New York State Comptroller Thomas P. DiNapoli announced Thursday that Dunkin' Brands Group, owner of Dunkin' Donuts, has agreed to set a date for sourcing 100 percent of the palm oil used to make its products from sustainable sources.
"Dunkin' Brands should be commended for taking the necessary steps to use only sustainably harvested palm oil in its products," DiNapoli said. "Consumers may not realize that many of the foods and cosmetics they eat and use contain palm oil that has been harvested in ways that are severely detrimental to the environment. Shareholder value is enhanced when companies take steps to address the risks associated with environmental practices that promote climate change."
According to the Rainforest Action Network, palm oil is used in more than 50 percent of all consumer goods and imports to the U.S. - a jump of 485 percent in the past decade. Production of palm oil from unsustainable sources has been found to accelerate deforestation, destroy rain forests and promote climate change, all of which present reputational and operational risk to companies that participate in the process and substantial risk to shareholder value. It has been estimated that deforestation and forest degradation account for nearly 20 percent of global greenhouse gas emissions.
In exchange for DiNapoli withdrawing a shareholder resolution that asked the company to address the social and environmental concerns associated with palm oil production, Dunkin' Brands Group will:
•Set a target date in its next corporate social responsibility report, to be published in the second quarter of 2013, for sourcing 100 percent sustainable palm oil or for purchasing GreenPalm certificates covering 100 percent of sourced palm oil;
•Develop plans in conjunction with its suppliers for independent verification of suppliers' compliance with company policy;
•Include a statement in its 2013 CSR report expressing support for a moratorium on palm oil expansion in rainforests and peatlands; and
•Commit to publicly disclosing company progress on this issue in future CSR reports.
In 2010, DiNapoli reached an agreement with Sara Lee Corp. to support palm oil produced in an environmentally and socially responsible manner by purchasing only from suppliers that are members of the Roundtable on Sustainable Palm Oil. In 2012, DiNapoli reached an agreement with the J.M. Smucker Co. to begin purchasing palm oil from RSPO certified sources in 2012 and source 100 percent of its direct palm oil purchases from responsible and certified sustainable sources by 2015.
Additionally in 2012, the comptroller reached agreements with three additional companies on ways to address climate risk: CMS Energy agreed to provide a unified greenhouse gas reduction target to the fund by mid-2012; Patriot Coal agreed to prepare a report to address environmental harms, risks and steps taken to mitigate its mountaintop mining of coal; and Celgene Corp. agreed to annually report on its environmental, economic and social performance.
In 2013, DiNapoli has filed resolutions with several companies encouraging them to foster sustainable business practices by addressing climate change risks. Resolutions with electric power providers Ameren, DTE Energy, FirstEnergy and SCANA urge the companies to report on actions to increase energy efficiency and renewable energy. DTE Energy agreed to the comptroller's request in late February.
In November, the Asset Owners Disclosure Project, an international not-for-profit global organization whose objective is to protect members' retirement savings from the risks posed by climate change by improving the level of disclosure and industry best practice, named the New York State Common Retirement Fund as the top-ranked U.S. public pension fund in its first-ever global climate investment index. The index shows how most of the world's biggest investors, including pension funds, are managing climate risk.