New York State Comptroller Thomas P. DiNapoli today announced that Archer Daniels Midland Co. (ADM), one of the world’s leading suppliers of agricultural products to food companies, has agreed to use only sustainably-sourced palm and soy products that are certified free of any link to deforestation, a leading cause of climate change. As a result of the company’s commitments, the New York State Common Retirement Fund (Fund) has withdrawn its anti-deforestation shareholder proposal, which it co-filed with Green Century Capital Management.
“ADM’s commitment to using only sustainably-sourced palm and soy products validates our message that strong environmental policies make economic sense,” said 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.”
“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,” said Lucia von Reusner of Green Century Capital Management. “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.”
According to the World Wildlife Fund (WWF), palm oil is the most widely consumed vegetable oil on the planet and nearly half of all packaged products sold in grocery stores, such as shampoo, ice cream and detergent contain palm oil. Similarly, the WWF says global soy production has increased tenfold over the past 50 years, more than any other crop. Increasing meat consumption is the main driver behind soy’s rapid expansion. Around 75 percent of soy worldwide is used for animal feed.
However, soy and palm oil production are leading drivers of rainforest destruction in South America and Southeast Asia. These forests are vital to the reduction of greenhouse gases by converting carbon dioxide into oxygen. In addition, deforestation that burns trees or leaves them to decompose releases large amounts of carbon dioxide into the atmosphere. It has been estimated that deforestation and forest degradation account for nearly 20 percent of global greenhouse gas emissions. Any corporation linked to deforestation and the promotion of climate change risks damage to its operations and reputation.
ADM is the first company to adopt a no-deforestation policy for soy, which is scheduled to be officially announced at the company’s annual meeting in May. ADM officials stated they were excited to position their company as an advocate for sustainable agriculture.
Under its new policy, ADM will commit to a series of standards in their supply chain for palm and soy products, including no development in high carbon stock forests or high conservation value areas.
For a copy of ADM’s agreement letter and draft policies, visit:
The Fund holds approximately 1,795,201 shares of ADM with a market value of $83.1 million.
DiNapoli today also announced that several portfolio companies have agreed to publicly report their plans to reduce greenhouse gas emissions in order to meet federal and international standards. The companies are expected to explain what steps they are taking above and beyond the benchmarks for emissions reductions to reduce emissions 40 percent below their 2005 levels by 2030 and 80 percent below their 2005 levels by 2050.
The Fund has withdrawn its proposal requesting the companies report on steps they've taken to reduce emissions as a result of the agreements.
These companies include:
- Alliant Energy Corp. – Based in Madison, Wis., Alliant Energy is an energy-services provider with subsidiaries serving approximately 1 million electric and over 418,000 natural gas customers throughout the Midwest.
- Denbury Resources Inc. – Based in Plano, Texas, Denbury is a domestic oil and gas company focused on enhanced recovery of significant stranded reserves of American oil from depleted reservoirs through the Gulf Coast and Rocky Mountain regions.
- Vulcan Materials Co. – Based in Birmingham, Ala., Vulcan Materials is the nation’s largest producer of construction aggregates – primarily crushed stone, sand and gravel.
- Wisconsin Energy Co. – Based in Milwaukee, Wis., the company provides electric and natural gas service to customers in areas of Wisconsin and the Upper Peninsula of Michigan.
- Martin Marietta – Based in Raleigh, N.C., Martin Marietta is a leading supplier of aggregates and heavy building materials, with operations spanning 32 states, Canada and the Caribbean.