Suppliers of more than 55 percent of the world’s palm oil have committed to produce or trade 100 percent deforestation-free palm oil in response to demands by global brands, who in turn were responding to investor pressure, according to Ceres.
General Mills, Kellogg and Safeway are among the several food and beverage firms, supermarket companies and grocery store chains to commit to responsibly source 100 percent of their palm oil in response to shareholder resolutions.
The commitments result from a record-high number of shareholder resolutions filed in 2014 proxy season to drive more aggressive action by top companies on climate-related issues. Investors also achieved major commitments for responsible palm oil from ConAgra, J.M. Smucker Co., Mondelez and Panera.
The $44 billion palm oil industry has proliferated over the past few decades as palm oil has become the most widely used vegetable oil in the world. But deforestation, a major byproduct of the palm oil industry, causes nearly 20 percent of global greenhouse gas emissions, according to the Environmental Protection Agency.
During the 2014 proxy season, nearly 150 climate-related resolutions were filed by institutional investors, and 20 major international corporations committed to set goals to reduce greenhouse gas (GHG) emissions or sustainably source palm oil. An additional 45 corporate commitments were secured related to sustainability reporting, energy efficiency and carbon asset risk.
Investors that secured the palm oil commitments include: Clean Yield, Domini, Social Investments, Green Century Capital Management, The New York State Comptroller’s Office, Trillium, and members of the Interfaith Center on Corporate Responsibility (ICCR).
This year’s record number of climate-related resolutions demonstrates that investors are boosting their attention to the risks and opportunities that climate change poses to their portfolio companies. Investors – many of whom are members of Ceres’ Investor Network on Climate Risk (INCR) and the Interfaith Center on Corporate Responsibility (ICCR) – secured commitments from 13 companies relating to setting company-wide goals for reducing GHG emissions.
The 2014 proxy season followed up on another successful season the previous year, during which a near-record 110 shareholder resolutions filed with 94 U.S. companies on corporate sustainability challenges. In 2013, shareholders achieved numerous successes within the energy sector. Among resolutions filed with other major U.S. manufacturers, consumer brands and service providers, many investors requested board oversight of corporate sustainability issues and comprehensive disclosure via sustainability reports. Overall, investors withdrew more than 40 of the 110 resolutions after the companies responded affirmatively to their specific requests.
Despite this progress on reducing palm oil impacts, there still is a lot of work to be done. In March, the Union of Concerned Scientists released a scorecard grading the palm oil sourcing commitments of 30 top companies in the packaged food, fast food and personal care sectors, which showed 24 of these brands have inadequate commitments or lack commitments altogether.