selected regulatory benchmark account for approximately 4.025 million hectares of annual deforestation in 2015–2020. Cattle alone contributes about 2.355 million hectares per year, followed by wood at roughly 675,000 hectares, oil palm at 392,000, soy at 224,000, cocoa at 187,000, rubber at 111,000 and coffee at 82,000.

Brazil provides a high-resolution example of how risk changes over time. Consolidated Legal Amazon deforestation declined from approximately 6,518 km² in 2024 to 5,731 km² in 2025, a reduction of about 12.07%.

Risk dimension

What it measures

Why it matters

Annual deforestation

Area of forest converted

Measures current clearing pressure

Historical persistence

Multi-year clearing pattern

Distinguishes structural risk from one-year spikes

Commodity exposure

Clearing tied to production

Connects land-use change to supply chains

Geographic concentration

Share of clearing in hotspots

Identifies monitoring priorities

Protected-area coverage

Forest under formal protection

Signals conservation buffers

Carbon impact

Emissions from conversion

Links clearing to climate risk

Traceability

Ability to link products to source locations

Determines supply-chain visibility

Policy exposure

Regulatory obligations and enforcement

Raises compliance and market-access risk

Recovery trend

Decline or increase in annual clearing

Shows direction of travel

 

Executive readout: Global deforestation has slowed from earlier historical levels, but annual conversion remains large and concentrated in specific commodities and geographic frontiers. Risk assessment should combine scale, trend, commodity exposure and traceability rather than rely on one headline number.

 

Why Deforestation Risk Requires a System-Based Benchmark

Annual clearing volume is an essential measure, but it is not a complete risk score. Consider two hypothetical regions. One clears 5,000 km² this year but has been declining for several consecutive years. Another clears 2,000 km² but has doubled its rate over a short period.

A robust benchmark therefore separates five layers. Control measures the strength of geolocation, monitoring, protected areas, supplier information and regulation.

These layers should remain visible even when combined into a composite index. A low current rate should not erase poor traceability, and strong certification should not erase recent conversion.

System readout: Deforestation risk is highest when large clearing volumes, persistent historical pressure, commodity dependence and weak traceability occur together. A falling annual rate can improve the outlook without eliminating structural exposure.

 

Global Forest Area and the Baseline for Deforestation Risk

Understanding the resource at risk

The global forest estate of approximately 4.14 billion hectares is immense, but total area is only the starting point for risk analysis. Forests occupy about 32% of global land area, and average availability is roughly 0.5 hectares per person.

Naturally regenerating forests cover approximately 3.83 billion hectares and make up about 92% of total forest area. Primary forests, reported at no less than about 1.18 billion hectares, deserve special attention because their ecological structure, age and biodiversity can be difficult or impossible to recreate on commercial timescales.

Risk assessment should therefore avoid treating a hectare of mature tropical forest as interchangeable with a hectare of recently planted forest. Both may appear under a broad forest label, yet their loss or gain can have very different consequences for species, stored carbon, hydrology and local communities.

Indicator

Benchmark

Risk interpretation

Total forest area

4.14B ha

Global resource base

Forest share of land

32%

Extent of global forest cover

Forest per person

0.5 ha

Per-capita availability

Naturally regenerating forest

3.83B ha

Core natural-forest resource

Naturally regenerating share

92%

Dominance of natural regeneration

Primary forest

≥1.18B ha

High conservation significance

 

Forest readout: The global forest estate remains vast, but total area alone hides quality differences. Primary and naturally regenerating forests deserve particular attention because conversion can remove ecological characteristics that are difficult to recreate.

 

Global Deforestation Has Slowed, but the Absolute Risk Remains Large

Comparing historical and current annual loss

The global trend is one of measurable improvement. Average annual deforestation fell from approximately 17.6 million hectares during 1990–2000 to about 10.9 million hectares during 2015–2025. That is a reduction of roughly 6.7 million hectares in the annual rate compared with the earlier benchmark period.

Net forest loss shows a similar but even steeper change. The average rate declined from about 10.7 million hectares per year in the 1990s to around 4.12 million hectares annually in 2015–2025.

The distinction is critical. Gross deforestation captures direct conversion, while net change is an accounting balance. For deforestation-risk analysis, both numbers are useful, but gross conversion remains the clearer measure of direct land-use pressure.


