Problem Statement
In the global trade ecosystem, verifying the origin of goods is crucial for compliance with trade regulations, ensuring product quality, and maintaining consumer trust. Traditional methods of tracing goods often rely on paperwork that can be susceptible to fraud, loss, or errors. This lack of transparency and accountability in the supply chain can lead to significant issues, including the circulation of counterfeit products, violations of trade sanctions, and loss of revenue for genuine manufacturers and suppliers. Companies that have committed to eliminating deforestation in their supply chains are struggling to demonstrate measurable reduction in deforestation due to lack of appropriate and cost-effective forest monitoring systems and reliable imagery.
How EO Helps
EO technologies can significantly enhance the traceability and verification of the origin of goods by providing unbiased, timely, and accurate data directly from the source of production. This data is crucial for validating sustainability claims from organizations, ensuring transparency and accountability. EO can help in the following ways:
Economic Impacts | Environmental Impacts |
Supply chain transparency increases consumer confidence, allowing products to access premium markets that demand ethical sourcing. | EO-backed traceability can significantly contribute to reducing preventable deforestation. For example, in 2004 the Brazilian government adopted an aggressive policy to limit Amazon deforestation rates which included strengthening satellite monitoring systems and, within a few years, large scale deforestation dropped by roughly 50%. |
Automated EO monitoring reduces the need for costly on-site inspections, lowering logistics and compliance costs. | EO helps monitor sustainable, low-carbon practices. Certified supply chains generate less carbon compared to uncertified counterparts due to better land-use practices. |
Early detection of supply chain risks (e.g., deforestation or environmental violations) prevents delays and legal challenges. Disruptions to raw material availability can cost industries billions globally, particularly in sectors like textiles and electronics. | Traceability ensures that sourcing does not encroach on protected ecosystems, avoiding habitat destruction. |
Case Study: Nestle Palm Oil Transparency Dashboard
Since 2017, Starling has been helping Nestlé better understand the complex deforestation patterns in palm oil producing areas, including where deforestation occurs, what its key drivers are, and who is involved. Nestlé leverages the Starling satellite monitoring system to engage suppliers and address deforestation risks within its supply chain. Upon receiving alerts, they engage directly with suppliers linked to the mills around the detected alert to verify supply chain connections, assess measures taken to mitigate deforestation risks, and foster collaboration. This engagement, supported by precise data, enables suppliers to verify their no-deforestation commitments and helps Nestlé allocate resources effectively. When necessary, they collaborate with Earthworm Foundation and their suppliers for on-the-ground verification to inform decision-making, including potential suspensions.
Additionally, Starling aids in identifying priority locations for forest conservation, engaging smallholders and plantation companies, and collaborating with local governments for integrated land use planning. Using Starling data, Nestlé piloted a forest footprint analysis in Aceh, Indonesia, to assess future deforestation risks and land rights conflicts, with plans to scale up this work for preventive action. Nestlé's approach underscores the importance of technology and partnerships in promoting sustainable sourcing and reducing deforestation within its supply chain.