Leading agricultural processor and food-ingredient supplier Archer Daniels Midland Company has agreed to stop deforestation due to soy and palm oil production in its global supply chains, according to investors. Chicago-based ADM, one of the world's biggest soy traders and a top soy exporter in Latin America, joins a growing group of multinational firms that are taking action to ensure their businesses do not destroy forests around the globe.
New commitments from companies related to reducing deforestation jumped 80 percent in 2013-14, meaning more companies are taking the problem seriously, according to a recent report from Forest Trends, a Washington-based NGO.
ADM's move came in response to pressure by shareholders Green Century Capital Management, which manages fossil fuel-free mutual funds, and the New York State Common Retirement Fund. They have now withdrawn a proposal outlining the investment risks associated with deforestation.
"ADM's commitment to using only sustainably sourced palm and soy products validates our message that strong environmental policies make economic sense," said New York State Comptroller Thomas P. DiNapoli.
"Business practices that destroy the environment and foster climate change can not only harm the public, but can damage corporations' reputations, their bottom line and their investors," he added.
Since 2000, more than 60 million hectares of tropical forest have been converted to agriculture, according to Forest Trends.
Agriculture is widely recognised as the largest driver of deforestation globally, and is linked to 80 percent of forest loss around the world, the London-based Overseas Development Institute (ODI) says in a new report.
The report, published on Monday, argues that government subsidies for agricultural commodities are undermining international aid to protect forests, and should be reformed.
"While international forest aid seeks to promote private investment in forest protection, governments around the globe are incentivising commodities that drive deforestation," said Will McFarland, the report's co-author.