Figure 1. Global forest-loss rates have declined substantially from historical levels, but millions of hectares continue to be converted each year.

Trend readout: Slower deforestation is evidence of progress, not resolution. The present annual rate remains large enough to sustain significant biodiversity, carbon and supply-chain risk.

 

Forest Expansion and Why Net Change Can Mislead

Forest expansion averaged about 9.88 million hectares per year during 2000–2015 and approximately 6.78 million hectares per year during 2015–2025. The decline in expansion means that the global system is not only losing forest more slowly; it is also adding forest at a slower average rate than in the earlier benchmark period.

This reinforces the danger of relying on net change alone. The ecological outcome depends on the type, location and age of both the forest lost and the forest gained.

For corporate risk analysis, gross loss is particularly important because it links more directly to land conversion and sourcing decisions. Expansion can support restoration goals and long-term recovery, but it should not be used to neutralize evidence of conversion at a supplier location.

Expansion readout: Net forest statistics are useful for national balance sheets, but deforestation risk requires gross-loss analysis because new forest growth does not automatically replace the ecological value of cleared natural forest.

 

Forest Carbon Sink and Emissions from Conversion

The climate dimension of forest loss

Forests have a dual climate role. The selected global benchmark estimates a net forest-land carbon sink of approximately 3.6 Gt CO₂ per year during 2021–2025.

Against that sink, emissions from net forest conversion are estimated at approximately 2.8 Gt CO₂ per year. These flows are not perfect mirror images because they come from different land processes, but the comparison demonstrates the climate significance of land-use change.

Deforestation therefore creates a double burden. Hectares alone cannot describe this effect because carbon density varies widely among forests and ecosystems.


Figure 2. Standing forests remove large quantities of carbon dioxide, while forest conversion generates substantial annual emissions and removes future sequestration capacity.

Carbon readout: Forest conversion creates a double climate burden by generating emissions while reducing the land's future capacity to absorb carbon.

 

Commodity-Driven Deforestation Risk

Which commodities create the largest global exposure

The selected commodity benchmark links seven major commodity groups to roughly 4.025 million hectares of annual deforestation during 2015–2020. Together they account for about 70% of agriculturally driven deforestation in the same benchmark.

Cattle is by far the largest individual driver at approximately 2.355 million hectares per year. Wood follows at around 675,000 hectares, oil palm at 392,000, soy at 224,000, cocoa at 187,000, rubber at 111,000 and coffee at 82,000. The distribution is highly uneven: cattle represents well over half of the selected seven-commodity total.

These figures should not be interpreted as identical forms of causality. Cattle risk often reflects pasture expansion and land occupation.

The key procurement implication is that one generic 'deforestation policy' is not enough. Each commodity has its own supplier structure, land-use history, traceability challenge and monitoring method.


Figure 3. Cattle dominates the selected commodity-linked deforestation benchmark, with wood and oil palm forming the next largest categories.

Commodity readout: Cattle dominates the selected commodity-linked deforestation benchmark, while wood, oil palm, soy, cocoa, rubber and coffee create additional concentrated supply-chain exposure.

 

Commodity Share of the Seven-Commodity Risk Pool

Converting the seven commodity figures into shares makes the concentration easier to see. Cattle contributes approximately 58.5% of the selected total. Wood contributes roughly 16.8%, oil palm about 9.7%, soy about 5.6%, cocoa about 4.6%, rubber about 2.8% and coffee about 2.0%.

This distribution suggests a tiered monitoring strategy. Cattle deserves the greatest attention because of its absolute scale.

The value of a composition view is prioritization. A company can begin with the commodities that dominate its purchasing exposure and the commodities that dominate global conversion pressure, then expand controls to lower-volume but geographically sensitive categories.

Composition readout: Commodity risk is highly concentrated rather than evenly distributed. This concentration allows monitoring systems to prioritize the supply chains responsible for the largest share of conversion pressure.

 

Cattle and Leather Supply Chains as a Deforestation Risk Case Study

Cattle is particularly important because one livestock system feeds several downstream sectors. Deforestation exposure therefore travels downstream into industries that may never purchase a live animal or raw hide directly.

The selected benchmark of approximately 2.355 million hectares per year makes cattle the largest commodity-linked category in the dataset. A tannery can operate efficiently and meet chemical standards while still receiving hides from a cattle system with unclear land-use history.

