February 19, 2019
ADM, Cargill commit to framework for traceable soy supply in Brazil
Members of the Soft Commodities Forum (SCF), a global platform for leading soft commodities companies convened by the World Business Council for Sustainable Development (WBCSD), have committed to a common framework for reporting and monitoring progress on transparent and traceable supply chains for soy in Brazil's Cerrado region.
SCF members consist of the founding members Archer Daniels Midland (ADM), Bunge, Cargill and Louis Dreyfus Company (LDC). The SFC membership has also expanded to include COFCO International and Glencore Agriculture.
According to SCF, the Cerrado region of Brazil plays a significant global role for both people and nature, including climate change mitigation, biodiversity and fresh water systems, as well as functioning as an economic engine for local communities and a production region for exported agricultural commodities.
However, the extent and pace of native vegetation loss resulting from cattle and soy expansion in the Cerrado poses a significant threat to these social, environmental and economic values.
Ian McIntosh, CEO of Louis Dreyfus Company, said: "We are continuously seeking to rise to the challenge of feeding the world's growing population in a sustainable manner. This means being mindful to preserve the environment, including areas of importance for their biodiversity. Brazil's Cerrado Biome is one such area, where every effort must be made to ensure that any agricultural expansion occurs hand-in-hand with the preservation of native vegetation. The Soft Commodities Forum allows us to set common sustainability goals with our peers, and mutual reports on our progress, as one of the means we have to ensure fair and sustainable value creation."
SCF member companies recognise the existing risks and commit to act on supporting transparent and traceable soy supply chains in Brazil.
Each member company will report updates on progress every six months. In addition, the SCF member companies participate in the processes of the Cerrado Working Group - also known as GTC - to develop agreed common definitions, to design appropriate financial incentives and to outline actions which should be taken.
The GTC was established by a multi-stakeholder coalition to develop terms of agreement between producers, industry, consumer organisations and civil society, as well as an action plan for eradicating deforestation and conversion of native vegetation in Brazil's Cerrado biome.
Starting with 2018 harvest data, SCF member companies will report individually the percentage of soy they each source in the Cerrado from the total Brazilian volume.
Together, SCF members will closely monitor municipalities with the highest risk of conversion of native vegetation to soy, based on GTC information. Sourcing in these municipalities will be reported in percentages of direct purchase from farmers, and indirect purchase, from parties like aggregators, cooperatives and third parties.
The first report will be issued in June 2019. The process will be supported by Proforest, a leading non-profit group that supports companies, governments and other organisations to implement their commitments to the responsible production and sourcing of agricultural commodities and forest products.
Subsequent reporting will provide information on specific actions being taken to improve direct engagement with farmers to address risks in the municipalities.
"Cargill is proud to join other leaders in the industry to support actions that help Brazilian farmers protect forests, preserve natural resources and maintain their livelihoods," said David MacLennan, Cargill chairman and CEO. "Today's announcement brings the industry together around shared goals and accountability to ensure continued progress against our sustainability commitments."
"For ADM, sustainable practices and a focus on environmental responsibility are integral to the work we do every day", said ADM chairman and CEO Juan Luciano.
"Since we first made our commitment to no deforestation in 2015, we've made significant progress in achieving transparency in our own supply chains, and in working with our industry counterparts so that we are all advancing these important goals. The framework and standards we've agreed upon as part of the Soft Commodities Forum is a critical step forward in our collective efforts to preserve and protect the environment and the people of the Brazilian Cerrado biome."
"Transparency and data improve trust and facilitate problem solving. Today's commitment will generate more of both", said Greg Heckman, acting CEO of Bunge Limited. "It is an important step by industry leaders that will help optimise agricultural sustainability in a vital region."
Johnny Chi, chairman of COFCO International, said: "This initiative is a great example of collaborative action urgently needed to safeguard future food and agricultural production while ensuring environmental conservation. COFCO International will continue engaging various stakeholder groups in key forums such as the Soft Commodities Forum and Cerrado Working Group, to achieve this shared objective."
Diane Holdorf, managing director (food and nature) at WBCSD, said: "The Soft Commodities Forum facilitates the first time leading global commodity traders are working together in a pre-competitive project to address sustainability risks they all share, but which no single company can resolve alone. Unprecedented collaboration such as this, together with other stakeholders, is required to address these complex food system challenges."
- ADM / Cargill / Bunge