Agri-Food Deforestation andConversion Free (DCF) Sourcing
Criteria
Climate Bonds Standard & Certification Scheme“Agri-Food Deforestation and Conversion Free
Sourcing” Eligibility Criteria
Revision

Date

Summary of Changes

Rev. 2

12.04.2024

Final for PublicationRev. 129.02.2024

Adjusting for feedback from Public Consultation and TWG
members

Rev. 022.12.2023

Draft for Public Consultation

NOTE: These Criteria can be used to certify Agri-Food Entities as Deforestation and Conversion Free
under the Climate Bonds Standard

Climate Bonds Initiative – Agri-Food Deforestation and Conversion Free Criteria

Acknowledgements
Climate Bonds gratefully acknowledges the Technical and Industry Working Group
members who provided their time and expertise during the development of these
Criteria. The full list of members is provided in Appendix 2.
Special thanks are given to Dr Reyes Tirado, Agri-Food Lead at Climate Bonds andTechnical Lead in the Criteria, Dr Priyanka Agarwal, for coordinating the developmentof the Criteria through the Technical Working Group, and Mario Rautner, Supply Chain
Expert Consultant, for supporting the development of the Criteria.
The Industry Working Group provided critical and useability focused consultation andfeedback on the Criteria, but this does not automatically reflect agreement of thecriteria by all members.

1

Climate Bonds Initiative – Agri-Food Deforestation and Conversion Free Criteria

Table of Contents
Summary Tables ........................................................................................................................................ 3
Definitions ................................................................................................................................................... 7
1.

Introduction ...................................................................................................................................... 12
1.1

The Climate Bonds Standard .......................................................................................................... 12

1.2 What can be certified under the DCF Sourcing Criteria ............................................................. 14
1.3 Documents supporting these Criteria. ............................................................................................. 14

2.

Scope .................................................................................................................................................. 14
2.1 Entities and commodities in scope .................................................................................................... 14
2.2 Products in scope ..................................................................................................................................... 15
2.3 Entities out of scope ................................................................................................................................ 15
2.4 Materiality................................................................................................................................................... 15
2.5 Alignment with other Climate Bonds Sector Criteria ................................................................. 16

3.

Eligibility Criteria ............................................................................................................................. 17
3.1 Cut-off date .................................................................................................................................................. 17
3.2 Risk classification of origin................................................................................................................... 17
3.3 Traceability................................................................................................................................................. 17
3.4 Due diligence.............................................................................................................................................. 18
3.5 Monitoring .................................................................................................................................................. 19
3.6 Reporting ..................................................................................................................................................... 19
3.7 Verification ................................................................................................................................................. 19
3.8 Using existing third-party certification. .......................................................................................... 20
3.9 Human Rights requirements ................................................................................................................ 20

4.

Enabling activities aligned with 1.5°C pathways ........................................................... 22

Appendices .............................................................................................................................................. 23
Appendix 1: High-risk countries ................................................................................................................ 23
Appendix 2: Technical and Industry Working Group Members .................................................... 25

2

Climate Bonds Initiative – Agri-Food Deforestation and Conversion Free Criteria

Summary Tables
Summary Table 1. Summary table of scope for entities and commodities covered in this Agri-Food DCF
Sourcing Criteria.
Agri-Food DCF Sourcing
Criteria
Scope for:1 Agri-Food Entities

In Scope

Out of Scope-Entities with at least 50 percent of revenue
generated from agri-food supply chains.

- Entities at the producer(farmer or grower) level of agrifood commodities.

- Includes, but is not limited to, traders,processors, manufacturers, distributors andretailers.
- Entities to be certified as ‘Agri-Food DCF
Sourcing’ for 5 years.

2 Commodities- Any agri-food commodity that is producedon land or that is dependent on land-based
production.
- Includes but is not limited to commodities
commonly associated with deforestationand conversion risks, such as cattle, cocoa,
coffee, palm oil, pulp and paper for foodproduct packaging and soy.
- Includes animal products such as beef,chicken, and farmed seafood whose
production includes embedded high-risk
commodities such as soy or palm oil andother feed crops.

- Entities that use agri-foodcommodities for non-foodpurposes such as (but notlimited to) personal care,cleaning or industrial products
including paints, glues, leather
etc.
- Entities engaged withbioenergy (see Table 1).
- Timber, wood and other landgrown commodities inprocessed products not related
to the agri-food supply chain(e.g. personal care, paints).
- Production of bioenergy andleather are excluded since thecriteria focus on agri-foodcommodities only.

- Low-risk commodities are also in scope.
3 Materiality:
Certification Threshold- 90% of the economic activities (agri-food
net procurement spend) of an entity, and- All commodities that individuallycontributes 1% or more of the entity’s total
agri-food commodities net procurement
spend.

4 Enabling services
contributing to the goal of
deforestation and natural
ecosystem conversion
free sourcing

Agri-Food DCF Sourcing Criteria does notapply

Can be certified under Climate
Bonds Standard as for eligible
activities under Agriculture
Criteria.

3

Climate Bonds Initiative – Agri-Food Deforestation and Conversion Free Criteria

Summary Table 2. Summary table of Eligibility Criteria for Entities.
Eligibility Criteria
Requirement

Details1

Cut-off date

31 December 2020

Free from deforestation andconversion of natural ecosystems
in the supply chain of certifiable
entities since the cut-off date.

2

Risk Classification of Origin- High-Risk1 Origin

The criteria will follow agri-foodcommodity risk classification in
EUDR2* for cattle, cocoa, coffee,
palm oil, pulp and paper and soy
and Climate Bonds list for
deforestation risk for othercommodities.

