Methodologies and references
Methodologies

Selection of SCF focus municipalities

We used the following methodological approach to determine the 61 focus municipalities for SCF member reporting and collective action. The original 25 focus municipalities – most of which are still at the top of the list of native vegetation conversion to soy – remain in the scope:

  • Out of the 5,570 municipalities in Brazil, focus municipalities must have at least 95% of their territory in the Cerrado.
  • The area of planted soy in focus municipalities must be larger than 5,000 hectares (PAM/IBGE 2020).
  • Focus municipalities must be within the region’s top municipalities as measured by:
    1. Area of native vegetation converted to soy (Agrosatélite 2019/20 Soy Expansion Report, and PRODES 2018/2019) and,
    2. Availability of remaining native vegetation in legal reserves suitable for soybeans.
  • Focus municipalities must have at least two SCF members operating (sourcing or have physical presence) within their boundaries.

We will review and update our scope and focus municipalities every three years, according to the latest data available.

Monitoring traceable volumes

Members use the following methodological approach to individually produce the volume key performance indicators reported annually:

  1. Soy volume sourced in the Cerrado: The proportion (in tons) of soybean volume sourced by the member company from the Cerrado biome, in municipalities with at least 95% of its territory in the biome, compared with the total volume sourced out of Brazil by the reporting company. This information is reported as the percentage of soy sourced in Cerrado and the percentage of soy sourced in other biomes.
  2. Soy volume sourced in focused municipalities in the Cerrado: From the total determined in the first step, the percentage of soybean volume produced in the focus municipalities, by considering the origination municipality. This information is reported as the percent of soy sourced in focus municipalities and the percent of soy sourced in other Cerrado municipalities.
  3. Direct and indirect sources: From the total in the second step, the percentage of soybean sourced directly from farmers and the proportion sourced from third parties, by considering the type of activity of the supplier (using the supplier’s tax registry number as a source). This information is reported as the percentage of direct sources in focus municipalities and the rate of indirect sources in focus municipalities.
  4. Volume traceable and not traceable: From total volume of direct sources in the third step, the proportion of volume that is traceable to farm/s, by considering farm location information provided by the supplier. Volumes are classified as traceable to farm when there is a polygon of the farm where soy was produced. This information is reported as a percentage of direct sources traceable to farm in the focus municipality. Companies will obtain at least 95% of direct soy volumes as traceable to farm as of December 2020.

Reporting methodology for soy sourced by joint ventures

There are six factors to consider when reporting soy sourcing of joint ventures (JV) associated with an SCF member company. They depend on the awareness of JV operated volumes; control of JV operations; and purchasing from a JV.

For each of these, there is a yes/no answer. The consolidated scenarios are:

  1. When a company knows the JV’s overall volumes
      • If the SCF member controls the JV operations (e.g., it manages soy purchases from the JV), regardless of if it sources from the JV or not: report volume equivalent to its share on the JV as direct.
      • If the SCF member does not control the JV but sources from it: report volumes effectively sourced to the SCF member as indirect.
      • If the SCF member does not control and does not source from the JV: report volumes equivalent to its share as indirect.
2. When a company does not know the JV’s overall volumes because it has no control (i.e. it does not manage soy purchases from the JV):

  • If it sources from the JV: report as indirect.
  • If it does not source from the JV: report volume as indirect based on the financial revenue from the JV through the mathematical rationale described below:
  • As a participant of the JV, company has revenues from JV expressed in USD $ 000 (A)
      • Company has its own total revenue for the country expressed by USD $ 000 (B)
      • A/B = X% of JV revenue representativeness over the company revenue. Companies shall consider such X% as a percentage of the company’s total origination volume.
      • Companies shall add X% to the % of sourcing from the area and report as indirect.
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Reporting methodology for deforestation- and conversion-free (DCF) soy

Measuring and reporting on DCF soy involves two indicators, each based on different data sources. Soy volumes sourced by joint ventures will integrate DCF calculations according to the established “reporting methodology for soy sourced by joint ventures” described above.
  1. Reporting via individual company data

Data sources:

  • Monitoring Farm area (polygon): based on data available from each company supply
  • Soy area by polygon: Agrosatélite study for the crop year 2020/21 or active farm monitoring by companies individually
  • Conversion area: PRODES Cerrado 2020 or similar private monitoring service

Indicator:

  • DCF percentage of each company in the 61 focus municipalities (FMs)

To calculate each SCF member company’s verified DCF soy footprint, the following indicator is used:

Total volume of verified DCF soy purchased from farms in 61 FMs = % Verified DCF
Total volume of soy purchased from farms in 61 FMs (direct and indirect)

On the calculations of DCF percentage and volumes at farm-level, a 25-hectare threshold is applied, below which soy production can be considered as DCF. This indicator will allow for progress to be shown over time, as increasing monitoring will be implemented throughout the whole sourcing chain. Thus, the indicator shows the extent to which companies have effectively monitored and verified soy volumes as DCF. Such individual results are verifiable.