Traceability becomes difficult when animals move through multiple properties before slaughter. Direct-supplier controls are necessary, but they do not guarantee full cattle-origin visibility.

An effective leather-risk system therefore needs cattle-origin data, supplier history and location-level screening. Tannery audits alone cannot substitute for proof that upstream livestock production is not associated with prohibited conversion.

Cattle readout: Leather inherits land-use risk upstream from livestock production. Strong tannery controls cannot eliminate deforestation exposure when cattle origin and indirect supplier movements remain unclear.

 

Wood, Palm Oil and Soy Risk Profiles

Wood, oil palm and soy illustrate why deforestation controls must be commodity specific. Wood is associated with approximately 675,000 hectares of annual deforestation in the selected benchmark.

Oil palm accounts for approximately 392,000 hectares per year. Plantation expansion creates a different traceability problem because the relevant unit is often the producing estate or smallholder plot.

Soy contributes approximately 224,000 hectares per year. For procurement, the practical control is still origin: farm-level geolocation, production-area mapping and recent land-use history.

These three commodities show why a single deforestation number can arise from different supply-chain mechanisms. The measurement may be hectares, but the operational response depends on how the commodity is produced and traded.

Driver readout: The same deforestation metric can arise through very different supply chains. Effective risk screening therefore needs commodity-specific traceability rather than one universal control.

 

Cocoa, Rubber and Coffee Frontier Risk

Cocoa, rubber and coffee contribute smaller global totals in the selected benchmark: approximately 187,000 hectares, 111,000 hectares and 82,000 hectares per year respectively. Those figures are materially below cattle or wood, yet they can still represent severe local pressure in producing landscapes.

Smallholder systems create their own traceability challenge. That makes parcel-level monitoring more difficult unless geolocation is captured before product is mixed.

The correct comparison is therefore global scale versus local intensity. A commodity responsible for a smaller share of global deforestation can still pose a high risk to a buyer whose sourcing is concentrated in one frontier region.

Frontier readout: Smaller commodity totals can conceal severe local pressure. Deforestation screening should consider both global contribution and concentration within producing landscapes.

 

Brazil as a Long-Term Deforestation Risk Laboratory

Why the Legal Amazon series matters

The Legal Amazon dataset provides 38 annual observations for each of nine states from 1988 through 2025. That produces 342 state-year observations and allows the report to examine more than three decades of changing pressure rather than relying on a single recent snapshot.

The nine states are Acre, Amapá, Amazonas, Maranhão, Mato Grosso, Pará, Rondônia, Roraima and Tocantins. Their historical patterns differ sharply. Some states experienced extreme peaks in the 1990s and early 2000s before major declines.

This long series makes Brazil particularly useful for understanding structural risk. A one-year decline can look impressive, but a historical series reveals whether the decline is part of a sustained change, a temporary reversal or a shift in pressure between states.

Brazil readout: The Legal Amazon demonstrates why deforestation should be treated as a long-cycle risk. State rankings change over time, but persistent hotspots remain visible only when decades of data are examined together.

 

Legal Amazon Deforestation by State in 2025

In 2025, Pará recorded approximately 2,064 km² of deforestation in the state-level series, the largest value among the nine Legal Amazon states. Mato Grosso followed at about 1,593 km² and Amazonas at roughly 979 km². Together, these three states account for approximately 4,636 km² of the 5,731 km² consolidated Legal Amazon total, or about 81% of the monitored deforestation.

The remaining states were substantially smaller in absolute area: Acre at approximately 324 km², Roraima at 285 km², Rondônia at 229 km², Maranhão at 210 km², Tocantins at 30 km² and Amapá at 17 km².

Concentration is useful for enforcement and due diligence because resources can be prioritized around a small number of high-volume jurisdictions. It also means national averages can obscure very different subnational realities.


Figure 4. Pará, Mato Grosso and Amazonas account for most current Legal Amazon deforestation in the 2025 state-level series.

State readout: Current Legal Amazon deforestation is heavily concentrated, allowing monitoring and supply-chain due diligence to focus on a relatively small group of high-volume jurisdictions.

