I’m thrilled to (finally) have some positive news to report on the climate change front.

Last year, we wrote about a shareholder proposal that Trillium Asset Management (Trillium) and Calvert Investment Management (Calvert) filed with the J.M. Smucker Company urging the company to disclose climate-related risks in their coffee supply chain. Nearly a year later, and after organized pressure urging the company to act, Smucker’s has taken promising first steps to address climate risks.

Smucker’s, better known for their jelly and jams, is a lead distributor of Folgers and Dunkin’ Donuts coffee brands with coffee accounting for nearly half of its profits. Coffee is particularly susceptible to climate-related risks, such as temperature variability and weather extremes, and coffee farmers often lack the resources to support their families in the face of increased unpredictability in crop yield.

In 2010, the Securities and Exchange Commission (SEC) adopted guidance for publicly traded companies, requiring them to disclose climate change risks, such as physical risks to a company’s assets and supply chains. Smucker’s reported on some climate risks in its 10-K filings, but had failed to demonstrate to shareholders how they were managing these risks.

While last year’s shareholder resolution received a strong vote of support, the company did not commit to any meaningful actions in response, leading Trillium and Calvert to file a similar resolution this year. Oxfam America, a Smucker’s shareholder, supported this resolution and in June of 2012, our President Raymond Offenheiser sent a letter to Mark Smucker, Director and President of US Retail Coffee for Smucker’s, urging the company “to adopt a strategic plan which addresses temperature changes, changes in rainfall patterns, and the company’s responsibility to the coffee farming families in its supply chain.”

In response to the growing pressure, the company recently announced a set of new initiatives in their 2012 corporate responsibility report ahead of the company’s annual meeting. The move has lead Trillium and Calvert to withdraw their shareholder proposal. Smucker’s coffee sustainability initiatives include:

• A goal for certified coffee purchases to reach 10 percent of its total retail purchases by 2016.
• A partnership with the Hanns R. Neumann Stiftung Foundation to focus on agronomy training, organizational development, and climate change adaptation strategies in order to improve the farming conditions, yields, and incomes of small-scale coffee farming families.
• A partnership with World Coffee Research with a focus on the science of coffee in order to develop hybrid varieties using classic breeding techniques.

While these actions only represent a first step, it’s critical that the company is beginning to publicly recognize climate change risks in their coffee supply chain. It is a sign that corporate pressure can pay off and that that extreme weather events, like the devastating drought that’s currently gripping much of the US and threatening global food security, are serving as a wake-up call to companies about the economic realities of a changing climate.

Public disclosure of climate risks and the development of a strategic plan to address these risks are important next steps that the company should take to ensure that the company is held accountable and that small-scale farmers in Smucker’s supply chain have adequate resources to prepare for and respond to climate threats. Not only will such resources protect farming communities, they will surely benefit global companies, like Smucker’s, who rely on a stable supply of high-quality coffee beans.

This blog was written by climate change program director David Waskow.

Hurricanes season is upon us (it officially starts tomorrow, June 1). In vulnerable communities in places like Haiti and Central America, everyone knows it’s a time when the consequences of extreme storms can be devastating.

But it’s also a moment when businesses should be thinking about the risks they face from those extreme weather events—and from the climate change that is making those extremes more intense and more frequent. Business supply chains and operations are already being affected—including in some of the hard-hit communities around the globe that businesses depend on for their supplies and operations.

That’s why Oxfam America, together with Ceres and Calvert Investments, released a guide today for companies and investors laying out what businesses should disclose about the physical climate risks they face and what they’re doing to manage them.

The guide builds on the guidance that the SEC released in 2010, which advised companies to disclose material risks from climate change impacts in their securities filings—from extreme weather events to increasing water scarcity and rising sea levels. There are also voluntary modes of disclosure, such as the Carbon Disclosure Project, through which companies can provide information about climate impacts they face. The new guide describes the types of impacts being faced in a set of seven key industries and outlines practicable, actionable steps that companies should take to report on physical climate risks and manage them.

In many cases, the climate impacts on business supply chains and operations are often intertwined with local communities–from facilities and employees to services and supplies. Companies need to understand—and be transparent about—the ways in which climate change is likely to affect them—not only so they can be prepared but also to ensure that the communities that they rely on are also prepared (and in order to avoid practices that undermine the climate resilience of communities).

Last year’s flooding in Thailand and Cambodia offers a dramatic and disturbing example of the way in which extreme weather events can cause extensive damage both to communities and business supply chains. More than 160 companies in Thailand’s textile industry were harmed in the floods and about a quarter of the country’s garment production was stopped in its tracks. It also was reported in the Financial Times that Dell’s share price fell by 5% at one point because of the impact from the flooding.

Of course, this is just the tip of the proverbial melting iceberg of the kind of impacts that climate change will bring. So as the changing climate bears down on us, we hope that this new guide lays the ground for businesses to acknowledge the risks that both they and communities face and to tackle this growing challenge.

Last week the Louisiana legislature passed the Louisiana Master Plan for Coastal Protection. The Master Plan is the most comprehensive effort by a state to address the effects of climate change. While there has been resistance across the US South to address the effects climate change, Louisiana has experienced severe climate related hazards including hurricanes and sea level rise which have contributed to the erosion of its coastline at an alarming rate. Below is a guest column that was published on May 26 in the Times-Picayune by Ray Offenheiser, president of Oxfam America, and J. Wayne Leonard, CEO of Entergy, which discusses the significance of this event.