- Low-Risk Origin*Until EUDR Risk Classification is
published, follow Climate Bonds
List (Appendix 1). For conversion
risk, list will be updated once
information is available.
3

Traceability

Full traceability of sourcing isrequired for all agri-foodcommodities representing at least
1% of procurement spend by theentity, with two levels:- High-Risk Origin and for cattle,
cocoa, coffee, palm oil, pulp andpaper and soy (of any origin):geolocation to the original
production land plot (polygon for >4ha or single point for < 4 ha3).
- Low-Risk Origin (except cattle,
cocoa, coffee, palm oil, pulp andpaper and soy): traced to countryof origin or primary processing
facility.4

1 Under these Criteria any countries or parts thereof which are considered under ‘standard risk’ category for EUDR, they will beconsidered under the ‘high-risk’ category. According to EUDR, standard-risk is used to ‘refers to countries or parts thereof
which do not fall in either the category “high-risk” or the category “low-risk”.’
2 Regulation - 2023/1115 - EN - EUR-Lex (europa.eu)
3 For less than 4 ha, the recommendation is to move towards sharing full polygon geolocation, as have done many smallholders(e.g. Indonesia) already.
4 With the commitment that by 2030 all agri-food commodities sourced will be traced to the geolocated plot of production.

4

Climate Bonds Initiative – Agri-Food Deforestation and Conversion Free Criteria

4

Due Diligence

Two levels of Due Diligencerequirements depending on AgriFood Commodity Origin:- High-Risk Origin: systems in place
to obtain sufficient evidence that
demonstrate that agri-foodcommodities are traceable to theirproduction units and free fromdeforestation and conversion since
December 31st, 2020. This includes
having risks assessment and risk
mitigation systems in place, where
needed.
- Low-Risk Origin: systems in place
to obtain sufficient evidence that
demonstratethat
agri-foodcommodities originate from lowrisk countries.5

5

Monitoring

High-Risk Origin: systems in place
to monitor the geolocatedproduction land plots for
deforestation and the conversionof other natural ecosystems.

6

ReportingPublicly disclose on an annual
basis:-Annual verification reports underthese Criteria and Climate Bonds
Standard.
-Tier 1 supplier lists for each agrifood commodity originating fromhigh-risk countries.

7

Verification

Climate Bonds Approved Verifiers
should have access to fulldocumentation of evidence(checklist to be provided).

Guidance on selective samplingby verifiers is also provided under
the Criteria.

5 A simplified due diligence can be followed for products or commodities from low-risk origins. For reference, under the EU

Deforestation Regulation (EUDR), as defined in Article 13 of EUDR ‘the obligations under Articles 10 and 11 [Risk Assessment andRisk Mitigation] where, after having assessed the complexity of the relevant supply chain and the risk of circumvention of thisRegulation or the risk of mixing with products of unknown origin or origin in high-risk or standard-risk countries or parts thereof,
they have ascertained that all relevant commodities and relevant products have been produced in countries or parts thereof thatwere classified as low risk.’ In short, for low-risk origin, due diligence needs to show evidence that the commodity originatingfrom low risk has not been mixed with commodities from high, standard or unknown risk origins.

5Climate Bonds Initiative – Agri-Food Deforestation and Conversion Free Criteria

8

Third-party certification

Proxy for compliance ofcommodities within the supply
chain.

Third-party certification can only
be used as a proxy if any givenlabel meets or exceeds all Climate
Bond Agri-Food DCF Sourcing
Criteria including segregated andtraceable supply (e.g. no massbalance).

9

Human Rights

Only Agri-food Entities withexisting programs that containproducer-level human rights and
IPLC safeguards can qualify forcertification.

At a minimum this will need toinclude the recognition of several
principles and conventions
including: FPIC, IBHR, ILO, UN and
OECD principles.
In the context of suppliers
operating with vulnerable groups
and smallholders, theseprovisions shall include
investments and capacity
building.

6

Climate Bonds Initiative – Agri-Food Deforestation and Conversion Free Criteria

Definitions
Agri-food Entity
Entities with at least 50% of revenue generated from agri-food supply chains.
Agri-food Commodities
Agricultural commodities, including those consumed directly (such as beef or cocoa), those used inprocessing or embedded in meat, farmed seafood, and dairy products (such as oil palm and soy in livestockfeed), and those used in the packaging of food products (such as pulp and paper).
Buyer6
A company that purchases raw materials, processed materials, or finished products from a supplier.
-

Buyers can include processors (e.g., mills or slaughterhouses), traders, manufacturers, andretailers. Traders buy raw or processed materials from farms or processing mills, while retailers
buy consumer products from manufacturers.

-

A given company can be both a supplier and a buyer.

Certified Entity7
The entity which is certified under the Climate Bonds Standard and Agri-Food Deforestation andConversion Free Sourcing Criteria.
Climate Bonds Certification
Certification is awarded by Climate Bonds if all the requirements under the Climate Bonds Standard that
apply at the time of Certification are met. Certification allows the applicant to use the Climate Bond
Certification Mark. Climate Bond Certification is provided once the independent CBSB is satisfied that the
Entity conforms with the CBS.
Climate Bonds Initiative (Climate Bonds)
An investor focused not-for-profit UK based organisation, promoting large-scale investments that will
deliver a global low-carbon and climate-resilient economy. Climate Bonds seeks to develop mechanisms
to better align the interests of investors, industry, and governments to catalyse investments at a speed
and scale sufficient to avoid dangerous climate change.
Climate Bonds Standard (CBS)A robust framework based on international best practice in green finance which defines the processes tobe followed and Sector Criteria that must be met to achieve certification under the Climate Bonds
Standard. The current version of the Climate Bonds Standard is published on the Climate Bonds website.

