Organization: ConAgra Foods, Inc.

Year: 2014

Description:

Whereas: As one of North America’s largest packaged food companies, ConAgra uses palm oil in a variety of its branded products. An estimated 55% of ConAgra’s sales rely on palm oil. 

 

Approximately 85% of palm oil is grown in Indonesia and Malaysia. Palm oil production is a leading driver of deforestation in those areas. Due to high levels of deforestation and conversion of carbon-rich peatlands, Indonesia was ranked the 3rd largest emitter of greenhouse gases globally. The palm oil industry is also notorious for using child and forced labor, according to the U.S. Department of Labor.

 

Companies that fail to uphold strong environmental and social values throughout their supply chains have faced significant reputational damage and consumer rejection of their products. 

 

ConAgra is currently the public target of a coalition of environmental and consumer groups for sourcing palm oil from suppliers allegedly engaged in illegal deforestation in national parks and human rights violations. Although ConAgra has pledged “to source 100 percent of our palm oil from RSPO [Roundtable on Sustainable Palm Oil] sustainably certified sources by 2015,” it appeared in 2013 that the company’s approach to that goal emphasized purchasing so-called GreenPalm credits from other sources growing palm oil sustainably, rather than preventing physical acts of deforestation in its own supply chain. 

Human rights violations and the clearing of existing peatlands in ConAgra’s supply chain are not eliminated by purchasing offsets attributable to production elsewhere. A recent palm oil policy scorecard from the Union of Concerned Scientists ranked ConAgra as one of the weakest in its sector on deforestation impacts from palm oil production. 

 

Proponents are concerned that ConAgra may be exposed to significant brand and reputational risks from supply chain impacts on deforestation and human rights. Recently, major companies including Kellogg’s and Wilmar have pledged to develop traceable, deforestation free palm oil supply chains. This raises the bar for the entire sector, heightening risks to ConAgra.

 

Therefore, be it resolved that: Shareholders request that the Board prepare an annual public report, initially by March 1, 2015, at reasonable cost and omitting proprietary information, providing metrics and key performance indicators demonstrating the extent to which the company is curtailing the actual impact of its palm oil supply chain on deforestation and human rights. 

 

Supporting Statement: Proponents believe meaningful indicators would include:

• Percentage of palm oil traceable to ConAgra’s suppliers verified by credible third parties as not engaged in (1) physical expansion into peatlands, High Conservation Value or High Carbon Stock forests, or (2) human rights abuses such as child or forced labor; 
• Providing a time-bound plan for 100% sourcing consistent with those criteria;
• Estimates of number of physical acres of existing peatlands or forests eliminated during prior year due to ConAgra’s palm oil supply chain; 
• An explicit commitment to strengthen third-party certification programs to prevent development in its supply chain on high carbon stock forests and peatlands.