The Business Guide to Sustainable & Responsible Soy Supply Chains
Responsible & Sustainable Soy Supply Chains
- Increased global soy production has led to rising deforestation, both directly and indirectly. The shift to sustainable and responsible soy sourcing is necessary to safeguard business, people, and our planet. When done right, sustainable soy prioritizes the general welfare of ecosystems to boost crop yields while protecting arable land.
- The race to meet EUDR compliance for soy supply chains has begun. Time is of the essence for ensuring your soy is deforestation-free and audit-proofing your supply chain.
- By implementing supply chain traceability initiatives, you can monitor regenerative and deforestation-free practices at the farm/plantation level, providing verifiable data to support your sustainable soy claims.
Soy is a high-demand commodity (found in tofu, edamame, and soy milk) commonly favored by advocates of plant-based diets due to its protein-rich characteristics. However, 77% of soy production is used for animal feed, particularly poultry and pigs - the primary driver of increasing soy demand. Over the past several decades, global soybean production has skyrocketed, increasing 15 times over since the 1950s. Today, Brazil, the United States, and Argentina are responsible for producing 80% of the world's soy.
The environmental challenges accompanying increased soy production have cast a shadow on its contributions. One of the most pressing concerns is deforestation, with forests – critical for biodiversity and decarbonization – cleared for soy cultivation. In response, the European Union has taken proactive measures with the recently enacted deforestation-free regulation (EUDR). Continue reading to learn how you can boost responsible soy production to audit-proof your business and secure EU market access.
Is soy production sustainable?
The boom in global soy production over the last 50 years means two things: improved crop yields or land expansion for soybean growth. Research indicates that, of the two, land expansion has contributed to most soy production. In South America, for instance, the amount of land used for soy cultivation increased more than 200 times between 1961 and 2017. Unfortunately, this expansion of soy cultivation has led to deforestation, both directly and indirectly. It is common for land to be cleared for cattle ranching and then later rented or sold for soy production. This, in turn, often indirectly leads to deforestation by pushing cattle ranching into forest areas with the incentive of selling land at a higher price.
Experts recommend reducing the environmental impact of soy production by shifting soy demand from livestock food chains to direct human consumption. If meat protein is replaced with soy protein, agricultural deforestation could decrease by up to 94% since less land is needed for soy cultivation. As global meat production is projected to rise – 22% for pork and 26% for poultry by 2025 – the most realistic solution is transitioning to regenerative agriculture and responsible sourcing.
Various organizations, such as the Round Table on Responsible Soy (RTRS), promote good agriculture practices within the soy industry. Such practices include reduced-till or no-till farming, crop rotation, proper water and nutrient management, and planting cover crops. When done right, sustainable soy prioritizes the general welfare of ecosystems to boost crop yields while protecting arable land. By implementing supply chain traceability initiatives, you can monitor regenerative and deforestation-free practices at the farm/plantation level, providing verifiable data to support your sustainable soy claims.
The business benefits - and common challenges - of sourcing sustainable soy.
The common challenges of sourcing soy:
- Environmental harm: The expansion of soy plantations has resulted in harmful farming practices, including using heavy machinery, synthetic inputs, high water consumption, and clearing of native vegetation. This has caused soil erosion, water pollution, and high greenhouse gas (GHG) emissions. In fact, 41% of the 8.1 gigatonnes of CO2 equivalent GHG emissions released annually by animal agriculture is attributed to animal feed, which often contains soy.
- Farm-level visibility: Soy supply chains usually begin at the plantation or farm, then move on to crushing facilities for processing, refining and manufacturing, distribution and trading, and finally retail and consumption. While many brands have some knowledge of the processing level, they often lack complete information about the farm or plantation where their soybeans are grown. This can lead to compliance and disruption risks due to uncertainty about the origins of your supply chain.
The benefits of sourcing sustainable soy:
- Regulatory Compliance: With EU due diligence regulations on the rise - such as the EUDR, ESRS, CSRD - auditable proof of your sustainable sourcing claims can safeguard your business against costly fines or shipment seizures. Responsible farming data tied to your product’s traceability will keep your soy supply chain compliant.
- Supply Chain Resilience: As desertification rises, implementing regenerative farming will preserve arable land for your production and future-proof your business. Additionally, the source-level visibility needed to monitor regenerative farming can equip your brand with valuable data on where your supply comes from to mitigate disruption risks (e.g., corruption, natural disasters) and boost strategic forecasting.
- Brand Reputation: As consumers continually prioritize the well-being of people and our planet in their purchasing decisions, brands demonstrating their commitment to sustainability will gain customer loyalty (and can even charge a premium for their products!). Though transitioning to sustainable soy production may involve some short-term expenses, the long-term rewards are worth it in terms of securing a loyal customer base.
How to produce deforestation-free, sustainable soy.