Climate Bonds Standard Board (CBSB)
6 AFi, 2020 Accountability Framework: Terms and Definitions
7 Climate Bonds Standards v.4, 2023

7

Climate Bonds Initiative – Agri-Food Deforestation and Conversion Free Criteria

An advisory committee set up to review the Standard, Sector Criteria, applications for certification under
the Standard and applications by prospective verifiers and to make recommendations to the Trustees andthe executive management of the Climate Bonds Initiative.
Conversion6
Note: The Criteria follow the definition from AFi (2020), with regards to requirements and verification forecosystem conversion different from deforestation (i.e. deforestation-free requirements follow EUDR
definitions).
Change of a natural ecosystem to another land use or profound change in a natural ecosystem’s species
composition, structure, or function.
--

Deforestation is one form of conversion (in these Criteria, following the EUDR definitions).
Conversion includes severe degradation or the introduction of management practices that result in a
substantial and sustained change in the ecosystem’s former species composition, structure, orfunction.
Change to natural ecosystems that meets this definition is considered to be conversion regardless ofwhether or not it is legal.

Cut-off date6
The date after which deforestation or conversion renders a given area or production unit non-compliant
with no-deforestation or no-conversion commitments, respectively.
Deforestation8
The conversion of forest to agricultural use, whether human-induced or not.
Note: For the purpose of these Criteria, this includes forest degradation for wood products (ie. pulp andpaper), as in EUDR. See definition of ‘Forest Degradation’.
Deforestation FreeThe relevant products contain, have been fed with or have been made using, relevant commodities thatwere produced on land that has not been subject to deforestation or the conversion of other natural
ecosystems after 31 December 2020.
Due diligence6
A risk management process implemented by a company to identify, prevent, mitigate, and account for
how it addresses environmental and social risks and impacts in its operations, supply chains, andinvestments.
Note: This definition of due diligence pertains to environmental and social issues in commodity supply
chains, consistent with the scope of the Accountability Framework. Other forms of business due diligence— such as financial and legal due diligence — are not included in this definition.
Forest8
Land spanning more than 0.5 hectares with trees higher than 5 metres and a canopy cover of more than

8 EUDR, 2023: European Union Deforestation Regulation

8

Climate Bonds Initiative – Agri-Food Deforestation and Conversion Free Criteria

10%, or trees able to reach those thresholds in situ, excluding land that is predominantly under agriculturalor urban land use.
Forest Degradation8
Structural changes to forest cover, taking the form of the conversion of: (a) primary forests or naturally
regenerating forests9 [including secondary forests, coppice, and those with non-native species]* intoplantation forests or into other wooded land; or (b) primary forests [including native or natural forests]*
into planted forests.10
This definition applies to degradation in wood production (ie. pulp and paper). For other non-forest
ecosystems, the AFi definition of Natural Ecosystem Degradation applies. *Clarifications introduced for the
Agri-Food DCF Sourcing Criteria verification procedures. Verifiers are required to annually check the HCV
status and area under management in plantation, planted, native, natural forest cover and other natural
ecosystems, including peatland subsidence, erosion and compaction.
Geolocation8
The geographical location of a plot of land described by means of latitude and longitude coordinatescorresponding to at least one latitude and one longitude point and using at least six decimal digits; forplots of land of more than four hectares used for the production of the relevant commodities other thancattle11, this shall be provided using polygons with sufficient latitude and longitude points to describe theperimeter of each plot of land.
Industry Working Group (IWG)
A group of key organisations that are potential applicants, verifiers, investors and other stakeholders
convened by Climate Bonds. The IWG provides feedback on the draft Sector Criteria developed by the
TWG before they are released for public consultation.
Natural ecosystem6
An ecosystem that substantially resembles — in terms of species composition, structure, and ecological
function — one that is or would be found in a given area in the absence of major human impacts. This

9 As per EUDR (2023), Article 2: “‘naturally regenerating forest’ means forest predominantly composed of trees establishedthrough natural regeneration; it includes any of the following: a) forests for which it is not possible to distinguish whether planted
or naturally regenerated; b) forests with a mix of naturally regenerated native tree species and planted or seeded trees, and where
the naturally regenerated trees are expected to constitute the major part of the growing stock at stand maturity; c) coppice fromtrees originally established through natural regeneration; d) naturally regenerated trees of introduced species.”
10 As defined in EUDR, 2023, Article 2: ‘planted forest’ means forest predominantly composed of trees established through planting
and/or deliberate seeding, provided that the planted or seeded trees are expected to constitute more than 50 % of the growing
stock at maturity; it includes coppice from trees that were originally planted or seeded; ‘plantation forest’ means a planted forestthat is intensively managed and meets, at planting and stand maturity, all the following criteria: one or two species, even age
class, and regular spacing; it includes short rotation plantations for wood, fibre and energy, and excludes forests planted forprotection or ecosystem restoration, as well as forests established through planting or seeding, which at stand maturity resemble
or will resemble naturally regenerating forests.
11 Establishments where cattle are kept can be described with a single point of geolocation coordinate. Operators (or traders thatare not SMEs) who place on the market cattle products must geolocate all establishments associated with raising the cattle,
encompassing the birthplace, farms where they were fed, grazing lands, and slaughterhouses. Frequently Asked Questions Deforestation Regulation - European Commission (europa.eu)

9Climate Bonds Initiative – Agri-Food Deforestation and Conversion Free Criteria

includes human-managed ecosystems where much of the natural species’ composition, structure, andecological function are present.
For these Criteria, this definition of natural ecosystems includes:-

Largely ‘pristine’ natural ecosystems that have not been subject to major human impacts in recent
history.

