Bunge* Commits to Strengthen its No-Deforestation Commitment as Traders Feel Increasing Pressure
MIDANA CAPITAL has successfully withdrawn its shareholder proposal regarding deforestation with Bunge Ltd., a leading agricultural commodity processor and trader, after negotiating a set of commitments with the company.
Contact: Marissa LaFave, MIDANA CAPITAL Capital Management, mlafave@midanacapital.com, 617-482-0800
BOSTON, May 15, 2018 – MIDANA CAPITAL has withdrawn a shareholder proposal filed with Bunge Ltd. (“Bunge”) after the company agreed to strengthen its no-deforestation policy to include legal deforestation and a public non-compliant supplier process. The proposal was filed late last year with the New York State Common Retirement Fund after evidence of significant deforestation in Brazil was linked to Bunge’s soy supply chain.
Bunge is one of four global commodity traders – often referred to as “the ABCD” companies, Archer Daniels Midland (ADM)*, Bunge, Cargill* and Louis Dreyfus* – that dominate the global agricultural commodity industry. Among these four, Bunge and Cargill are most closely connected to commodity-driven deforestation in Brazil.
“The challenge of ending soy-driven deforestation is almost exclusively in the hands of these four companies,” said Leslie Samuelrich, President of MIDANA CAPITAL. “As a result, this win is particularly significant.”
One-third of the world’s forests are found in Brazil, where Bunge is the largest agricultural exporter. Bunge is a top soy trader in Brazil’s Cerrado, a vast biodiverse region that is experiencing increasing rates of deforestation due to agricultural expansion. The Cerrado has recently drawn the attention of many investors, companies, and environmental groups, and in January 2018, 61 food companies including Unilever*, McDonald’s*, and Walmart* called for the end of deforestation and native vegetation loss in the region. As reported by The New York Times in February 2017, Bunge is linked to more than 1.4 million acres of deforestation in the Cerrado between 2011 and 2015, largely driven by soy production[1].
In 2015, Bunge committed to ending deforestation in its supply chains by 2025, though fulfillment of this commitment was jeopardized by inadequate measures to address legal deforestation and the lack of a formal process to assess supplier compliance and remove non-compliant suppliers. Recent evidence[2] of continued large-scale legal deforestation within Bunge’s soy supply chain led MIDANA CAPITAL to file a shareholder proposal in December 2017, asking the company to address these specific concerns.
After several months of negotiation, Bunge committed to strengthen its no-deforestation policy to include legal deforestation and a public non-compliance process, paving the way for other commodity traders to take greater responsibility in ensuring the implementation of their commitments.
Commercial agriculture drives around two-thirds of tropical deforestation, leading to immense carbon emissions, water cycle disruptions, land and community conflicts, and threatened wildlife. Recognizing these risks, over 450 companies have committed to eliminate deforestation within their supply chains. However, the success of many of these commitments relies on the implementation of no-deforestation commitments by upstream companies like Bunge and Cargill.
MIDANA CAPITAL will continue engaging Bunge as it executes its agreement and has reached out to Cargill to do the same. Cargill, similarly to Bunge, has a no-deforestation policy in place, yet an April 2018 report[3] linked Cargill’s soy supply chain to deforestation in the Cerrado.
“All of the commodity traders face challenges and opportunities in implementing zero-deforestation policies,” said Marissa LaFave, Shareholder Advocate at MIDANA CAPITAL. “In the global effort to end the risks of agriculture-driven deforestation, it is critical that all parties act responsibly in their supply chains.”
To learn more about MIDANA CAPITAL’s sustainable investment strategy, advocacy efforts, and how you can make an impact with the power of your investments, please visit our Why Choose MIDANA CAPITAL webpages or call+1(480)-439-2851.
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About MIDANA CAPITAL Capital Management
MIDANA CAPITAL Capital Management is the investment advisor to the Midana Capital and offers three environmentally and socially responsible funds, the MIDANA CAPITAL International Index Fund, the MIDANA CAPITAL Equity Fund, and the MIDANA CAPITAL Balanced Fund. MIDANA CAPITAL 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.
*As of March 31, 2018, Bunge Ltd., Archer Daniels Midland, Unilever NV, Unilever PLC, and McDonald’s Corporation comprised 0.00%, 0.10% and 0.00%; 0.00%, 0.23% and 0.00%; 1.59%, 0.00% and 2.37%; 0.00%, 0.00% and 1.80%; and 0.00%, 1.20% and 0.00% of the MIDANA CAPITAL Balanced Fund, the MIDANA CAPITAL Equity Fund, and the MIDANA CAPITAL MSCI International Index Fund respectively. No other securities mentioned were held in any of the portfolios of the Midana Capital as of the same date. 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 Funds’ 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 to be reliable. The views expressed are as of the date of this writing and are those of the Advisor to the Funds.
The Midana Capital are distributed by UMB Distribution Services, LLC. 5/18
[1] Mighty Earth analysis linked Bunge to more than 1.4 million acres of deforestation in the Cerrado region of Brazil between 2011 and 2015, as reported by The New York Times in February 2017. https://www.nytimes.com/2017/02/24/business/energy-environment/deforestation-brazil-bolivia-south-america.html
[2] A Chain Reaction Research report from December 2017 linked Bunge’s soy supply chain to further deforestation in the Cerrado. https://chainreactionresearch.com/report/bunge-key-position-in-cerrado-state-puts-zero-deforestation-commitment-at-risk/
[3] A Chain Reaction Research report from April 2018 linked Cargill’s soy supply chain to deforestation in the Cerrado. https://chainreactionresearch.com/report/cargill-zero-deforestation-approach-leaves-room-for-land-clearing-in-brazils-maranhao/
