As Hochul Weighs Deforestation Bill, Sysco Steps in to Lobby

While Hochul considers a bill to pressure state contractors to stop deforestation, the massive food supplier is voicing concerns to her administration.

Julia Rock   ·   November 27, 2023
A Sysco truck against a background of logging
New York could become the first state to regulate deforestation in companies’ supply chains. | Getty Images via Canva; Wikimedia Commons

UPDATE: On December 22, Governor Kathy Hochul vetoed the tropical deforestation-free procurement act. “Imposing this burden on State vendors would drive them away from doing business with the State and put at risk important government operations,” she wrote in a memo accompanying the veto.

“This decision from the Governor sends a dangerous message that New York is not going to do its part,” bill sponsor Liz Krueger said in a statement.

The multinational food corporation Sysco has mounted a quiet campaign to lobby Governor Kathy Hochul as she decides whether to sign what is arguably the most consequential climate legislation on her desk.

The bill aims to leverage New York’s massive spending power to stop companies that contract with the state government from contributing to tropical deforestation, the cause of more than 10 percent of global greenhouse gas emissions. It passed the state legislature with bipartisan support in June, months after the European Union enacted a similar measure.

Four months after its passage, Sysco registered to lobby Hochul on the legislation. Known as the world’s largest food distributor, Sysco has more than $200 million in contracts to provide food to various state agencies — and clear links to deforestation. Major Sysco beef suppliers JBS and Cargill have long track records of clearing forested lands. Numerous Sysco products contain palm oil, a product notorious for decimating tropical forests.

Sysco’s recent lobbying activity has not previously been reported, and its campaign has taken place behind the scenes. Though Sysco has not made any public comments about the bill, it appears to have the Hochul administration’s ear.

The Office of Government Services, the agency that oversees state contracts and would be tasked with implementing the new rules, has raised concerns from Sysco in conversations with bill sponsor Senator Liz Krueger, according to her office. “Sysco had told them it would be difficult to comply with the legislation,” said Justin Flagg, Krueger’s director of communications and environmental policy.

New York would be the first state to regulate deforestation in companies’ supply chains. The legislation’s backers aim to shift the practices of large multinationals like PepsiCo, Nestle, Cargill, and Procter & Gamble, whose products the state buys.

“The bill is about using New York’s economic leverage, through its procurement, to require companies to change the way their supply chains impact tropical forests,” said Jeff Conant, director of the International Forests Program at Friends of the Earth and one of the bill’s architects.

The legislation’s global reach has drawn the attention of international environmental and human rights organizations, as well as indigenous leaders from regions where industrial agriculture endangers tropical forests.

“Despite our different contexts, we are united on a mission to stop deforestation in the world’s tropical forests — a critical effort to defend frontline communities, protect biodiversity, and curb the climate emergency,” wrote Krueger and the Ecuadorian indigenous leader Juan Carlos Jintiach in a joint September op-ed.

California’s legislature passed a similar bill in 2021, but Governor Gavin Newsom vetoed it, citing the “significant burden” it would create for small businesses to comply.

“New York is the place to watch,” said Vanessa Fajans-Turner, executive director of Environmental Advocates NY. “This is the biggest climate bill sitting on the governor’s proverbial desk.”

State contracting presents an enormous market: In 2021, the most recent year for which data is available, New York had more than 18,000 contracts worth $173 billion. The Tropical Deforestation-Free Procurement Act would require contractors that use commodities from tropical forests to certify that their products were not sourced from land that has been degraded or deforested since January 1, 2023. That includes commodities like coffee, beef, palm oil, and paper, which the state buys for uses including school lunches, prison meals, and office materials.

The bill would also close loopholes in a 1995 state ban on the use of tropical hardwoods for public infrastructure like docks, park benches, and rail infrastructure. The city of Long Beach took advantage of those loopholes in 2013, repairing its two-mile-long boardwalk with hardwood logged from old-growth Amazon rainforests.

First proposed in 2021, the deforestation bill was amended this spring to exclude boreal forests from its protection after business groups and other entities, like the Metropolitan Transit Authority, raised concerns with the initial text. (The MTA declined to comment on its stance on the final legislation.)

Even in its narrowed form, the bill faced opposition from building material suppliers and other companies. The Empire State Forest Products Association, which represents landowners, lumber companies, and timber harvesters, warned of increased costs “from the bottom to the top of the supply chain.” Hochul’s staff have expressed concerns about the impact on small businesses.

But investors from firms managing more than $2.5 trillion in assets weighed in to support the legislation, arguing it would “provide investors with important information” on climate-related risks to their portfolios, as did more than two dozen companies that do business in the state and the New York Sustainable Business Council.

In the European Union, companies have begun to inspect their supply chains to comply with the new law before it takes effect at the end of 2024. Tony’s Chocolonely, a Dutch chocolate company founded by a journalist covering slave labor in the cocoa industry, told New York Focus it has paid farmers to map their land and verify the locations against protected forest data.

In October, with two and a half months left before Hochul’s deadline to sign or veto the bill, Sysco stepped in to lobby on it.

Sysco retained Bolton-St. Johns to lobby on the bill — the same influential firm that Friends of the Earth had been using to lobby for the bill. Neither Sysco nor Bolton-St. Johns commented on the company’s stance on the legislation. A spokesperson for the firm said it ensures that “there are no conflicts of interest between any of our clients.”

Krueger reached out to discuss the company’s concerns but didn’t get a response, Flagg said.

Sysco did not answer questions about the New York legislation for this article, instead pointing to its broader sustainability commitments. Publicly, the company has sought to promote itself as environmentally responsible.

Like many major food suppliers, Sysco is a member of voluntary business organizations that certify its products as sustainable, like the Roundtable on Sustainable Palm Oil and the US and Canadian Roundtables for Sustainable Beef.

“We recognize the growing impacts of deforestation, including our role, and are committed to responsibly managing the related social and environmental footprint,” Sysco wrote in a 2021 report on forests for investors.

“All of these companies have paper policies saying they have committed to no deforestation, but nobody is holding them accountable to that, because there are no mandatory government regulations,” said Conant of Friends of the Earth. “This holds their feet to the fire.”

Julia Rock is a reporter for New York Focus. She was previously an investigative reporter at The Lever.
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