 

Pará: Persistent High-Volume Risk

Pará has remained one of the largest contributors to Legal Amazon deforestation across multiple decades. The state recorded about 6,990 km² in 1988, 7,845 km² in 1995 and a historical benchmark near 8,870 km² in 2004. By 2012 the annual rate had fallen to approximately 1,741 km².

The decline did not remain linear. Pará rose again to about 5,238 km² in 2021 before dropping to approximately 2,064 km² in 2025.

This pattern illustrates the difference between progress and low risk. A state can improve dramatically while still representing a large share of remaining deforestation.

Pará readout: A substantial decline from historical peaks does not remove Pará from the high-risk category because the state's absolute annual clearing remains one of the largest in the Legal Amazon.

 

Mato Grosso: Agriculture, Ranching and Historical Peaks

Mato Grosso shows one of the most dramatic peak-to-current trajectories in the dataset. The state recorded approximately 5,140 km² in 1988 and rose above 10,000 km² in several years, including about 10,391 km² in 1995, 10,405 km² in 2003 and 11,814 km² in 2004.

By 2010 the annual value had fallen to about 871 km², demonstrating the possibility of very large structural reductions. More recent values rose again, reaching about 2,213 km² in 2021 before easing to approximately 1,593 km² in 2025.

Mato Grosso is strategically important for agricultural due diligence because of its role in commodity production and because its historical experience shows how quickly land-use pressure can change. The report does not assign causality to a specific commodity from the state series alone; instead, it treats the history as a geographic risk context for cattle, soy and other agricultural supply chains.

Mato Grosso readout: Historical deforestation exceeded 10,000 km² in multiple benchmark years, illustrating how a major frontier can improve dramatically while remaining strategically important for agricultural due diligence.

 

Amazonas: Rising Pressure from a Historically Lower Base

Amazonas has a different pattern from Pará and Mato Grosso. The state recorded about 1,510 km² in 1988 and fell as low as approximately 405 km² in 2009. During the following decade, however, clearing increased: about 1,434 km² in 2019, 2,306 km² in 2021 and 2,594 km² in 2022.

By 2025 the annual value had declined to roughly 979 km². The recent reduction is encouraging, but the earlier rise demonstrates how deforestation pressure can migrate toward areas that historically had lower rates.

For risk teams, this is an early-warning signal. Percentage changes matter alongside absolute area.

Amazonas readout: Deforestation risk can migrate geographically. Rising clearing in areas that historically carried lower pressure can signal frontier expansion before they become the largest absolute hotspots.

 

Rondônia, Acre and Roraima: Mid-Tier and Volatile Risk

Rondônia experienced very high historical pressure, with annual deforestation exceeding 4,000 km² in some years. The 2025 value of approximately 229 km² is dramatically lower than those peaks.

Acre has generally occupied a mid-tier position. It recorded about 1,208 km² in 1995, rose to around 889 km² in 2021 and declined to approximately 324 km² in 2025.

Roraima operates from a smaller absolute base but can be volatile. It recorded about 590 km² in 2019, 468 km² in 2024 and 285 km² in 2025.

State-comparison readout: Lower absolute deforestation does not equal low monitoring priority when volatility, frontier movement or commodity expansion can change risk rapidly.

 

Maranhão, Tocantins and Amapá

Maranhão has also undergone a major long-run decline. The state recorded approximately 2,450 km² in 1988 and 1,745 km² in 1995, compared with about 210 km² in 2025. Tocantins declined from roughly 1,650 km² in 1988 to only about 30 km² in 2025.

Amapá remains the lowest-volume state in the latest year, with approximately 17 km² in 2025. Its historical series is generally much smaller than the major Amazon hotspots, although early years include higher values.

These cases demonstrate why a complete regional picture needs both high-volume and low-volume jurisdictions. A national or biome-level total is the sum of very different state histories, and risk management should avoid treating all locations as interchangeable.

Regional readout: The Legal Amazon contains both persistent high-volume hotspots and states that have experienced dramatic long-term declines. A strong risk model needs both current scale and historical trajectory.

 

Historical Peak Versus Current Deforestation by State

Comparing each state's historical maximum with its 2025 value reveals the scale of long-term change. Mato Grosso peaked at approximately 11,814 km², Pará at about 8,870 km² and Rondônia at around 4,730 km². Amazonas peaked at roughly 2,594 km², Maranhão at about 2,450 km² and Tocantins near 1,650 km².

