Starbucks Palm Oil 2013
|Filer||Green Century Capital Management|
|Sector||Food and Beverage|
|Subject(s)||Climate Change; Forests; Greenhouse Gas Emissions; Biodiversity; Palm Oil|
|Resolved Clause Summary||Palm oil policy|
|Status||Withdrawn; Company will address|
Whereas: The environmental and social impacts of palm oil, an ingredient in the Starbucks Corporation’s supply chain, make it highly controversial. Accordingly, we believe our Company’s failure to procure certified sustainable palm oil for its products is a brand risk to both the Company’s reputation and to the long-term security of palm oil supply.
Approximately 85% of palm oil is grown in Indonesia and Malaysia, much of it on industrial plantations. According to the Union of Concerned Scientists, palm oil plantations are “are a disproportionately large source of global warming emissions because they are often established on land converted from swamp forests. When these wetlands are drained, their carbon-rich peaty soils decay, releasing large amounts of both carbon dioxide and methane. Thus the expansion of plantations onto peat soils is an important source of the emissions that cause global warming.” (“The Root of the Problem: What’s Driving Deforestation Today, Ucsusa.org, June 2011).
Due to high levels of deforestation, Indonesia was, by a World Bank estimate, the 3rd largest emitter of GHGs globally. The conversion of peatlands alone accounts for roughly half of Indonesia’s GHG emissions but only 1% of GDP. (“Indonesian Government Report Recommends Moratorium on Peatlands Conversion,” Mongabay, January 19, 2010) Agricultural expansion, much of it for palm oil production, can be better managed by using other land types than standing forest.
Palm oil plantations that are not sustainably managed have been shown to destroy habitats of endangered species, such as the orangutan. Companies that have failed to source sustainable palm oil have faced reputational damage and consumer rejection of their products. Starbuck’s own consumer feedback web site, mystarbucksidea.com, already contains complaints about the Company’s use of unsustainable palm oil in its products. Failure to manage the reputational risk of deforestation in supply chains has been disruptive for a number of high profile brands including Mattel and Nestle.
The Roundtable for Sustainable Palm Oil was formed in 2004 to address the social and environmental concerns associated with palm oil production and to promote sustainable palm oil products. Leading companies have committed to source only certified sustainable palm oil by 2015 or sooner, including, the J.M. Smucker Company, H.J. Heinz, SC Johnson, Wal-Mart, General Mills, McDonalds, Mars, Nestle and Unilever. Our company has not made such a commitment, and we believe has not addressed the risks described above.
Resolved: Shareholders request that the board of directors adopt and implement a comprehensive sustainable palm oil policy.
Supporting Statement: We believe that in order to effectively address this issue, the Company should adopt a policy that includes:
• a target date for sourcing 100% Certified Sustainable Palm Oil or for purchasing GreenPalm certificates covering 100% of sourced palm oil,
• plans to verify suppliers’ compliance with the policy,
• supporting a moratorium on palm oil expansion in rainforests and peatlands, and
• a commitment to disclose the company’s progress on this issue.