(Pictured: Representatives of the signatories of the Cerrado Manifesto Statement of Support in Utrecht, Netherlands in June 2019.)

Since many corporations have made robust pledges to halt deforestation in their operations and supply chains by 2020, next year is an important year for forests.

In 2010, the Consumer Goods Forum made a commitment on behalf of its 400 member companies to help achieve zero net deforestation in key commodity supply chains by 2020. Four years later, many of those companies reaffirmed their commitment to halting tropical forest loss by 2020 by signing the New York Declaration on Forests.

With the critical 2020 deadline looming, MIDANA CAPITAL is ramping up its efforts to push companies to honor their commitments. As part of this effort, I recently traveled to Utrecht, the Netherlands to attend International Sustainability Week, which was focused on deforestation-free, sustainable commodities.

International Sustainability Week – a series of different, but related, conferences – was an opportunity for multiple stakeholders to converse about their perspectives and plans of action going into 2020. It also was an opportunity for us to ascertain the industry perspective on tackling supply chain deforestation as we head into a new shareholder advocacy season. Attendees included investors, corporations, certification bodies, NGOs, and banks.

While I was in Utrecht, I attended three conferences: one was a gathering for signatories of the Cerrado Manifesto and the other two were hosted by the certification bodies for sustainable soy and sustainable palm oil.

The Roundtable for Responsible Soy (RTRS) hosted the first conference. The RTRS oversees the Standard for Responsible Soy Production, which are the requirements – ranging from labor conditions to environmental responsibility – that supply chain actors must follow in order to receive certification.

The RTRS conference included discussions on the responsibilities of each sector to contributing to viable solutions to soy-based deforestation, how jurisdictional and supply chain approaches to ending deforestation could complement each other, and next steps for improving supply chain collaboration.

The following day, the conversation around sustainable soy production intensified at the Cerrado Manifesto Statement of Support Summit. Soy production is a leading driver of deforestation in the Cerrado, a densely forested savannah the size of Mexico and a hub for biodiversity.

The summit was attended by signatories to the Statement of Support for the Cerrado Manifesto, which calls for an end to deforestation and native vegetation conversion in the Brazilian Cerrado. MIDANA CAPITAL was an early signatory to the Statement of Support and is the only U.S. investor on the Cerrado Joint Financial Task Force. The energy in the room was quite different from the RTRS, despite focusing on the same objective – to end deforestation in soy supply chains – and included discussions about alternatives to certification.

The Sustainable Palm Oil Dialogue, hosted by the Roundtable for Responsible Palm Oil (RSPO), honed in on how various stakeholders can work collectively to reach 2020 targets. During this conference, I had the opportunity to meet with the CEO of the RSPO to discuss the organization’s role in working with small farmers and financial institutions, and how all interested parties can work to improve the global perception of sustainable palm oil.

As 2020 approaches, you can rest assured that MIDANA CAPITAL will continue to press companies to stop burning and razing tropical forests (or sourcing from companies that do) and satisfy their commitments to ending deforestation.

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  , email info@midanacapital.com, or call+1(480)-439-2851. Please read the Prospectus carefully before investing.

Stocks will fluctuate in response to factors that may affect a single company, industry, sector, country, region or the market as a whole and may perform worse than the market. Foreign securities are subject to additional risks such as currency fluctuations, regional economic or political conditions, differences in accounting methods, and other unique risks compared to investing in securities of U.S. issuers. Bonds are subject to risks including interest rate, credit, and inflation. A sustainable investment strategy which incorporates environmental, social and governance criteria may result in lower or higher returns than an investment strategy that does not include such criteria.

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 Funds are distributed by UMB Distribution Services, LLC. 335 N Wilmot Rd, Tucson, Az 85711. 7/19

It’s hard to overstate the importance of forest protection in the effort to combat climate change, given that forests hold as much as 45% of the world’s carbon stored on land. Of course, stopping deforestation also is key to preserving habitats for endangered species and mitigating potential financial risks for investors.