Acre's historical maximum in the series is approximately 1,208 km², Roraima's about 630 km² and Amapá's roughly 410 km². Every state is below its historical maximum in 2025, in some cases by more than 80% or 90%.

The comparison should be read as evidence of long-run improvement, not proof of zero exposure. Remaining clearing can still be material, and future pressure can return when commodity prices, infrastructure, enforcement or land-market conditions change.

Historical readout: Most Legal Amazon states are far below their worst annual deforestation levels, but the distance from historical peaks should not be mistaken for zero current exposure.

 

2024–2025 Legal Amazon Change

Consolidated Legal Amazon deforestation declined from approximately 6,518 km² in 2024 to 5,731 km² in 2025. The year-over-year reduction is about 12.07%, representing a meaningful continuation of recent improvement.

One year, however, cannot establish a permanent trend. The interpretation is directional: 2025 is lower than 2024, but longer-term confirmation is still required.

Companies should also watch whether reduced Amazon pressure is accompanied by rising conversion in other biomes. A strong risk framework monitors several ecosystems rather than treating one headline Amazon number as a complete national indicator.


Figure 5. Consolidated Legal Amazon deforestation declined by approximately 12.07% from 2024 to 2025.

Annual-change readout: The 2025 decline is a meaningful positive signal, but long-term risk assessment should confirm whether reductions persist across multiple years and whether pressure is shifting into other biomes or states.

 

DETER Alerts and Near-Term Direction

Near-real-time alert data provides an additional layer of direction. The selected benchmark shows Amazon DETER alerts down approximately 37.5% for August 2025 through May 2026 compared with the prior comparable period. The May comparison alone is about 61.4% lower. Cerrado alerts are also down, by approximately 8.2% over the selected period.

Alert systems and consolidated annual deforestation statistics serve different purposes. Alerts are designed for rapid detection and enforcement response, while consolidated annual systems provide more complete measurement after processing and validation.

For companies, alerts are valuable because they shorten the time between land conversion and risk action. A newly detected clearing event near a supplier location can trigger enhanced due diligence before the next annual report is published.

Monitoring readout: Near-real-time alerts are most useful as an early-warning signal. They should guide enforcement and due diligence before consolidated annual statistics confirm the final extent of clearing.

 

Beyond the Amazon: Brazil's Biome-Level Conversion Risk

Brazil's land-conversion risk extends well beyond dense Amazon forest. The selected biome dataset records approximately 7,235.27 km² of native-vegetation suppression in the Cerrado, 3,484.37 km² in the Caatinga, 842.44 km² in the Pantanal, 523.14 km² in the Pampa and 475.18 km² in the Mata Atlântica.

These numbers should not be treated as identical to Legal Amazon deforestation because the underlying vegetation and monitoring definitions differ. They are nevertheless important because agricultural supply chains can convert savanna, woodland, grassland and other native ecosystems that may sit outside narrow forest definitions.

The Cerrado is especially significant because its selected annual suppression benchmark exceeds the consolidated 2025 Legal Amazon deforestation figure. The comparison is conceptual rather than directly equivalent, but it highlights the danger of an Amazon-only due-diligence screen.


Figure 6. Native-vegetation suppression remains substantial outside the Amazon, especially in the Cerrado and Caatinga.

Biome readout: Deforestation risk extends beyond dense tropical forest. Supply-chain screening should capture conversion of other native ecosystems where agricultural expansion can create substantial biodiversity and carbon impacts.

 

Cerrado Risk and Agricultural Expansion

The Cerrado benchmark of approximately 7,235.27 km² of native-vegetation suppression demonstrates the scale of non-Amazon land conversion. The biome contains large agricultural frontiers and is relevant to soy, cattle, leather and other supply chains.

Recent DETER alerts for the Cerrado are approximately 8.2% lower in the selected August 2025–May 2026 comparison. That directional improvement is useful, but the underlying conversion scale remains significant.

For procurement teams, the operational lesson is simple: biome coverage matters. Geolocation should therefore be screened against the correct native-vegetation dataset for the production region.

Cerrado readout: A supply chain can appear low risk under an Amazon-only screen while remaining exposed to substantial native-vegetation conversion elsewhere. Biome coverage is therefore a critical traceability variable.

