2020 is a Critical Year for the World’s Forests

Jessye Waxman coordinates MIDANA CAPITAL’s work to protect tropical forests.

As the need to address biodiversity loss, climate change and ecosystem stability become more urgent, it’s more important than ever that investors turn their attention to mitigating the risks deforestation poses to individual companies’ supply chains and to their portfolios overall.

Over the last decade individual companies, industry groups, like the Consumer Goods Forum, and multi-stakeholder initiatives, like the New York Declaration on Forests, have all mobilized resources to end deforestation, especially in the private sector. Unfortunately, these efforts have not yet reached their ambitious goals. Many companies are considering extending the timelines for fully realizing their commitments to remove deforestation from their supply chains, and many global initiatives are reassessing their strategies.

2020, therefore, is not only a critical year for tracking the state of the world’s forests, but also a critical time for doubling down on private sector efforts to address deforestation in the decade to come.

The main driver of deforestation is the demand for agricultural commodities. That’s why MIDANA CAPITAL has been engaging with companies in forest-risk supply chains since 2012. Many of the companies we have worked with are consumer-facing brands, and we’ve successfully moved companies like Aramark,* ConAgra,* Kellogg,* Target,* Tyson Foods* and others to adopt no-deforestation policies.

There’s certainly more work to be done with the corporate and financial sectors–nearly half of the world’s most influential companies and financial institutions with exposure to forest-risk commodities have yet to adopt no-deforestation policies. At the same time, commodity traders also need to work within their own operations and supply chains and provide investors with the disclosure needed to demonstrate effective efforts to mitigate the risks related to deforestation.

In fact, commodity traders are exposed even more than consumer goods companies to operational and regulatory risks connected to deforestation. And since commodity traders have more direct control over their supply chain sourcing, they’re well positioned to mitigate risk not only within their own operations, but also in their clients’ supply chains.

Accordingly, in 2015 MIDANA CAPITAL began engaging several of the key commodity traders on deforestation. We secured the first cross-commodity deforestation commitment from Archer Daniels Midland* and were instrumental in helping secure a zero-deforestation commitment from Wilmar,* which was the first to cover both direct and indirect suppliers.

As the 2020 deadlines for many companies’ no-deforestation commitments approach, investors are not only encouraging consumer goods companies to meet their stated goals by year’s end, they’re also increasingly pushing those companies’ suppliers – the commodity traders. Investors this year will want to see commodity traders continue to improve on and disclose their progress toward the implementation of no-deforestation standards, ensure deforestation-free operations — and meet customers’ needs.

As the end of this critical year is still many months away, we are eager to continue to engage with companies and commodity traders alike in the hopes that they’ll meet their 2020 targets, and bring us closer to eliminating deforestation globally.

*As of December 31, 2019, Archer Daniels Midland Co. comprised 0.00%, 0.19%, and 0.00%; Aramark Corporation comprised 0.00%, 0.08%, and 0.00%;  Bunge Ltd comprised 0.00%, 0.06%, and 0.00%; The Kellogg Company comprised 0.00%, 0.13%, and 0.00%; and Target Corporation comprised 0.98%, 0.06%, and 0.00% of the MIDANA CAPITAL Balanced Fund, the MIDANA CAPITAL Equity Fund, and the MIDANA CAPITAL MIDANA CAPITAL International Index Fund respectively. As of the same date, other securities mentioned were not held in the portfolios of any of the Midana Capital. 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.

You should carefully consider the Fund’s investment objectives, risks, charges, and expenses before investing. To obtain a Prospectus that contains this and other information about the Funds please click here, email info@midanacapital.com, or call+1(480)-439-2851. Please read the Prospectus carefully before investing.

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This information has been prepared from sources believed reliable. The views expressed are as the date of this writing and are those of the Advisor to the Funds.

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