Mondelez Sustainable Forestry 2013
|Company||Mondelez International, Inc.|
|Filer||Domini Impact Investments LLC|
|Sector||Food and Beverage|
|Subject(s)||Climate Change; Forests; Supply Chain; Biodiversity; Palm Oil|
|Resolved Clause Summary||Deforestation impact and risk mitigation report|
Mondelez is one of the world’s largest consumer products companies, with a diversified line of brands including Oreo, Nabisco and Halls. Palm oil, soya, sugar and paper are used in a variety of Mondelez products. Globally, demand for these commodities is fueling deforestation. Several of these commodities have been linked to human rights violations, including child and forced labor.
Forests are rapidly declining at a rate of 55 football fields per minute according to the United Nations. Only about 20% of the world’s original forests remain undisturbed.
As a member of the Consumer Goods Forum, Mondelez recognizes that “Deforestation is one of the principal drivers of climate change, accounting for 17% of greenhouse gases today. The consumer goods industry, through its growing use of soya, palm oil, beef, paper and board, creates many of the economic incentives which drive deforestation.” (Consumer Goods Forum press release, 11/29/10)
The Intergovernmental Panel on Climate Change, the leading international network of climate scientists, has concluded that global warming is “unequivocal.” The U.S. Environmental Protection Agency has determined that greenhouse gases threaten Americans’ health and welfare.
Climate change impacts from deforestation and poor forest management can be reduced through increased use of recycled materials, independent third party certification schemes, and monitoring of supply chains.
Forest Footprint Disclosure (FFD), an initiative backed by 77 financial institutions managing more than $7 trillion, calls on global corporations to report on how their activities and supply chains contribute to deforestation and how those impacts are being managed. Although Mondelez has received several annual requests from FFD seeking disclosure of the company’s management of deforestation risks in its supply chain, to date it has declined to respond.
Mondelez discloses some information on its purchases of certified Palm Oil, but provides no information on the impact on forests of its soya, paper and sugar purchases. Meaningful indicators of how Mondelez is managing deforestation risks would include:
• A company-wide policy on deforestation
• The percentage of purchases of Palm Oil, soya, sugar and paper that are sustainably sourced, with clear goals for each commodity
• Results of audits to ensure that suppliers are in compliance with Mondelez’s forestry goals
• Identification of certification systems and programs that the company uses to ensure sustainable sourcing of each of these commodities.
Proponent believes that Mondelez faces potential reputational and operational risks by failing to adequately disclose its approach to managing deforestation risks. For example, Cadbury, now a Mondelez brand, faced public controversy over use of Palm Oil in its Dairy Milk bars in New Zealand.
RESOLVED: Shareholders request the Board to prepare a report, at reasonable cost and omitting proprietary information, by December 1, 2013, describing how Mondelez is assessing the company’s supply chain impact on deforestation and the company’s plans to mitigate these risks.