 

Protected Forest Area and Conservation Buffers

The share of global forest area within protected areas increased from approximately 18.2% in 2015 to about 19.3% in 2025. The 1.1 percentage-point increase represents a gradual expansion of formal conservation coverage.

Regional variation is large. Central Asia is reported at approximately 56.9% in the selected benchmark, while lower regional examples are near 9.9%.

Protected status can reduce conversion risk, but designation is not the same as enforcement. Illegal clearing, fires, boundary incursions and pressure in surrounding landscapes can still affect protected forests.

Protection readout: Formal protection has expanded globally, but designation alone is not a complete risk control. Enforcement, boundary monitoring and surrounding land-use pressure determine whether protected areas function as effective buffers.

 

Forest Certification and Commercial Risk Reduction

Approximately 397 million hectares of forest are reported under certification schemes in the selected 2024 benchmark. Certified area has increased by about 15.5% since 2010, equivalent to roughly 53 million additional hectares. From 2023 to 2024 alone, the increase was approximately 7.6 million hectares.

Certification is geographically concentrated. North America and Europe account for approximately 78% of global certified forest area in the selected benchmark.

Certification can strengthen management assurance, documentation and chain-of-custody controls, but it is not a universal guarantee of zero deforestation. Companies still need origin information, geolocation and recent land-use screening, especially when certified products move through complex supply chains.

Certification readout: Certification strengthens forest-management assurance, but its geographic concentration means global supply chains still require independent traceability and land-conversion screening.

 

The EU Deforestation Regulation and Supply-Chain Risk

The regulatory environment is turning deforestation from an environmental reporting topic into a product-access and due-diligence issue. The EU framework covers seven core commodity groups: cattle, cocoa, coffee, palm oil, rubber, soy and wood, together with relevant derived products.

The same commodity families represent approximately 4.025 million hectares of annual deforestation in the selected 2015–2020 benchmark. The regulation's climate objective includes reducing carbon emissions linked to covered consumption and production by at least about 32 million tonnes of CO₂ annually.

Operationally, companies need to know what commodity is involved, where it was produced, which plot supplied it, when production occurred, who handled it upstream and whether the land meets legality and deforestation-free requirements. Geolocation is central because country-level declarations cannot prove what happened on a specific parcel.

The broader lesson is traceability quality now has commercial value. A supplier with complete coordinates, chain-of-custody records and land-use evidence can be screened more quickly than a supplier offering only invoices and country names.

Compliance field

Required business question

Risk if missing

Commodity identity

What regulated material is involved?

Scope uncertainty

Country of production

Where was it produced?

Geographic risk cannot be assessed

Plot geolocation

Which land parcel supplied it?

Conversion cannot be screened

Production date

When was material produced?

Cut-off testing becomes difficult

Supplier chain

Who handled material upstream?

Indirect exposure remains hidden

Legality evidence

Was production lawful?

Regulatory exposure

Deforestation screen

Was conversion detected?

Market-access risk

 

Regulation readout: Deforestation is increasingly a product-compliance issue rather than only an environmental metric. Firms need location-level evidence linking commodities to land-use history.

 

Direct Supplier Versus Indirect Supplier Deforestation Risk

Direct suppliers are the farms, traders or facilities that sell immediately into a company's purchasing chain. The distinction is particularly important for cattle because animals can move between properties before reaching the final ranch and slaughterhouse.

A company that maps only direct suppliers can create a false sense of coverage. Similar problems arise when cocoa, coffee or rubber is aggregated through collectors before entering a processor.

A practical visibility ladder moves from direct-supplier-only data, to direct plus known prior suppliers, to full-chain mapping with plot geolocation and land-use screening. Each step reduces uncertainty.

Traceability readout: Supply-chain visibility weakens rapidly when commodities pass through multiple intermediaries. Deforestation controls are strongest when geolocation follows the material through its full upstream history.

 

Deforestation Risk by Business Model

Physical conversion occurs at the production landscape, but risk moves through the entire value chain. Producers control land-use decisions most directly. Traders can preserve traceability by keeping origin records intact or weaken it by mixing materials without plot-level links.

Processors often aggregate material from many suppliers, increasing the importance of segregation and documentation. Brands and retailers carry regulatory, reputational and market-access exposure even when they never own land.

