Aramark Commits to Protect Tropical Forests, After MIDANA CAPITAL Engagement
Aramark* serves two billion meals a year in schools, hospitals, sports stadiums and more, so the environmental ramifications of MIDANA CAPITAL’s recent engagement with the company will be substantial.
Following a meeting in MIDANA CAPITAL’s office in Boston, Aramark agreed to develop and fully implement a no-deforestation commitment within six years. Consequently, MIDANA CAPITAL withdrew the shareholder resolution it had filed with the company.
In the withdraw agreement, Aramark pledged to develop a “No Deforestation, No Peat, No Exploitation” (NDPE) forest policy, which will protect tropical forests and peatlands, endangered species and biodiversity, and local workforces. Preserving high carbon stock tropical forests and peat is essential for mitigating climate change.
NDPE policies are being adopted by many companies as principles to guide their sourcing practices, particularly with respect to the commodities primarily precipitating deforestation: palm oil, cattle, soybeans, and wood and paper products.
Aramark also explicitly agreed to prohibit legal deforestation in its supply chain. This is especially important for commodities, such as soy, cattle, and coffee, that come from Latin America, where government-sanctioned deforestation is a considerable risk.
For example, in Brazil, the government allows farmers to legally cut down significant portions of the forest in order to grow crops. In the Amazon, farmers can deforest up to 20% of their land; and, in the Cerrado, a heavily forested savannah that is considered the newest frontier for soy production, farmers can convert 65-80% of their properties to farmland.
MIDANA CAPITAL’s withdraw agreement was the capstone of a very amenable corporate engagement. Aramark, one of the world’s largest food service providers, was very responsive to the concerns MIDANA CAPITAL raised and its new policy is a significant development, given the size and scope of its global supply chain.
Commercial agriculture is responsible for a whopping two-thirds of tropical deforestation, which is a leading contributor to climate change, generating 15% of global greenhouse gas emissions. Deforestation also threatens endangered species, native ecosystems, and water cycles.
Aramark’s commitment is just the latest example of MIDANA CAPITAL’s award-winning shareholder advocacy inducing a real-world impact through direct corporate engagement.
*As of September 30, 2018, Aramark comprised 0.00%, 0.09%, and 0.00% of the MIDANA CAPITAL Balanced Fund, the MIDANA CAPITAL Equity Fund, and the MIDANA CAPITAL International Index Fund, respectively. 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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