-

Regenerated natural ecosystems that were subject to major impacts in the past (for instance byagriculture, livestock raising, tree plantations, or intensive logging) but where the main causes ofimpact have ceased or greatly diminished and the ecosystem has attained species composition,
structure, and ecological function similar to prior or other contemporary natural ecosystems-

Managed natural ecosystems (including many ecosystems that could be referred to as ‘semi-natural’)where much of the ecosystem’s composition, structure, and ecological function are present.

-

Native grasslands or rangelands that are, or have historically been, grazed by livestock.

-

Natural ecosystems that have been partially degraded by anthropogenic or natural causes (e.g.,
harvesting, fire, climate change, invasive species, or others) but where the land has not been
converted to another use and where much of the ecosystem’s composition, structure, and ecological
function remain present or are expected to regenerate naturally or by management for ecologicalrestoration.

Natural Ecosystem Degradation 6
Changes within a natural ecosystem that significantly and negatively affect its species composition,
structure, and/or function and reduce the ecosystem’s capacity to supply products, support biodiversity,
and/or deliver ecosystem services.
Degradation may be considered conversion if it:-is large-scale and progressive or enduring.
alters ecosystem composition, structure, and function to the extent that regeneration to a previous
state is unlikely; orleads to a change in land use (e.g., to agriculture or other use that is not a natural forest or othernatural ecosystem).

Note: This definition applies to all natural ecosystems, except for forest degradation in pulp and paper
production (which follows EUDR).
Parent Company/GroupA company is considered a parent company of another entity (a subsidiary) if it exercises control over thesubsidiary. The terms ‘control’ and ‘subsidiary’ have the meaning assigned to them under International
Financial Reporting Standard 10 (IFRS 10). A Parent Group consists of the Parent Company and all thecompanies that the Parent Company exercises control over. Where the Applicant does not belong to agroup of companies, the term Parent Company in this Standard applies to the Applicant.

10

Climate Bonds Initiative – Agri-Food Deforestation and Conversion Free Criteria

Risk assessment6
A systematic process of evaluating potential risk in a company’s current or future operations, supply
chains, and investments.
-

In this context, this term refers to the assessment of risk of non-compliance with the company
commitments or applicable law related to Climate Bonds Standard scope, as well as adverse
impacts to internationally recognised human rights. This is different from the use of the term in a
general business context, where it refers to the assessment of financial risks and the drivers ofsuch risk (e.g., legal risk, credit risk, reputation risk, and others). The risk of adverse social andenvironmental impacts, including non-compliance with company commitments, can be an
important element of broader business risk.

Supplier6
A producer or company that supplies raw materials, processed materials, or finished products to a buyer.
--

Suppliers can include producers, processors, traders, and manufacturers. For instance, farms orprocessing mills supply raw or processed materials to traders, while manufacturers supply consumer
products to retailers.
A given company can be both a supplier and a buyer.
A supplier may either be a direct (tier 1) supplier (selling directly to the buyer) or an indirect (tier 2 or
beyond) supplier (selling to an intermediary that is one or more steps removed from the buyer).

Technical Working Group (TWG)
A group of key experts from academia, international agencies, industry, and NGOs convened by Climate
Bonds. The TWG develops the Sector Criteria - detailed technical Criteria for the eligibility of projects andassets as well as guidance on the tracking of eligibility status during the term of the bond. Their draft
recommendations are refined through engagement with finance and other industry experts in convened
Industry Working Groups and through public consultation. Final approval of Sector Criteria is given by the
CBSB.
Tier 1 Supplier
Immediate upstream business partner from which products or commodities are purchased directly.
Verification
Assessment and validation of compliance, performance, and/or actions relative to a stated commitment,
standard, or target. Verification processes typically utilise monitoring data but may also include othersources of information and analysis. The verification process is overseen by Climate Bonds. And theresulting report is used in awarding the Climate Bonds Certification mark.

11

Climate Bonds Initiative – Agri-Food Deforestation and Conversion Free Criteria

1. Introduction
1.1 The Climate Bonds Standard
Investor demand for climate bonds is strong and is expected to increase in line with the delivery of quality
products onto the market. However, investor concerns about the credibility of green labelling are also
growing. Standards, assurance, and certification will be essential to improve confidence and transparency,
which in turn will enable further strong growth in the market.
The Climate Bonds Standard and Certification Scheme is an easy-to-use screening tool that provides aclear signal to investors and intermediaries on the climate integrity of Certified Climate Bonds. A key partof the Standard is a suite of sector-specific eligibility Criteria. Each sector-specific Criteria sets climatechange benchmarks for that sector that are used to screen debt instruments, assets and/or entities, sothat only those that have climate integrity, either through their contribution to climate mitigation, and/or
to adaptation and resilience to climate change, will be certified.
These sector-specific Criteria are determined through a multi-stakeholder engagement process, including
Technical Working Groups (TWG) and Industry Working Groups (IWG), convened and managed by Climate
Bonds, and are subject to public consultation. Finally, they are reviewed and approved by the Climate
Bonds Standard Board (CBSB).
The ‘Agri-Food Deforestation and Conversion Free Sourcing’ Criteria is applied within an Entity-level label
under Climate Bonds Standard v4, designed to certify any entity within the agri-food value chain beyond
the point of agriculture production, that can prove its sourcing of commodities is free from deforestationand conversion of natural ecosystems (including degradation, see definitions).
Specifically, the ‘Agri-Food Deforestation and Conversion Free Sourcing’ (Agri-Food DCF Sourcing) Criteria
excludes any of these activities:
Purchasing, processing, trading, distributing or selling any agri-food commodities, products and derived
ingredients whose production, after 31 December 2020, has been linked to:-Conversion of any natural ecosystem to another land use, including, among others (seedefinitions):oDeforestation, including forest degradation.

oPeatland drainage, development or peat burning.

