UK plans law to force big companies to clean up their supply chains

LONDON (Reuters) - Britain said on Monday it would start a consultation process on a potential new law which would force big companies to clean up their supply chains by fining them if they used products grown on illegally deforested land.

Prime Minister Boris Johnson, who is due to host the United Nations’ climate summit in November 2021, has promised to “build back greener” from the coronavirus pandemic which caused its economy to shrink by a fifth in the second quarter.

Under the proposed new legislation, larger companies which operate in Britain would need to show that any commodities they used in their supply chain, such as cocoa, rubber, soy and palm oil, are produced in accordance with local laws, or face fines.

The new law would help deter the destruction of rainforest in order to grow agricultural products elsewhere in the world, said the government’s Department for Environment, Food and Rural Affairs in a statement, adding that the level of fines would be set at a later date.

“There is a hugely important connection between the products we buy and their wider environmental footprint, which is why the government is consulting today on new measures,” said international environment minister Zac Goldsmith.

Many big companies already have sustainable sourcing policies in place for commodities.

Consumer goods giant Unilever ULVR.L, for example, has a commitment to source 100% of its palm oil, which is used in cooking, snack foods, soaps and shampoos, from sustainable sources. The consultation will run for six weeks.

Reporting by Sarah Young; editing by Michael Holden