SUPPLY CHANGE

 

March 23, 2018

Dear Colleagues,

Green Century is delighted to be a guest contributor to this month’s Supply Change newsletter. As an investor that has been leading and developing strategies to press corporations to eliminate deforestation from global supply chains since 2012, we recognize the urgent need for and value of tools like Supply Change, and we are just one of the many organizations that benefit from this Forest Trends initiative.

This was why Green Century was pleased to be a panelist on last month’s launch webinar for Zooming In: Corporations, Commodities, & Traceability Commitments that Count, co-hosted by Forest Trends' Supply Change Initiative and Ceres. We discussed new analysis about how companies that are committed to addressing commodity-driven deforestation are tracing supplies to their origin—be it factory, farm, field, or forest—so they can determine the impact their supply chains have on forests.

Innovation Forum - Agriculture

Listen to the Webinar Recording and Download Zooming In here.

Commercial agriculture drives around two-thirds of tropical deforestation, leading to immense carbon emissions, water cycle disruptions, land and community conflicts, and threatened wildlife. The conversion of land for commodities such as palm oil, cattle, and soy has resulted in the loss of about 129 million hectares of forest since 1990.

Driven by the combined efforts of investors, NGOs, and other key stakeholders, the palm oil industry has seen incredible progress in just a few years. In 2012, when Green Century filed its first shareholder proposal on deforestation, only five percent of palm oil refineries in Southeast Asia were covered by zero deforestation policies. As of 2017, 74 percent were covered. Green Century and many of these groups are now focusing efforts on pressing for similar policies in other key commodity supply chains, including soy, cattle, and timber.

Investors believe that if companies do not properly address and mitigate deforestation risk within their supply chains, they are vulnerable to material financial risks including restricted market access and severe reputational damage. The risks posed to companies are in turn passed on to the investors who invest in them.

These risks are real and have led investors to take action. Institutional investors representing over $12 trillion in assets under management have supported efforts to reverse global deforestation and eliminate related labor and land disputes from corporate supply chains (UN PRI). Just last month, the world’s largest sovereign wealth fund reported that it not only engaged companies on deforestation risk, but divested from palm oil and soy companies because of deforestation risk. Green Century has engaged dozens of companies on deforestation risk, securing zero deforestation commitments from companies including ConAgra Brands, Archer Daniels Midland, and Kellogg.

Commitments are just the first step; ensuring implementation of these commitments is equally important. Without adequate traceability and transparency, we as investors are unable to ensure that companies are on track to achieve their commitments and cannot make sound risk assessments. Transparency, alongside strong zero deforestation and traceability commitments, allows us to understand how companies are addressing deforestation risk within their supply chains, how they compare to their peers, and the real-world impacts their actions are making.

We appreciate the support and partnership of the many individuals and organizations pressing for a more sustainable global food system. With much more progress still ahead, we look forward to continued collaboration in creating more traceable, transparent, well-managed supply chains worldwide.

Marissa LaFave, Shareholder Advocate, Green Century Capital Management

Green Century Capital Management offers three environmentally and socially responsible mutual funds, the Green Century International Index Fund, 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.

 

More stories about changing supply chains are summarized below, so keep reading!

- The Supply Change team

 

--------

Upcoming Events

Innovation Forum: Can innovation and technology make agriculture sustainable?

Arlington, VA, 4th-5th April 2018

This two-day business forum is designed to debate how to leverage technology, climate-smart agriculture, and cross-sector collaborations to improve sustainable farming. It will focus on practical ways to deliver against company objectives and balance positive impact for farmers, businesses and the planet.

Already confirmed to participate are senior professionals from Google, JBS, Bunge, Walmart, Smithfield, WWF, Mars, Cargill, WRI and many more.

As Supply Change is a Supporting Partner, we are able to offer a 15% discount when registering by using the SC15 code. Get in touch with Innovation Forum directly – azadeh.ardakani@innovation-forum.co.uk.

 

Innovation Forum: How business can tackle deforestation
Arlington, VA, 18th-19th April 2018

The two-day conference will deliver focused discussion around the big issues facing US businesses. Already confirmed to participate are professionals from Unilever, General Mills, Mondelēz International, Johnson & Johnson, Sappi North America, 3MTarget, The Nature Conservancy, Greenpeace, Georgia-Pacific, Pirelli, Neste, RAN, Bunge, Office Depot, CDP, Ceres, and many more key stakeholders.  

As Supply Change is a Supporting Partner, we are able to offer a 15% discount when registering by using the SC15 code. Get in touch with Innovation Forum directly – azadeh.ardakani@innovation-forum.co.uk.

 

--------

Recent News

Naming and Changing

Norges Bank Investment Management (NBIM) identified the names of the companies and banks with which Norway’s Government Pension Fund Global (GPFG) is engaging to mitigate commodity-driven deforestation risks for the first time in its latest investment report. The world’s largest sovereign wealth fund’s work in this area is part of its strategy for complying with its own ethical, environmental, and social guidelines. It is very good news that the fund is open about which companies it is working with to improve environmental and social performance, says Vemund Olsen, a senior advisor at the Rainforest Foundation Norway. With over $1 trillion in assets, the GPFG has a lot of influence and is able to apply substantial pressures on the companies and banks in which it has invested.
Read more from the Rainforest Foundation of Norway.

 

Creating an App-titude for sustainability

A new app developed by the environmental non-profit, Global Canopy, helps banks determine how their lending and engagement policies can be improved to manage deforestation risk and compare how those policies measure up against those of their peers. SCRIPT (Soft Commodity Risk Platform), as it is called, has two main features: a tool for benchmarking social and environmental policies with banking industry norms and a tool for screening investment portfolios for companies with high risks of deforestation. Financial institutions can use this tailored information to guide policy reforms and prioritize higher-risk companies for engagement.
Read more from Business Green.

 

Counting down to 2020

Sixteen influential global food companies are failing to achieve their 2020 commitments to eliminate deforestation from their palm oil supply chains, according to a new report by Greenpeace. Even though the majority of companies had relevant commitments, the authors found that they often failed to implement and report on key strategies needed to confirm compliance with their commitments. Colgate-Palmolive, General Mills, Mars, Mondelēz, Nestlé, Procter & Gamble, Reckitt Benckiser, and Unilever all revealed who produced their palm oil, while the other eight companies did not. The authors point out that disclosing where commodity supplies come from is the first step among many others, such as using geospatial monitoring and engaging non-compliant suppliers.
Read the Moment of Truth Report.

 

Supply-Change.org
 

Forest TrendsCDPWWFGEFUNEP