Another clear, significant sign of a ¨sea change¨ taking place regarding the strategies, business models, practices and values that underlie, inform and guide the running of the world’s largest, leading multinational business organizations, Bunge Limited on September 21 announced it is instituting a broad, sweeping policy that is to see the giant agricultural commodities concern eliminate the production and purchasing of grains, oilseeds and other agricultural and food products that result from deforestation.

Pressure from shareholders led by Green Century Capital Management was instrumental in bringing about Bunge’s new ¨zero deforestation¨ policy. Last spring Green Century called on Bunge management to adopt a policy of eliminating deforestation throughout its supply chain, which encompasses worldwide production and distribution of staple agricultural commodities such as soy, sugar and corn.

It’s anticipated that curbing deforestation across Bunge’s vast agricultural holdings and supply chain will make a substantial contribution to reducing carbon dioxide (CO2) and methane emissions and thereby help avoid the risks and effects of rapid climate change. Much more in the way of benefits – social, environmental and economic – is expected, however.

Agriculture and Deforestation

With roots stretching back to the early 19th century international markets of Europe, Bunge is one of a small group – originally just five – vertically integrated and now publicly owned multinational company groups that continues to drive evolution of the globalized, industrialized food chain we have come to rely and depend on, yet typically take for granted or merely as a given.

Bunge ag-chart-1

As growing numbers of experts and critics have and continue to point out, it’s a food system that has become increasingly and heavily dependent on highly mechanized, increasingly computerized and corporate-owned monoculture, fossil fuels and a host of synthetic fertilizers, pesticides, herbicides, and, more recently, genetically modified (GM) seeds and staple food crops.

Along with urbanization, clearing land to grow agricultural commodity crops for export to a globalized marketplace is one of the greatest drivers of deforestation, an issue whose public visibility has increased tremendously over the course of recent decades. That isn’t only because of the large and critical role forests – tropical forests in particular – play when it comes to long-term carbon sequestration and global warming.

The deforestation that results from clearing land to grow agricultural commodities for export to a globalized marketplace has turned out to be a big contributor to the degradation of socioeconomic and political equity, as well as underlying ecological conditions locally, nationally, regionally and worldwide.

More specifically, clearing forests to make way for industrialized monoculture and agricultural systems whose primary aim is the production of commodity exports increases soil erosion, results in the rapid loss of species and biodiversity, and raises the risk of conflicts over land and natural resource rights. As has only recently been coming to light, it also disrupts longstanding and seasonal weather patterns, reducing precipitation, Green Century highlights in a press release.

That’s especially the case in lesser developed and developing countries in the tropics and Southern Hemisphere whose economies and societies depend on natural resources to a much greater degree than industrialized and service sector-driven economies and societies. Population growth, the degradation and loss of ecosystems, biodiversity and the critical life-supporting products and services they provide continues at rapid rates in these countries.

Bunge’s Zero Deforestation Policy

Instituting its zero deforestation policy, Bunge can make a significant contribution to resolving critical, increasingly urgent problems that will affect much of the world’s population. According to the Bunge Citizenship web page, the global agribusiness group commits to:

  • Eliminate deforestation from our agricultural supply chains worldwide, employing tested methodologies that incorporate carbon and biodiversity protections;
  • Respect local and indigenous community rights and apply free, prior and informed consent for land purchases and use;
  • Enhance the ¨traceability¨ and transparency of key supply chains over time,
    publicly disclose progress on our efforts;
  • Bunge’s existing global labor policy prohibits forced and child labor and protects freedom of association.

In addition, starting immediately Bunge will:

  • Inform grain and oilseed suppliers of these commitments and encourage them to avoid deforestation and peat land clearance;
  • Begin developing action plans to operationalize these commitments in commodities other than palm oil, with the aim of finalizing these plans by the end of 2016;
  • Collaborate with stakeholders to develop and test methodologies and practical tools that support and enable forest protection;
  • The timing of our efforts and the methodologies we apply may vary by region and commodity;

The launch of Bunge’s ¨zero deforestation¨polciy aligns it with industry peers such as Archer Daniels Midland (ADM), which instituted a ¨zero deforestation¨ palm oil and soy policy about four months ago. Green Century was instrumental in bringing about ADM’s new policy as well.

In addition, it comes as Pope Francis addresses the US Congress on a number of key global issues and the ethics embedded in them, climate change and socioeconomic equity included. Furthermore, UN representatives, government leaders, environmental and public interest groups and others are in New York City to participate in Climate Week NYC 2015. The UN meetings taking place there are a prelude and are expected to help pave the way to a new multilateral climate change accord  at this year’s UN Framework Convention on Climate Change (UNFCCC) Conference of Parties that is to take place in Paris this December.

“Bunge has listened to investors’ concerns in adopting strong environmental policies that protect the company and its shareholders while acting as a catalyst for more improvements in the industry,” Leslie Samuelrich, Green Century Capital Management’s president, was quoted as saying.

“We are racing the clock to curb climate change so when an agricultural giant like Bunge adopts a cross-commodity policy, it has the power to send waves of change throughout global supply chains,” added Samuelrich.

For those interested in learning more about the evolution of the great grain and agricultural trading houses and the globalized agricultural commodities markets and supply chains I can recommend reading Dan Morgan’s ¨Merchants of Grain

Though first published in 1979, I still see it as a classic exposition of the evolution of agribusiness and a globalized, industrial food chain. I think it is essential reading for anyone involved or interested in agriculture, how our food is grown, how it makes it to our tables, and how people and countries worldwide have come to be dependent on just a small set of staple food crops grown by farmers as directed by and large by giant, globalized agribusiness concerns.

*Images credit: Bunge Limited