In response to shareholder engagement led by Rhode Island General Treasurer Seth Magaziner, Archer Daniels Midland (ADM), one of largest agricultural processors in the world, has agreed to assess the feasibility of adopting quantitative, company-wide goals for reducing the company's greenhouse gas emissions, including increasing its use of renewable energy.
As a result of this agreement, Rhode Island has withdrawn the shareholder proxy proposal filed on this topic at ADM late last year.
"Pension funds are long-term investors," said Treasurer Magaziner. "Companies, especially those as large as Archer Daniels Midland, must have a plan to adapt their business model to reduce dependence on fossil fuels. A transition to renewable energy can help stabilize and reduce energy costs – freeing up corporate resources that can be invested for sustainable growth."
ADM has acknowledged that sustainability is integral to its business, and to creating value for its shareholders. The company has agreed to produce a report outlining the feasibility of greenhouse gas targets, for review by its board of directors, by the end of the first quarter of 2020. Following the board's review, ADM will make the report publicly available on its website.
Beyond decreasing price volatility, increasing the use of renewable energy can help companies proactively prepare for the implementation of energy-efficiency standards and carbon-reduction regulations. Increased use of clean technologies and renewable energy may also reduce business continuity risk.
The Rhode Island Treasurer's Office appreciates ADM's engagement with investors and looks forward to continued conversations. We hope that ADM continues to take an industry-leading position by integrating sustainability concerns into all aspects of the company; creating long-term value for shareholders - including members of Employees' Retirement System of Rhode Island.
More information on Treasurer Magaziner's shareholder engagement can be found at: www.treasury.ri.gov/shareholderengagement
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