12Climate Bonds Initiative – Agri-Food Deforestation and Conversion Free Criteria

The EU Deforestation Regulation8 will require, starting 1 January 2025, that any trading of sevencommodities (i.e. cattle, cocoa, coffee, palm oil, soy, rubber and wood) to/from the EU to comply with aset of requirements to ensure they are “Deforestation Free” since 31 December 2020. The present Climate
Bonds Agri-Food DCF Sourcing Criteria aims to be in line with (and exceed in certain aspects) the EUDR
framework, so that any entity certifying with this Climate Bonds Agri-Food DCF Sourcing Criteria has inplace the necessary systems to potentially comply with the EUDR trading requirements.
Note: The separate Climate Bonds Agriculture Criteria includes requirements for climate and othersustainability aspects of food production at the farm level, including land use change, mitigation of climate
emissions, adaptation and resilience to climate impacts and issues around biodiversity, water, and justtransition. The Agriculture Criteria is available for certification of Assets, UoP, Entities and SLDs for foodproduction units (farms and farming operations).

Box 1: EU Deforestation Regulation and Climate Bonds ‘Agri-Food
Deforestation and Conversion Free’ Certified
Climate Bonds ‘Agri-Food Deforestation and Conversion Free’ Certification includes and expands
the requirements under the EU Regulation on Deforestation-free Products (EUDR) that come into
effect 1 January 2025.
The current Criteria set aims to be in line with the requirements set out by the EUDR, hence
entities certifying with Climate Bonds has the systems in place to be compliant with EUDR.
However, EUDR requirements are targeted at any trading happening across EU borders, at theoperators and consignment level. In contrast, Climate Bonds ‘Agri-Food Deforestation andConversion Free’ Certification takes place at the Entity level, encompassing any agri-food sourcingthat the Certified Entity is engaging with, at the global scale.
Climate Bonds ‘Agri-Food Deforestation and Conversion Free’ Certification expands EUDR
requirements principally in that: 1) it includes not only deforestation, but also the conversion of
any other natural ecosystems, and 2) it includes all agri-food commodities being sourced by acompany, including those from High-Risk Origin as well as those from Low-Risk Origin.
For Deforestation requirements, Climate Bonds has followed requirements set out by EUDR (2023)
to ensure alignment and to facilitate harmonisation and cross-compliance of global entities.
Hence, definitions and rules for the deforestation element of Climate Bonds ‘Agri-Food
Deforestation and Conversion Free’ Certification, always follows EUDR.
For Conversion requirements, which are not currently part of EUDR, Climate Bonds has followed
guidelines set out by AFi (2020), a global initiative aiming to reach sector-wide consensus. This isreflected in the definitions and throughout these Criteria.

13

Climate Bonds Initiative – Agri-Food Deforestation and Conversion Free Criteria

1.2 What can be certified under the DCF Sourcing Criteria
These Criteria are targeted at Agri-Food Entities: Companies operating within the food value chain whichsource agriculture commodities that are land-based and whose production might involve land use change
from natural ecosystems (e.g. forests, peatlands, savannas).

1.3 Documents supporting these Criteria.
-

Climate Bonds Standard 4. Section E for ‘Agri-Food Deforestation and Conversion Free Sourcing’Label for Agri-Food Entities
European Union Regulation on deforestation-free products (EUDR, 2023)
European Union EUDR Frequently Asked Questions
Accountability Framework initiative Core Principles and Operational Guidance documents.
Accountability Framework initiative Terms and Definitions, 2020. Accountability Framework:
Terms and Definitions

2. Scope
2.1 Entities and commodities in scope
Entities can be certified under these Criteria if more than 50 % percent of their revenue is linked to agrifood commodity supply chains. This includes but is not limited to traders, processors, manufacturers,
distributors, and retailers.
Agri-food commodities that are in scope include any commodity that is produced on land or that isdependent on land-based production. This includes but is not limited to commodities commonly
associated with deforestation and conversion risks, such as cattle, cocoa, coffee, palm oil, pulp and paper(when used in the production of paper and packaging materials or as a food ingredient) and soy. However,the scope of these Criteria is not limited to any specific commodities associated with deforestation risks,and hence entities sourcing commodities from low-risk origin can also be certified.
If entities source animal products such as beef, dairy, pork, chicken, or farmed fish that were produced
using feed containing agri-food commodities, certification of those entities will include assessment of
those embedded commodities as well.

14

Climate Bonds Initiative – Agri-Food Deforestation and Conversion Free Criteria

2.2 Products in scope
The Criteria apply to all agri-food products derived from agri-food commodities independently of theirprocessing level. Highly processed food products, pulp and paper and livestock-based food products (andtheir feed inputs) are also within the scope of these Criteria.

2.3 Entities out of scope-

Entities at the producer (farmer or grower) level of agri-food commodities (these are covered by
the Agriculture Criteria, updated in 2024).
Entities that use agri-food commodities for non-food purposes such as (but not limited to)personal care, leather, cleaning or industrial products including paints, glues, fuel feedstocks, etc.

Note: Assets, Use of Proceeds, Entities and Sustainability-Linked Debt instruments that enable or service
the goal of sourcing free of deforestation and natural ecosystem conversion (e.g., entities operating in theland-use change monitoring or traceability system space) can be certified under Climate Bonds Standard
v.4 as 1.5°C Aligned for eligible activities under the Agriculture Criteria.