2. Reporting via external databases (common indicator of 61 municipalities by the SCF, not a company’s individual indicator)

Data sources:

    • Average municipality yield of the last three crop years (2017/18, 2018/19 and 2019/20) with available information from IBGE (Brazilian Institute of Geography and Statistics) 
    • Conversion data from PRODES Cerrado 2020, adopting a threshold of 25 ha as minimum converted area 
    • Soy area from Agrosatélite study commissioned by ABIOVE for crop year 2020/21 

To calculate the percentage of DCF soy at landscape level in the 61 focus municipalities, the following indicator is used:

 

Total volume of DCF soy of 61 FMs = % of DCF soy in the 61 focus municipalities
Total volume of soy of 61 FMs

Verification protocol of data for traceability and deforestation- and conversion-free performance

The purpose of the protocol is to verify the Deforestation- and Conversion-Free (DCF) soy sourced from the focus municipalities (FMs) defined by the SCF, as well as proving that volumes are indeed traceable to farm. The protocol will be performed on an annual basis, on the calendar year prior to the current year of disclosure (e.g. the KPIs to be disclosed in 2022 refer to calendar year of 2021).

The verification will be carried out assessing a sample of traceable suppliers. The sampling should be based on soy sourcing commercial reports, presenting a list of contracts from the 61 FMs with indication of farm polygon for the ones that are traceable to farm, including direct and indirect purchases.

In terms of the definition ascribed, “verification” considers that the information is validated by persons other than those involved in monitoring the operation or entity being assessed. Furthermore, “first-party verification” considers that the verification is carried out by personnel from the same company that did not participate in the operations under verification, whereas “third-party verification” encompasses an independent entity that does not provide other services to the company being audited.

A set of information should be checked by the party responsible for carrying out the verification process. Those include, but are not limited to:

  • Digital copies of purchase contracts
  • Digital copies of invoices (minimum one)
  • Farm polygons
  • Deforestation and conversion assessments
  • Registries of DCF indicator calculation
References
  1. ABIOVE and Agrosatélite, 2021. Technical Report: Cerrado soy dynamics with focus on the 61 priority municipalities updated for crop year 2019/20 vs. PRODES 2014-2019. Available on: https://wbcsdpublications.org/scf/wp-content/uploads/2021/06/Soy_Dynamic_2019-20_AGROSATELITE_SCF_V1.pdf
  2. Rudorff, B.; Risso, J., 2021. Cerrado soy dynamics on the SCF 61 focus municipalities updated for crop year 2020/21 VS. PRODES 2014-2020. Agrosatélite Applied Geotechnology Ltd. Florianópolis-SC, Brazil, 2021 17 p. Available on: https://wbcsdpublications.org/scf/wp-content/uploads/2021/12/Soy_Dynamic_2020-21_AGROSATELITE_SCF_November_2021.pdf
  3. Rudorff, B.; Risso, J., 2022. The 61 focus municipalities updated for crop year 2020/21 vs. PRODES 2020. Agrosatélite Applied Geotechnology Ltd. Florianópolis-SC, Brazil, 2022. Available on: https://wbcsdpublications.org/scf/wp-content/uploads/2022/06/DCF-performance-on-SCF-61-focus-municipalities_Agrosatelite.pdf
 Full list of the 61 SCF focus municipalities
Aparecida do Rio Negro TO State of Tocantins
Baixa Grande do Ribeiro PI State of Piauí
Balsas MA State of Maranhão
Campos de Júlio MT State of Mato Grosso
Campos Lindos TO State of Tocantins
Carolina MA State of Maranhão
Correntina BA State of Bahia
Currais PI State of Piauí
Formosa do Rio Preto BA State of Bahia
Goiatins TO State of Tocantins
Jaborandi BA State of Bahia
Lagoa da Confusão TO State of Tocantins
Mateiros TO State of Tocantins
Mirador MA State of Maranhão
Monte do Carmo TO State of Tocantins
Peixe TO State of Tocantins
Pium TO State of Tocantins
Planalto da Serra MT State of Mato Grosso
Porto Nacional TO State of Tocantins
Riachão das Neves BA State of Bahia
Ribeiro Gonçalves PI State of Piauí
Sambaíba MA State of Maranhão
Santa Rosa do Tocantins TO State of Tocantins
São Desidério BA State of Bahia
Uruçuí PI State of Piauí
Abreulândia TO State of Tocantins
Água Boa MT State of Mato Grosso
Água Fria de Goiás GO State of Goiás
Alto Araguaia MT State of Mato Grosso
Araguacema TO State of Tocantins
Barra do Ouro TO State of Tocantins
Barreiras BA State of Bahia
Buritizeiro MG State of Minas Gerais
Cabeceiras GO State of Goiás
Campo Novo do Parecis MT State of Mato Grosso
Caseara TO State of Tocantins
Caxias MA State of Maranhão
Corrente PI State of Piauí
Cristalina GO State of Goiás
Dois Irmãos do Tocantins TO State of Tocantins
Fernando Falcão MA State of Maranhão
Gilbués PI State of Piauí
Gurupi TO State of Tocantins
Itacajá TO State of Tocantins
Itapiratins TO State of Tocantins
Luís Eduardo Magalhães BA State of Bahia
Marianópolis do Tocantins TO State of Tocantins
Niquelândia GO State of Goiás
Nova Nazaré MT State of Mato Grosso
Novo Acordo TO State of Tocantins
Novo São Joaquim MT State of Mato Grosso
Paracatu MG State of Minas Gerais
Pastos Bons MA State of Maranhão
Pedro Afonso TO State of Tocantins
Poxoréu MT State of Mato Grosso
Riachão MA State of Maranhão
Santa Filomena PI State of Piauí
Santa Maria do Tocantins TO State of Tocantins
Sebastião Leal PI State of Piauí
Sucupira do Norte MA State of Maranhão
Unaí MG State of Minas Gerais