The government has set out plans to introduce new legislation, which would make it illegal for larger businesses to use products, unless they comply with local laws to protect natural areas.
These businesses would be required to publish information to show where key commodities, including cocoa, rubber, soy and palm oil came from and that they were produced in line with local laws protecting forests and other natural ecosystems.
The level of fines will be announced at a later date.
According to governmental figures, approximately 80% of deforestation is caused by the production of agricultural commodities.
The destruction and degradation of these vital habitats increase the risk of extreme weather events, drives biodiversity loss and exacerbates the spread of infectious diseases.
International Environment Minister Lord Goldsmith, said: “Ahead of hosting the UN Climate Change Conference next year, the UK has a duty to lead the way in combatting the biodiversity and nature crisis now upon us.
“There has been a lot of progress already to make the UK’s supply chains more sustainable, but more needs to be done. We will continue to work closely with farmers, business and governments around the world to ensure that we can protect our vital forests and support livelihoods as we build back greener from coronavirus.”
Sir Ian Cheshire, Chair of the Global Resource Initiative, said: “Every day, British consumers buy food and other products which are contributing to the loss of the world’s most precious forests.
“We need to find ways of reducing this impact if we are to tackle climate change, reduce the risks of pandemics and protect the livelihoods of some of the poorest people in the world.”