2.4 Materiality: Certification Threshold
Any agri-food commodity (including its derivates and fractions) within the supply chain of the entity that
accounts for 1% or more of the entity’s net procurement spend on agri-food commodities, food products,
and food product ingredients is within scope of these Criteria.
In addition, the ‘Certification Threshold’ where compliant activities represent at least 90% of agri-food net
procurement spend of an entity, also applies.
In practice this means that very small (<1% of procurement spend) purchases of agri-food commodities
fall outside the scope of these Criteria as long as 90% of the entity's total agri-food net procurement spend
is included.
Note: The Criteria on materiality also apply to products or ingredients manufactured by third parties thatare sold or distributed by certified entities (such as retailers for instance).

15

Climate Bonds Initiative – Agri-Food Deforestation and Conversion Free Criteria

2.5 Alignment with other Climate Bonds Sector Criteria
Climate Bonds has developed other Criteria across various sectors. The most common examples related to land, andthe appropriate Sector Criteria to use are summarized in Table 1.
Table 1: Assets or projects partially or wholly covered by other Sector Criteria.
Related land-use activities

Activities covered by other criteria

Production of agriculturecommodities

Agriculture production

Agriculture Criteria

Forestry, land conservation
and restoration

Forestry assets and projects

Forestry Criteria

Biomass for electricity
production

Biomass crops or forestry for electricity
production

Bioenergy Criteria

Waste management

Waste management

Waste Management Criteria
Source:Climate Bonds Criteria

Climate Bonds own elaboration

In addition to the current Agri-Food DCF Sourcing Criteria, the Climate Bonds Standard v.412 includes
provisions for the Parent Company and Parent Group which seek certification under other Sector Criteria,
which requires their commitment to being deforestation and conversion free across their activities.
Any entity certification requires that the Parent Company (which has control over the entity):‘The Parent Company has, within the last year, publicly (re)committed that as of 31 December 2020, no
entity within the Parent Group has or will engage in deforestation or conversion of other natural
ecosystems.’

12 Climate Bonds Standard Version 4. Globally Recognised, Paris-aligned certification of debt Instruments, Entities and Assets using

robust, science-based methodologies. Please assure that the latest version of Climate Bonds Standards is used.
https://www.climatebonds.net/standard/the-standard

16

Climate Bonds Initiative – Agri-Food Deforestation and Conversion Free Criteria

3. Eligibility Criteria
3.1 Cut-off dateNo deforestation or conversion of other natural ecosystems13 has taken place on farms or production
units where the agri-food commodities within the supply chains of certified entities were produced from31 December 2020.

3.2 Risk classification of origin
Entities that source or use commodities, products or ingredients originating from countries with high-riskof deforestation or natural ecosystem conversion are required to carry out additional due diligence andmonitoring activities (see section 3.4 and 3.5 below).
For cattle, cocoa, coffee, palm oil, pulp and paper, and soy the risk classification provided by the European
Union for deforestation risk will be used (once published) to differentiate between high- and low-risk
origin.
Until the publication of the risk classifications by the EUDR and for commodities not included by the EUDR,
Appendix 1 contains a list developed by Climate Bonds for classification of countries into high- and lowrisk of deforestation, including the methodology used to compile it. Based on data availability for tree
cover14 and tree cover loss, this list is completed for 58 countries. For the countries that are not coveredin the list, the categorisation will have to be carried out by the Climate Bonds Approved Verifier (asexplained in Appendix 1) using the same methodology. This list will be reviewed, consulted on, andupdated as appropriate; the methodology will evolve as more data becomes available.
For conversion of natural ecosystems, a risk classification could not be carried out due to data
unavailability at the global scale. Entities are expected to carry out their own risk classification of origin inline with these Criteria´s methodology, which will be evaluated by Approved Verifiers during thecertification process.

3.3 Traceability
Full traceability of sourcing is required for all agri-food commodities representing at least 1% of net
procurement spend by the entity on agri-food commodities (and at least 90% of their agri-food net
procurement spend), with two levels:
13 Forests: use EUDR, Other Natural Ecosystems: use AFi definitions.
14 https://www.globalforestwatch.org/blog/data-and-research/global-forest-watch-and-the-forest-resources-assessment-

explained-in-5-graphics-2/

17

Climate Bonds Initiative – Agri-Food Deforestation and Conversion Free Criteria- High-Risk Origin and for cattle, cocoa, coffee, palm oil, pulp and paper and soy (of any origin):geolocation to the original production land plot (polygon for > 4ha or single point for < 4 ha).15- Low-Risk Origin (except cattle, cocoa, coffee, palm oil, pulp and paper and soy): traced to country oforigin or primary processing facility.16
Agri-food commodities and their derivatives (including feed embedded in animal products) from high-risk
origin (see list in Appendix 1) are required to be traceable to the geolocation of the original production
land plot. This applies to any agri-food commodities and products from high-risk origin, irrespective if
currently not included in the EUDR. Likewise, the traceability requirement of geolocation applies to cattle,
cocoa, coffee, palm oil, pulp and paper and soy from both high-risk and low-risk origins, as per EU
legislation requirement.8
Agri-food commodities from low-risk origin (except for cattle, cocoa, coffee, palm oil, pulp and paper andsoy) are required to be traced to a level that ensures the country of origin of the production ofcommodities can be determined. In many cases this may be the primary processing facility. From 1 January2030, all commodities are required to be traceable to the geolocation of the original production land plot
independent of the risk classification of their country of origin.
Commodities and products that are demonstrably in compliance with, and included under the EUDR are
considered traceable and in compliance with these Criteria for the deforestation part. To be certified withthese Climate Bonds Criteria they would also need to comply with the Conversion element, i.e., free ofnatural ecosystem conversion, beyond forests.
To be compliant with these Criteria all traceable DCF agri-food commodities need to be segregated from
commodities of unknown origin or from non-DCF commodities at every step of the supply chain. Massbalanced supply chain models that allow for the mixing of DCF with non-DCF commodities are noncompliant with these Criteria.

