Corporate actions happens for many reasons. Sometimes they are tied to economic shifts, other times ephemeral political winds are a trigger or as we all know technological revolutions like transgenics can cause major upheavals. This week two major agribusinesses have taken actions to correct some serious wrongs. Mind you, they are not admitting anything, they’re just throwing money at two problems that they contributed to originally. Step in the right direction? Yep. Enough to make a major difference? Nope.
Monsanto whose popular weed killer Roundup has been blamed, in part, by critics for knocking out monarch butterflies’ habitat, said it is committing $4 million to efforts to stem the worrisome decline of the black-and-orange insects. They are donating the funds to the National Fish and Wildlife Foundation’s Monarch Butterfly Conservation Fund — one-third of that money matches what the U.S. Fish and Wildlife Service is contributing. The remaining funds will be set aside to mirror what other federal agencies plan to offer over the next three years. But to be clear, this contribution focuses on habitat restoration, not chemical assessment.
Then the state of New York announced that, after negotiations with the global agribusiness conglomerate Archer Daniels Midland, ADM will adopt a no-deforestation policy for soy and palm oil. This comes at a critical time because evidence indicates that after years of progress, deforestation in the Brazilian Amazon is increasing again. Just outside the Brazilian Amazon — in Peru, Bolivia, Columbia, and in Brazil’s Cerrado region people have been cutting down the forests where there has been less pressure to stop. The move from ADM provides a clear warning to farmers who are considering the costs and benefits of clearing more land.
ADM laid out a specific set of commitments and a plan for implementation. This announcement is the latest in a cascade of no-deforestation commitments set off when Wilmar, the largest palm-oil company, pledged to stop buying from suppliers who cut down rainforest. ADM owns 16 percent of Wilmar.
“ADM has a steadfast commitment to the development of traceable and transparent agricultural supply chains that protect forests worldwide,” wrote Victoria Podesta, ADM’s chief communications officer, in an email. “We are confident that our No Deforestation policy is both strong and appropriate for our company.”
Last year, another agribusiness, Cargill, announced a plan to stop buying all commodities that caused deforestation. While this ADM commitment is more narrowly focused on soy and palm oil, it applies more stringent rules than the Cargill pledge, said Ben Cushing, spokesperson for the advocacy group Forest Heroes. “For soy, this puts ADM out front,” he said.
As the awareness of the devastating destruction and health issues that surround palm oil and soy, this move may have as much to do with supply chain management than altruism. A closer look at the ‘why’ reveals that while a group of NGOs — Forest Heroes, Sierra Club, the Union of Concerned Scientists, the National Wildlife Federation, SumOfUs, and NRDC all urged the company to make its business more sustainable, it was the New York State Common Retirement Fund that asked ADM to take this step. The retirement fund holds $83.1 million in ADM stock.