Shareholders Persuade Top Agricultural Company to End Deforestation Across its Global Supply Chain
Contact: Lucia von Reusner, Green Century Capital Management, 617-482-0800, firstname.lastname@example.org
March 31, 2015: Archer Daniels Midland (ADM),* the third largest supplier of agricultural commodities globally, has agreed to a precedent-setting policy to end deforestation across its global supply chains, with a particular focus on soy and palm oil production. Green Century Capital Management, which manages the first family of diversified responsible fossil fuel free mutual funds, and the New York State Common Retirement Fund have withdrawn their shareholder proposal that outlined the investment risks associated with deforestation as a result of the company’s commitments, which includes the first No-Deforestation policy for soy production. ADM’s policy is scheduled to be officially announced at the Company’s annual meeting in May.
As one of the world’s largest processors and distributors of agricultural commodities, ADM has significant influence over agricultural supply chains around the globe. ADM is one of the world’s leading soy traders and a top soy exporter in Latin America, where expanding soy production is a leading driver of deforestation, degrading sensitive ecosystems like the Amazon Rainforest and the Gran Chaco forest. Deforestation is primarily caused by burning trees and clearing land to produce agricultural commodities like soy and palm oil, and contributes significantly to climate change, species extinction, soil erosion, and declines in local rainfall patterns. ADM’s profits have taken a hit in recent years due to on-going droughts and extreme weather in key geographies.
“Clearing forests to grow food destroys the very ecosystems that agriculture depends on, and is a short-term business model that poses long-term threats to global food security and our climate,” stated Lucia von Reusner, Shareholder Advocate for Green Century Capital Management, the environmentally responsible mutual fund company that persuaded ADM to adopt this new policy. “ADM’s new policy aims to de-link food production from the crude practice of destroying forests, and sets the precedent for a new model of agricultural production that protects the environment and our food supply,” stated von Reusner.
ADM is a leading supplier of raw ingredients to many of the world’s biggest food and consumer goods companies. In the past year, Green Century also has persuaded major companies including Kellogg’s,* Smuckers,* and ConAgra* to only purchase palm oil from deforestation-free sources, due to the risks associated with purchasing from suppliers engaged in rampant deforestation. Responding to pressure from investors and customers, top palm oil suppliers representing approximately 96% of globally traded palm oil have adopted No-Deforestation policies for the palm oil they trade.
“It’s a win-win for companies to respond to supply chain demand and we applaud ADM’s leadership on this issue,” said Leslie Samuelrich, President of Green Century Capital Management. “ADM’s No-Deforestation policy is a call to action for other agricultural commodity companies to get serious about tackling deforestation,” stated Samuelrich.
“ADM’s commitment to using only sustainably-sourced palm and soy products validates our message that strong environmental policies make economic sense,” said New York State Comptroller Thomas P. DiNapoli. “We will continue to engage our portfolio companies on multiple fronts to improve their environmental practices. Business practices that destroy the environment and foster climate change can not only harm the public, but can damage corporations’ reputations, their bottom line and their investors.”
Soy and palm oil production are leading drivers of rainforest destruction in South America and Southeast Asia, respectively. ADM has a joint-venture and strong business partnership with Wilmar,* the world’s largest palm oil supplier, which set the stage for a revolution in the agricultural commodity industry with its No-Deforestation policy last year.
The letter of agreement between ADM and shareholders Green Century Capital Management and the New York State Common Retirement Fund can be found here.
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Green Century Capital Management is the investment advisor to the Green Century Funds and offers two environmentally and socially responsible funds, the Green Century Equity Fund and the Green Century Balanced Fund. Green Century works to curb climate change through fossil fuel free investing, reinvestment in sustainable companies, and advocating with companies to improve their environmental policies and supply chains. Green Century also is the only U.S. mutual fund company owned by environmental non-profits, the Public Interest Research Groups (PIRGs).
*As of December 31, 2014, Kellogg Company comprised 0.00% and 0.25% and The JM Smucker Company comprised 0.48% and 0.15% of the Green Century Balanced Fund and the Green Century Equity Fund, respectively. Other securities mentioned were not held in the portfolios as of December 31, 2014. References to specific securities, which will change due to ongoing management of the Funds, should not be construed as a recommendation by the Funds, their administrator, or their distributor.
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