3.4 Due diligence
For agri-food commodities originating from high-risk origin and for any cattle, cocoa, coffee, palm oil, pulp
and paper and soy, supply chain actors are required to have due diligence systems in place to obtainsufficient evidence that demonstrate that commodities are traceable to their production units and havebeen free from deforestation and conversion as of 31 December 2020.
Conversely, for any other agri-food commodities originating from low-risk countries, supply chain actors
would need to provide sufficient evidence that sourced agri-food commodities are traceable to countryof origin or production facility.

15 consistent with the definitions and processes of the EUDR, 2023. For plots < 4 ha, Climate Bonds recommends presenting

polygon geolocation.
16 With the commitment that by 1 January 2030 all agri-food commodities sourced will be traced to the geolocated plot of
production.

18

Climate Bonds Initiative – Agri-Food Deforestation and Conversion Free Criteria

Entities can decide which due diligence systems to use depending on their context and needs. Companies
can put in place their own due diligence systems as long as full and verifiable traceability to production
geolocation is ensured. Due diligence systems can follow the requirements of the EUDR (to avoid
replication of procedures), and similar systems can be used for commodities and products that are notcurrently included in the EUDR or for commodities and products that are not placed on the EU market.
Due diligence should include sufficient information, risk assessment and risk mitigation, where needed.

3.5 Monitoring
For agri-food commodities originating from high-risk origin, entities are required to demonstrate thatsystems are in place that monitor the geolocated production land plots for deforestation and theconversion of other natural ecosystems.
Entities can put in place their own monitoring systems to ensure full and verifiable traceability to
production geolocation.

3.6 Reporting
Entities are required to publicly disclose on an annual basis:-

Annual verification reports under these Criteria.
Tier 1 supplier lists for each agri-food commodity originating from high-risk origin.

3.7 Verification
The verification of entities is carried out annually by Climate Bonds approved verifiers.
Verifiers will carry out verification of traceability data through randomly selected sampling:
A. For agri-food commodities from high-risk origin:
Verification of geolocation of production units free of deforestation and no conversion since 31
December 2020, of at least 10% of the procured volume and at least 10% of the total number ofsuppliers of the combined high-risk agri-food commodities (including for any processed products).
For entities that have livestock products in their supply chains, it is a requirement that in addition to thegeolocation of where the animals were raised, the agri-food commodities used in the feed are also
geolocation-verified to originate from deforestation and conversion free land plots. At least 25% of thesamples selected for such companies are required to consist of livestock supply chains (in both sampledprocured volume and total number of suppliers).
B. For agri-food commodities from low-risk origin:

19

Climate Bonds Initiative – Agri-Food Deforestation and Conversion Free Criteria

Verification of low-risk country of origin of at least 10% of the procured volume and at least 10% of
the total number of suppliers of the combined non-high-risk agri-food commodities (including for any
processed products).
For entities that have livestock products in their supply chains, it is a requirement that the animals wereraised in low-risk countries and that agri-food commodities used in the feed were grown in low-riskcountries. Any feed that includes agri-food commodities from high-risk countries has to be verified atgeolocation of land plots. At least 25% of the samples selected for such companies are required to consistof livestock supply chains.
To enable the verification process, certified entities are required to give Climate Bonds verifiers access to:i. Supplier lists and associated purchasing volumes per commodity per country of origin.
ii. Due diligence statements from their suppliers consistent with the requirements under the EUDR.
iii. Geolocation data for all agri-food commodities and their derivatives as per the requirements set underthese Criteria.
iv. Calculations and source data for companies claiming that individual agri-food commodities fall below
the 1% commodity procurement spend.
v. If a third-party certification proxy is used, access to all communication with the certification body,
including but not limited to chain of custody certificates as well as evidence that all eligibility Criteria aremet.
vi. Any deforestation monitoring reports carried out by the entity or provided to the entity by a supplier
including any deforestation alerts and actions taken.
VII. Evidence of programmes that contains producer-level human rights and IPLC safeguards.

3.8 Using existing third-party certification.
Existing schemes certifying no deforestation or conversion of natural ecosystems since 31 December 2020
or earlier can be used as ‘proxy’ to support compliance, in relation to due diligence and risk assessmentswith the Agri-Food DCF Sourcing Criteria only for fully segregated or identity persevered supply chains andif they meet all other eligibility Criteria in this document, including traceability requirements to the levelset here (Section 3.3).

3.9 Human rights requirements
Only Agri-food Entities with existing programmes that contain producer-level human rights and IPLC
safeguards can qualify for certification.
At a minimum this will need to include the recognition of several principles and conventions including:20

Climate Bonds Initiative – Agri-Food Deforestation and Conversion Free Criteria-Free, Prior and Informed Consent (FPIC)-International Bill of Human Rights-

ILO Declaration on the Fundamental Principles and Rights at Work and Social Policy-

UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational
Enterprises-

ILO Declaration on the Fundamental Principles and Rights at Work and the ILO Tripartite-

Declaration of Principles concerning Multinational Enterprises and Social Policy.

