mature plantations cover 14.2 million hectares (ha) of land. Remote sensing estimates suggest that more than 4 million ha of forest there have been converted for rubber cultivation since 1993, an area roughly the size of Switzerland. Of this, more than 1 million ha are in Key Biodiversity Areas.124 In addition, rubber demand is expected to grow by nearly 20% from 2019 to 2027, from $28.65 billion to $33.87 billion.125 –For leather,126 a fifth of all bovine leather produced globally from cattle for the meat industry is estimated to go into cars, including over 40% of all leather produced in Brazil, where cattle ranching is the number one direct driver of deforestation. Automotive manufacturers can engage with meat producers to support deforestation-free cattle supply chains. For upstream inputs from the mining, agriculture or forestry sectors, the area of influence of projects is generally larger than the direct physical footprint due to both indirect and cumulative impacts. In particular, infrastructure development can attract human populations to remote locations, causing new threats or exacerbating pre-existing threats, such as over-exploitation (e.g. hunting, fishing, logging), introduction of invasive or exotic species (e.g. through inadvertent introduction by humans) and habitat loss for other land uses (e.g. agricultural expansion).127,128,129 Activities can also violate the rights of Indigenous Peoples as well as of local communities, for example, where operations affect areas of high ecological, cultural or community significance. These impacts can be more pronounced when local communities and rightsholders are not meaningfully engaged, when Indigenous Peoples’ rights to self- determination and free, prior and informed consent (FPIC) are not respected,130 or when robust human rights due diligence activities are not undertaken to avoid causing or contributing to negative human rights impacts. Alongside upstream impacts, direct operations and downstream activities can also lead to land- use change and ecosystem disturbance. For example, this can occur when land is cleared to make way for manufacturing sites, warehouses and dealerships. Likewise, the increase in the size of average vehicles is leading to increased size and quantity of vehicle infrastructure (including roads and new car parks). Some companies have started to take action to identify and eliminate deforestation in supply chains. For example, Mercedes-Benz sources a small share of the leather in its supply chain from Brazil (approximately 5%). Of this, more than half of the hides are sourced from closed-cycle farms, which allows complete traceability back to the cattle’s birth farm. In addition, work is being done to create greater transparency for the other hides. To this end, Mercedes-Benz has signed a memorandum of understanding with a local supplier and an international non-governmental organization (NGO), committing to working together to pursue deforestation-free supply chains for leather. The collaboration includes the implementation and verification of tracking systems for the traceability of refined leather back to its origin. For this purpose, the origin of the hides is documented and checked for violations using satellite images and other data. This procedure is also monitored by third parties. Skins identified as critical are excluded from further processing into products for Mercedes-Benz, with the aim being to gradually increase the proportion of these audited hides. Source: Mercedes-Benz Group. (n.d.). Against deforestation. https://group.mercedes-benz.com/responsibility/sustainability/climate- environment/against-deforestation.html.CASE STUDY 1 Managing leather-related deforestation risk in automotive supply chains Nature Positive: Role of the Automotive Sector 23

Nature Positive Role of the Automotive Sector