Organization: Bunge Limited

Year: 2015

Description: WHEREAS: Conversion of forests to commodity agriculture is the single largest cause of deforestation, which contributes significantly to climate change, disrupted rainfall patterns, soil erosion, species extinction, and community land conflicts.

Adverse weather resulting from climate change, including shifted rainfall patterns, are highlighted as top risk factors in Bunge’s 2014 10-K. As one of the largest suppliers of agricultural commodities globally, Bunge both contributes to and is severely impacted by the adverse impacts of deforestation on agricultural production.

Deforestation and peatland degradation accounts for 10- 15% of global greenhouse gas emissions--- around that of the entire global transportation sector. In addition to driving climate change, deforestation has been shown to severely alter global rainfall patterns, according to 2005 NASA data.
Commercial agriculture is recognized as the leading driver of global deforestation, accounting for over 70% of tropical deforestation between 2000-2012, approximately half of which was illegal. Deforestation globally is increasing.

Concerns about deforestation have prompted leading global consumer and agriculture companies to adopt ‘zero deforestation’ policies for sourcing key agricultural commodities. These time-bound commitments include full supply-chain traceability; protections for high carbon stock (HCS) and high conservation value (HCV) forests; peatlands; community and worker rights; and independent verification.

Demand for sustainably sourced ingredients is growing, and many companies that have made these commitments are likely Bunge customers. Competitors Cargill and Wilmar announced ‘no deforestation, no exploitation’ pledges this year for all commodities they handle.

Investors with $15 trillion in assets have requested increased information through CDP’s forests disclosure program about how companies are managing risks associated with deforestation, an increase of 30% since 2013. Bunge does not disclose its impacts on deforestation.

Failure to keep pace with shifting market expectations for sustainable production may pose significant risks to Bunge including restricted market access, reputational damage, loss of goodwill, and barriers to capital.

Bunge’s stated mission is ‘to ensure food security for a growing population in a sustainable way.’ Proponents believe that the adverse impacts of deforestation—due largely to agriculture— will pose increasing risks to global food production and thus Bunge’s business. While Bunge recently announced a zero- deforestation palm oil sourcing policy, the company does not appear to have a comprehensive strategy for monitoring or reducing deforestation across each of its commodity supply chains, including soy and sugar.

Resolved: Shareholder request that Bunge set quantitative, time-bound goals for reducing its supply chain impacts on deforestation and related human rights, and report annually against key performance indicators and metrics that demonstrate progress against these goals.
Supporting Statement:

Proponents believe meaningful indicators would include:

• An assessment of risks related to the company’s supply chain and operational impacts on deforestation;
• Percentage of each key commodity that Bunge can trace and independently verify, via credible third parties, as not contributing to (1) physical expansion into peatlands, HCV or HCS forests or (2) human rights abuses;
• A time-bound plan for 100% sourcing consistent with those criteria.