In the context of suppliers operating with vulnerable groups17 and smallholders, these provisions shall
include investments and capacity building. It is recommended that investments in support and capacity
building aim at re-investing 2% of profits (as currently done by some entities in the sector).

17 According to IFC GN48 https://www.ifc.org/content/dam/ifc/doc/2021/20210614-ifc-ps-guidance-note-1-en.pdf

21

Climate Bonds Initiative – Agri-Food Deforestation and Conversion Free Criteria

4. Enabling activities aligned with 1.5°C pathways
Assets and Use of Proceeds instruments that enable sourcing free of deforestation and natural ecosystem
conversion (e.g. entities operating in the land-use change monitoring or traceability system space) can becertified under Climate Bonds Standard v.4 for eligible activities under Climate Bonds Agriculture Criteria.
Examples of such activities include, but are not limited to:-Traceability software or hardware systems.
Satellite monitoring systems.

22

Climate Bonds Initiative – Agri-Food Deforestation and Conversion Free Criteria

Appendices
Appendix 1: High-risk countries
Methodology
The methodology used to identify high- and low-risk countries/jurisdictions of origin relies on Global
Forest Watch.18 For each jurisdiction, the Deforestation risk is assessed based on the ratio of total naturalforest land lost for the last 5 years (2018-2022) relative to the total natural forest cover in 2000.
If this ratio is higher than 1%, then we consider the risk to be high. The risk is low for values below 1%.
Data used:
To indicate jurisdictions of high-risk, Global Forest Watch (GWF) data is used for jurisdictions where the
GFW platform provides both data for natural forest cover and loss of natural forest (not including
plantations). The data used in this calculation is for canopy density of 30% and predominantly available
for tropical countries but currently, only available only for 58 jurisdictions.
Formula:𝑇𝑜𝑡𝑎𝑙 𝑛𝑎𝑡𝑢𝑟𝑎𝑙 𝑓𝑜𝑟𝑒𝑠𝑡 𝑙𝑜𝑠𝑠 𝑏𝑒𝑡𝑤𝑒𝑒𝑛 2018 𝑡𝑜 2022
× 100
𝑁𝑎𝑡𝑢𝑟𝑎𝑙 𝑓𝑜𝑟𝑒𝑠𝑡 𝑐𝑜𝑣𝑒𝑟 𝑖𝑛 2000

If, > 1% = High-risk, if < 1% = Low-risk

18 Global Deforestation Rates & Statistics by Country | GFW (globalforestwatch.org)

23

Climate Bonds Initiative – Agri-Food Deforestation and Conversion Free Criteria

Table Appendix 1: List of countries/jurisdictions and their deforestation risk classification based on 10%
canopy cover based on data from Global Forest Watch (Source: Global Deforestation Rates & Statistics byCountry | GFW (globalforestwatch.org)).
Based on data
forCategories

Number of
Jurisdictions

10% Canopy
density

High-Risk

41

Low-Risk

17

Jurisdictions

Australia, Åland, Argentina, Bangladesh, Belize,
Brazil, Cambodia, Chile, China, Colombia, Côte
d'Ivoire, Democratic Republic of the Congo,
Ecuador, Ghana, Guatemala, Honduras, India,
Indonesia, Laos, Liberia, Malawi, Malaysia,
Mexico, Mozambique, Myanmar, Nicaragua,
Nigeria, Panama, Paraguay, Peru, Philippines,
Solomon Islands, South Africa, South Korea, Sri
Lanka, Swaziland, Syria, Tanzania, Thailand,
Turkey and Vietnam
Akrotiri and Dhekelia, Azerbaijan, Bhutan,
Cameroon, Cyprus, Gabon, Georgia, Japan,
Kenya, Kosovo, Nepal, New Zealand, Papua New
Guinea, Rwanda, United States, Uruguay and
Venezuela

24

Climate Bonds Initiative – Agri-Food Deforestation and Conversion Free Criteria

Appendix 2: Technical and Industry Working Group Members
Climate Bonds Technical Lead:
Reyes Tirado

Agri-Food Lead

Climate Bonds Coordinator:

Supply Chain Expert Consultant:Priyanka Agarwal

Mario Rautner

Agri-Food Analyst

TWG Members
The TWG develops the Criteria by consensus. Each TWG member contributes to the Criteria development in their personal
capacity and as a content expert in the field. This contribution does not imply endorsement either from Climate Bonds
Initiative to the organisation the member is currently employed with, nor of the organisation to this work.

Mark Day

South Pole

Alan Kroeger

Satelligence

Lifeng Fang

RSPO

Grant Rosoman

Xiaotian Fu

WRI China

Leah Samberg and Niall Robb

Aida Greenbury

4F Foundation

Yu XinWWF ChinaFrank Hicks

Nature for Justice

Chunquan Zhu

World
Economic
Forum China

Lisandro Inakake

Imaflora

Mario Zenteno

WWF Bolivia

GreenpeaceInternational
Rainforest
Alliance(Accountability
Framework
Initiative)

IWG Members
Members of the following organizations have participated in the Criteria process, providing critical and useability focused
feedback on the Criteria, but this does not automatically reflect agreement of the Criteria by all members.

Emma Fourdan

CarbonSpace Tech

Flavia Pacheco

earthdaily

Caroline Busse

Nadar

Steven Ripley

SIM (Sustainable Investment
Management)

Ingrid C Graziano

Cargill

Hernan Rodriguez Arias

UcropitMartina Favale

Unilever

Simi Thambi

FAIRR

Jingjuan Fan

Muyuan Foods

Ingrid van Beuzekom

BanQu

Julia Bolton

IFC

Matthew Watkins

Lombard Odier

Monica Pedo

John Deere25