With the December 2024 compliance deadline fast approaching, the race to meet EUDR compliance for soy supply chains has begun. The below tips will guide you in kickstarting your deforestation-free soy journey:
1. Geo-located Plot of Land
Demonstrating your soy is deforestation-free during an audit will require verifiable evidence about your product’s provenance. You will need to capture the geo-coordinates of the plots of land at the farms or plantations where your soybeans are grown. Using methods like satellite imagery or public cadasters, you can verify the land has not contributed to deforestation. The geo-located farm/plantation will need to be linked to the transaction history of your soybeans at the source and maintained throughout the chain of custody to ensure your final product is not mixed with non-compliant soy.
2. No mass balance
Mass balance mixes non-compliant and compliant commodities during production. To keep your final product completely deforestation-free and secure EU market access in accordance with the EUDR, your entire batch must be compliant, not just a portion of it. Product segregation, when soy from multiple certified sources is kept segregated from ordinary, non-compliant soy throughout production, is necessary to certify your final product is deforestation-free.
3. Maintained batch chain of custody
Tracking the chain of custody of each batch, from the plot of land to distribution and every step in between will keep your supply chain audit-proof. Digitally tracking your product's social and environmental footprint from seed to shelf creates an accurate record of who and what it impacts. Preserving primary source data tied with your product’s chain of custody lets you confidently demonstrate deforestation-free status at the farm/plantation level.
5 tips for selecting a reliable responsible soy traceability solution.
Whether you are an EU-based tofu brand aiming to prove deforestation-free soy or a supplier exporting soybean oil to the EU market wanting to prove provenance, implementing a trustworthy traceability partner will be a critical determinant of your success. With the plethora of traceability software and solutions available, selecting the right partner for your business can feel overwhelming. The below criteria will guide you in selecting the right traceability system for your business:
1. Farm-Level Data
Your traceability partner should efficiently capture all required data at the farm or plantation level. Many traceability solutions are built product backward, meaning they start at your tier-one suppliers who then continue to request information from vendors. This can be problematic because your vendors may provide inaccurate data and, if you reach the farm-level, the infrastructure of product-backward traceability systems is not efficient in remote areas where smart devices don’t work or exist. The best traceability systems are built from the ground up, starting with primary data collection at the source and following your product's journey. Doing so will maintain data integrity and reduce inconsistencies from unreliable sources.
2. Transaction-Based Data
To demonstrate ethical and responsible soy sourcing, your traceability partner must link primary source data to your final product. In the event of an audit, you should be able to pinpoint the precise origin of a batch, such as the farm location. This involves connecting compliance details, such as plots of land or farmer wages, to the transaction history at the source. Your sustainability and compliance data must be connected with your product's procurement information at the source to monitor deforestation-free practices accurately.
3. Boots on the Ground
Like most supply chains, soy sourcing can be complex due to the vast amount of players involved in your value chain. Your traceability partner should have the global expertise to understand the cultural and geographic barriers that may impact the success of your supply chain and sustainability programs. They should provide in-field implementation and ongoing support with completely accessible software for remote working conditions. Additionally, they must be agile in developing solutions to unexpected challenges - so your programs can stay as efficient as possible.
4. Real-Time Tracking
Spot audits, Excel sheets, and high-level shipping data will no longer cut it in today’s compliance landscape. To keep your soy responsible and compliant, you will need a traceability solution with real-time track and trace capabilities. Receiving up-to-date information and reports on your soy’s social and environmental impacts tied to your traceability data will enable your brand to stay proactive in decarbonization and sustainability efforts.
5. System Interoperability
Maintaining data integrity will require complete interoperability with the numerous systems incorporated throughout your supply chain. Implement a reliable traceability platform that seamlessly integrates with any existing systems you use (e.g., ERP, MRP, PLM) to manage your procurement, sustainability, and compliance data. Doing so will create a single source of truth to streamline data analysis and reduce inconsistencies. Additionally, your traceability system should leverage supplier’s data to avoid double data entry and build on any missing information. Selecting a blockchain-based, decentralized solution will provide the utmost security of confidential information to encourage supplier engagement.
Sustainable Soy Conclusion
The surging demand for soy has brought to light significant environmental challenges that necessitate a shift towards responsible production practices. Balancing the benefits of soy production with its environmental footprint is crucial, particularly in the context of escalating deforestation and resource depletion. The European Union's deforestation-free regulation (EUDR) urges the industry to adopt ethical sourcing and robust traceability mechanisms. Implementing supply chain traceability initiatives – with primary data from the farm/plantation level – will enable you to make data-driven decisions to keep your supply chain auditable and compliant. Ultimately, embracing responsible soy production through regenerative sourcing and reliable data can future-proof your business while contributing to a healthier world.
BanQu is an advanced traceability platform built for companies across all industries, with multi-purpose solutions to achieve audit-proof EUDR compliance, prove responsible soy production, and drive strategic sourcing. Our blockchain-based traceability platform was built from the ground up – so you can track and trace your soy from the farm/plantation it originated and eliminate supply uncertainties. Schedule a free risk assessment with our expert team today!