Financial institutions also have a role because lending and investment can be screened against commodity and geographic exposure. The strongest system aligns incentives across these business models so that traceability survives every handoff.

Business-model readout: Deforestation risk moves through the value chain even when physical forest conversion occurs far upstream. Every intermediary can either preserve traceability or weaken it.

 

Building the Deforestation Risk Index

The Deforestation Risk Index converts the report into eight weighted pillars. Current deforestation intensity receives 18%, the largest individual weight, because present clearing is the most direct observed signal. Historical persistence and trend receive 15%, ensuring that a one-year result is interpreted in the context of direction and repeated pressure.

Commodity exposure receives another 15%, reflecting the concentration of deforestation in cattle, wood, oil palm, soy, cocoa, rubber and coffee. Geographic hotspot concentration and traceability/geolocation each receive 13%.

Protection and governance receive 10%, carbon and ecosystem impact 9%, and disclosure plus regulatory readiness 7%. Higher scores indicate greater risk. Scores from 0 to 19 represent low observed risk, 20 to 39 moderate risk, 40 to 59 elevated risk, 60 to 79 high risk and 80 to 100 critical risk.

The index should retain sub-scores. A supplier may have low observed clearing but poor traceability, or strong certification while operating in a high-pressure frontier.

Index readout: High deforestation risk should not be assigned from geography alone. The strongest benchmark combines observed clearing with commodity exposure, historical direction, traceability and governance.

 

Deforestation Risk Market Challenges

The first analytical challenge is terminology. Tree-cover loss can include fire, harvest or temporary disturbance, while deforestation implies conversion to another land use. Native-vegetation conversion adds another layer because important ecosystems such as the Cerrado are not uniformly dense forest.

Gross and net statistics create another source of confusion. Forest expansion can reduce net loss even when high-value natural forest is being converted.

Supply-chain data creates practical limitations. Purchase records may identify a trader or processor without identifying the farm or plot.

Challenge readout: Deforestation statistics are most useful when definitions, geography, measurement period and supply-chain scope remain explicit. Mixing incompatible metrics can create false precision.

Regional Deforestation Risk Comparison

Regional comparison should not become a simplistic ranking of countries or continents. High forest cover does not automatically mean high risk, and low domestic deforestation does not remove exposure when a market imports commodities from high-conversion regions.

Tropical agricultural frontiers tend to require intensive plot-level screening because land conversion and commodity expansion can occur together. Mature certified forest markets may have stronger chain-of-custody systems and lower domestic conversion, yet they can still carry imported risk through global commodity supply chains.

The Legal Amazon offers exceptionally deep historical monitoring, while the Cerrado demonstrates the importance of native-vegetation conversion outside dense forest. The EU represents a different kind of regional risk: strong regulatory exposure that increases the value of due diligence, geolocation and documentary evidence.

Region/type

Main statistical signal

Primary risk issue

Main monitoring priority

Tropical agricultural frontier

High land-conversion pressure

Commodity expansion

Plot-level sourcing

Mature certified forest markets

High certification coverage

Residual/imported risk

Chain-of-custody

Legal Amazon

Long historical deforestation series

Persistent hotspots

State and supplier geolocation

Cerrado

High native-vegetation conversion

Agricultural expansion

Biome-level conversion

EU market

Strong regulatory exposure

Compliance

Due diligence and documentation

 

Regional readout: Risk geography should be interpreted through both environmental pressure and supply-chain controls. High forest cover does not automatically mean high risk, and low local deforestation does not eliminate exposure through imports.

 

Country-Level Deforestation Risk Signals

Brazil is the deepest country case in the dataset because of its long official monitoring series. Pará, Mato Grosso and Amazonas have very different current and historical profiles from Amapá or Tocantins.

Subnational evidence therefore matters. The same principle applies internationally: country risk is a first filter, not the final unit of due diligence.

Countries with low domestic deforestation can also be exposed through imports. A retailer or manufacturer may carry material forest risk even if its own operating country has strong forest protection, because the land-use footprint sits upstream in producing regions.

Country readout: Country labels are useful screening tools, but meaningful deforestation due diligence eventually needs to move from national averages toward subnational and plot-level evidence.