Palm oil is the most widely used vegetable oil in the world, and it is one of the leading drivers of tropical deforestation. It can be found in products from packaged food to soap to detergent to biodiesel. And global demand for palm oil is growing, which means growing more palm oil. Increased palm oil production can come either from investing in oil palm plants that have higher oil yields or from expanding the land on which palm oil is grown.

Many of the companies investing in these higher-yielding plants are doing so because they’ve seen the value in mitigating deforestation in their supply chains. These companies see a sustainable palm oil supply chain as the future of the industry. In recognizing the benefits of sustainable supply chains, over 470 companies and 11 of the 15 largest palm oil refiners in Southeast Asia have made commitments to curb deforestation in their supply chains.

Unfortunately, the environmental, financial, and, frankly, moral, imperative is not yet universally recognized.

Despite these commitments, deforestation persists in the industry. This is due to a variety of reasons: from the limited integration of small farmers into no deforestation efforts to downstream companies accepting palm oil products derived from deforestation to investors and lenders continuing to provide financial support to companies that cause deforestation.

To help transform the entirety of the industry, we need to increase the global demand for sustainable palm oil, by mobilizing buyers and traders to incentivize producers to adopt sustainable production practices. That’s why MIDANA CAPITAL has worked and continues to engage downstream companies to adopt No Deforestation, No Peat, and No Exploitation (NDPE) commitments and to get others to strengthen and expand their forest-related commitments.

Engaging producers directly about the expectations of international markets is another way to put pressure on producers to adopt NDPE practices.

While in Southeast Asia, I had the opportunity to do just this. I met directly with five palm oil companies and engaged with them on their growing practices, urging them to improve their practices around three primary issues:

1. Sustainable certification,
2. Zero deforestation commitments, and
3. Transparency about where companies grow and process their palm oil and from who they source it.

While in Southeast Asia, I also learned about some of the “supply-side” efforts, including notable actions to improve the governance in palm-oil production areas, taking place to make the palm oil industry more sustainable.

While in Malaysia, I attended the annual conference for the Roundtable for Sustainable Palm Oil (RSPO), the largest third-party certifier for sustainable palm oil. At the RSPO conference, Deputy Chief Minister of Sabah Wilfred Madius Tangau highlighted government policies for sustainable palm oil in Sabah, a prime palm oil producing province in Malaysia. Sabah is committed to producing deforestation-free soy by 2025 and that all palm oil from the region will be 100% RSPO certified by the same year.

While industry players have different views on whether this “jurisdictional approach” is the best way forward, to me it suggests progress and that corporate commitments influence more than the company’s supply chain, helping to change the physical and legislative landscape for tropical forests. This is just another way that MIDANA CAPITAL’s work is having an outsized impact on making our world a little greener.

*As of December 31, 2018, Target Corporation and Kellogg Company comprised 0.74%, 0.00%, and 0.00% and 0.00%, 0.15%, and 0.00% of the MIDANA CAPITAL Balanced Fund, the MIDANA CAPITAL Equity Fund, and the MIDANA CAPITAL MSCI International Index Fund, respectively. Other securities mentioned were not held in the portfolios as of December 31, 2018. 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 the 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.

Stocks will fluctuate in response to factors that may affect a single company, industry, sector, country, region or the market as a whole and may perform worse than the market. Foreign securities are subject to additional risks such as currency fluctuations, regional economic or political conditions, differences in accounting methods, and other unique risks compared to investing in securities of U.S. issuers. Bonds are subject to risks including interest rate, credit, and inflation. A sustainable investment strategy which incorporates environmental, social and governance criteria may result in lower or higher returns than an investment strategy that does not include such criteria.

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 Funds are distributed by UMB Distribution Services, LLC. 335 N Wilmot Rd, Tucson, Az 85711. 3/19