Climate

Agribusiness Giant Adopts Historic No-Deforestation Policy

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A soy field cuts into a forest in Brazil.

On Tuesday, one of the world’s largest traders of agricultural commodities vowed to help curb forest loss by instating a “No-Deforestation” policy for soy and palm oil in its supply chain.

Archer Daniels Midland’s no-deforestation policy will be the first of its kind to cover soy production outside of the Brazilian Amazon. It also comes at a crucial time for the Amazon rainforest, which is especially affected by soy production and has seen a recent uptick agriculturally-driven deforestation. As of 2012, soybean production had caused the loss of 80 million hectares of forests in the Amazon basin.

Under the new policy, Archer Daniels Midland — known as ADM — will work with the Forest Trust, a non-profit group dedicated to improving the sustainability of company supply chains. The groups will work to map ADM’s supply chain, making sure that none of its soy or palm oil products come from areas where ecosystems are threatened. The company will formally announce the plan, along with more details, on May 7.

Deforestation is a leading driver of climate change. According to Scientific American, loss of tropical rainforests releases more carbon dioxide into the atmosphere than the sum total of all cars. Though tropical deforestation is primarily caused by expanding agriculture, ADM’s announcement is just the most recent in a string of commitments by food and agriculture companies to begin ending tropical deforestation.

“ADM has a steadfast commitment to the development of traceable and transparent agricultural supply chains that protect forests worldwide,” the company’s chief communications officer Victoria Podesta said in an emailed statement. “We are confident that our No Deforestation policy is both strong and appropriate for our company. It combines a clear commitment to no deforestation with progressive action focused on our most critical supply chains.”

ADM, based in Chicago but with a market reach that spans six continents, buys all of its soy and palm oil from third parties. And while the palm oil industry has seen remarkable improvement in its deforestation policies — with nearly 96 percent of the market controlled by no-deforestation commitments — the soy industry has lagged behind in adopting similar policies, making ADM’s commitment to ending deforestation in the soy supply chain the first of its kind.

“While there’s still a lot of work to be done to implement these palm oil policies on the ground and to reign in rogue actors, we’re really looking to now spread this transformation to other commodities that drive deforestation in other parts of the world — soy in Latin America being top among them,” Ben Cushing, a spokesman for the advocacy group Forest Heroes, told ThinkProgress.

Over the last decade, Brazil appeared to be making huge strides in curbing deforestation in the Amazon, thanks in large part to pressure exerted by activists on soy and cattle farmers. Instead of cutting down forests to make way for farmland and grazing areas, farmers started to think of ways to make existing farmland more productive. It seemed to be working, with deforestation in Brazil dropping 70 percent between 2005 and 2014.

Part of the slow in deforestation also came in 2006 when major soybean traders — ADM among them — agreed to not buy soy grown on deforested Amazon land in Brazil. Known as the Soy Moratorium, the agreement really did help slow the pace of deforestation in Brazil’s Amazon.

But signs suggest that the pause in deforestation is over — and that loss of the Amazon rainforest is spreading beyond Brazil to peripheral countries like Peru and Bolivia, where the Soy Moratorium doesn’t exist. The moratorium also fails to protect other areas of Brazil, like the Cerrado, a vast tropical savanna whose waters feed crucial river basins like the Amazon. And as the world’s growing economy increases the demand for meat, the demand for soy will also increase, because 75 percent of the world’s soy is used as animal feed.

“We’re at a critical juncture now to break the link between agriculture, especially for soy production and deforestation in Latin America,” Cushing said. “The recent progress on palm oil shows that this is possible, and now ADM’s announcement is a major step forward for the soy industry.”

Investor advocacy played a crucial role in encouraging ADM to commit to the policy, with Green Century Capital Management, an environmentally responsible investment company, teaming up with the New York State Pension Fund file a shareholder proposal that raised concerns about deforestation in the company’s supply chain. The New York State Pension Fund, which is the third largest pension fund in the nation, currently holds around 1,795,201 shares of ADM worth around $83.1 million.

“Shareholders are essentially the only stakeholder that corporations are required to respond to,” Lucia von Reusner, Green Century’s shareholder advocate, told ThinkProgress. “As a shareholder we have a unique voice at the board level that other stakeholders don’t have.”

In the past year, Green Century also encouraged Kellogg’s, Smuckers, and ConAgra to commit to purchasing palm oil from sources that don’t contribute to deforestation.

Now, they’ve set their sights on influencing the world’s largest distributors. At the same time that Green Century filed a shareholder proposal with ADM, they filed a similar proposal with Bunge, a direct competitor. So far, von Reusner said Bunge has not responded to the proposal, but she expects that it will head to a board vote near the end of May.

“The fact that ADM has made this commitment has such huge influence over the global agriculture supply chain and global food production,” von Reusner said, noting that it’s difficult for farmers to prioritize long-term sustainability over short-term cost cutting unless large companies use their influence to demand it. “It’s important that these companies that are setting the market are saying that, in addition to a low price, it’s important that our suppliers adhere to sustainable practices.”