 

Buyer and Procurement Deforestation Decision Matrix

Procurement decisions should begin with commodity, origin and evidence quality. Cattle or leather from a frontier region should receive enhanced due diligence and full cattle-origin review. Soy from an expansion zone should require farm geolocation and conversion screening. Certified wood should still be checked for certificate validity, origin and chain of custody.

Coffee and cocoa sourced through smallholder networks require supplier mapping that can connect aggregated volumes back to farm groups or plots. Unknown-origin material is different: uncertainty should increase risk rather than reduce it.

The best sourcing decision is therefore not simply the cheapest or most certified option. It is the option whose environmental claim can be verified with location-level evidence and maintained through the supply chain.

Sourcing profile

Deforestation exposure

Evidence priority

Recommended control

Cattle/leather from frontier region

High

Full cattle-origin history

Enhanced due diligence

Soy from expansion zone

High

Farm geolocation

Conversion screen

Certified wood

Moderate/lower

Certificate + origin

Chain-of-custody validation

Coffee/cocoa smallholder network

Variable

Supplier mapping

Group-level traceability

Commodity from low-risk mapped plot

Lower

Geolocation confirmation

Routine monitoring

Unknown-origin commodity

High uncertainty

Origin evidence

Hold / escalate

 

Buyer readout: Unknown origin should not be interpreted as low risk. In deforestation-sensitive supply chains, missing traceability is itself a material risk factor.

 

The Deforestation Risk Report FAQ

How much forest does the world have?

Approximately 4.14 billion hectares, equal to about 32% of global land area. Roughly 3.83 billion hectares are naturally regenerating, and at least about 1.18 billion hectares are primary forest.

Is global deforestation slowing?

Yes. The selected benchmark falls from approximately 17.6 million hectares per year in 1990–2000 to about 10.9 million hectares per year in 2015–2025. Net forest loss also declines from roughly 10.7 million hectares annually in the 1990s to approximately 4.12 million hectares.

Which commodity creates the largest deforestation exposure?

Cattle is the largest category in the selected benchmark at approximately 2.355 million hectares per year. Wood follows at around 675,000 hectares and oil palm at about 392,000 hectares.

How much deforestation is associated with the seven major regulated commodities?

Approximately 4.025 million hectares per year in the selected 2015–2020 benchmark, representing roughly 70% of agriculturally driven deforestation in that analysis.

Why is cattle relevant to leather?

 Leather is a downstream cattle product.

How much Legal Amazon deforestation occurred in 2025?

 The consolidated figure is approximately 5,731 km², down from about 6,518 km² in 2024. The year-over-year decline is approximately 12.07%.

Which Legal Amazon states recorded the most deforestation in 2025?

 Pará is highest at approximately 2,064 km², followed by Mato Grosso at 1,593 km² and Amazonas at 979 km².

Is the Amazon the only Brazilian ecosystem facing conversion pressure?

No. The selected biome dataset records approximately 7,235.27 km² of native-vegetation suppression in the Cerrado, along with substantial conversion in the Caatinga, Pantanal, Pampa and Mata Atlântica.

How much global forest is protected?

Approximately 19.3% of forest area is within protected areas in the selected 2025 benchmark, up from about 18.2% in 2015.

How much forest is certified?

Approximately 397 million hectares in the selected 2024 benchmark. Certified area is about 15.5% higher than in 2010, and North America plus Europe account for roughly 78% of the total.

Does certification guarantee zero deforestation risk?

 No. Certification strengthens management assurance and chain-of-custody controls, but companies should still verify origin, geolocation and recent land-use history.

Final Takeaway

Approximately 4.14 billion hectares of forest remain worldwide, covering about 32% of global land. The long-term direction has improved: annual global deforestation has declined from approximately 17.6 million hectares in 1990–2000 to about 10.9 million hectares in 2015–2025. Net forest loss has also fallen substantially.

The remaining pressure is concentrated. Seven major commodities account for roughly 4.025 million hectares of annual deforestation in the selected benchmark, with cattle alone representing approximately 2.355 million hectares.

Brazil demonstrates both progress and persistence. Legal Amazon deforestation declined from approximately 6,518 km² in 2024 to 5,731 km² in 2025, yet Pará, Mato Grosso and Amazonas remain central monitoring areas.

The strongest deforestation-risk system is not the one that reports the lowest national number. It is the one that can connect every material commodity flow to a verified origin, a measurable land-use history and a credible pathway to zero conversion.

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