 

When extreme weather hits, communities suffer in myriad ways: homes are destroyed, businesses lost, ecosystems ravaged. As the heads of a national energy company and a global humanitarian organization, we’ve seen the damages first hand, and engaged in the painstaking and often dangerous work of recovery and restoration. We believe it’s time to rally together to recognize the dangers of a changing climate, and to invest in reducing risk and building resilience.

At Entergy, we have a unique perspective on climate change. Our product—power—is vital to the public good. Extreme weather puts the reliability of our product at risk, and we must work with our communities to prepare for and respond to these hazards.

At Oxfam, we work to find lasting solutions to global poverty—and the weather is literally working against us. Of the 820 disasters recorded last year, 90 percent were related to severe weather. Climate change is playing a role in this, and it’s the poorest—at home and around the world—who are affected most acutely, and find their struggle against poverty increasingly difficult.

Our worlds intersect especially along America’s Gulf Coast, where already socially vulnerable communities have recently been hit hard by the forces of Mother Nature. Hurricane Katrina brought historic devastation, then Hurricanes Rita, Ike and Gustav added to the toll. These events also provide a glimpse of what our future could look like continuously, if we don’t invest in building more resilient, sustainable communities. With the loss of natural protections from coastal wetlands, and sea level rise, the Gulf Coast could see more than $350 billion in weather-related losses by 2030.

This is why we applaud the leadership of the state of Louisiana, which developed and approved the Master Plan for Coastal Protection and Restoration. This plan itemizes $50 billion in investments over 50 years: restoring wetland habitat and building flood protection by restoring natural buffers to hurricanes and storm surges (marshes and barrier islands).

These actions—combined with cost-effective measures like adopting building codes to harden structures, elevating housing, and facilitating better planning—will reduce future losses. While the master plan is designed first and foremost to address land loss that has occurred due to human interventions stretching back almost a century, including river control structures and oil and gas development, threats to the region will be greatly multiplied by the predicted effects of climate change, including sea level rise and increased storm intensity.

Importantly, the actions included in the master plan represent a far-sighted and proactive solution that will help safeguard the citizens and industries of the Gulf Coast from the consequences of human actions, both historic and ongoing.

This plan provides economic opportunity for thousands—as businesses hire dredge operators, engineers, welders, biologists and boat captains—all while strengthening communities. The growing innovation and expertise can then be exported around the world. These measures will enable the Gulf Coast to continue to be the backbone of our nation’s economy and a safe home to the people who make it a national treasure.

Our country has been slow to accept the reality and risks of climate change. But it is absolutely essential at this point. With Oxfam, Entergy has joined companies representing a range of sectors—insurance to finance, apparel to food—to promote the importance of taking action. We believe that responsible business practices and strong policies will help us prepare for and respond to climate change. Failing to act will mean much greater costs later—in dollars and cents, and in human suffering.

No matter our different perspectives, we end up at the same place: determined to act together to improve our ability to cope with the profound effects of climate change. The choice is ours to make; the time to make it is now.

J. Wayne Leonard is CEO of Entergy Corp. and Raymond C. Offenheiser is president of Oxfam America.

 

For almost two decades, communities from the Ecuadorian Amazon have been fighting a long-shot legal battle against Chevron-Texaco for the billions of gallons of oil and toxic wastes dumped into their lands and water (well described in a recent New Yorker piece by Patrick Radden Keefe). With last week’s decision by an Ecuadorian Appellate Court upholding an $18 billion judgment (see prior Oxfam blogging on the case here and here), these communities may finally have what they need to hold the company accountable. Because Chevron has no operations in Ecuador, plaintiffs will need to have the judgment enforced elsewhere. With this decision in hand, they can seek Chevron assets in dozens of countries, including the United States. A memo drafted by plaintiff lawyers details the many options now available to them.

Chevron has gone to unprecedented lengths in fighting this case and its public response to the ruling shows no sign of wavering. Last year, Chevron managed to convince a US federal judge to block enforcement of the case anywhere in the world! That decision—a gross overreach—was fortunately overturned by the US Court of Appeals, making last week’s ruling all the more significant. Chevron continues to litigate the case in the United States and in The Hague, but its prospects for escape are rapidly diminishing. With Chevron also facing a multi-billion dollar lawsuit by the Brazilian government over a recent spill, settling the Ecuador case has to be high on people’s minds.

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Heat-related deaths in the field. Child labor. Wage theft. And decrepit housing. You might think that I was talking about conditions in a developing country, but actually this is the picture of our own agriculture system here in the United States. A report released last week by Oxfam America and the Farm Labor Organizing Committee (FLOC) completed a human rights impact assessment of the North Carolina tobacco supply chain and documented many of these conditions.

At the launch of the report were some 60 migrant farm workers in Dudley, NC. You could smell the tamales roasting and the smoke from the barbeque while the President of FLOC told workers in Spanish to keep up the fight for justice. What really energized the crowd though, was a student from the United Students Against Sweatshops (USAS), Theresa Chang, who promised that USAS would unleash a campaign against Reynolds American Inc. on campuses across the country.

Oxfam and FLOC’s report, “A State of Fear: Human Rights Abuses in North Carolina’s Tobacco Industry,” found that changes in the tobacco industry in the last decade have made it impossible for many growers to survive on the income from their tobacco: Profits have shrunk, and growers can’t cover rising production costs. As a result it isn’t surprising that one in four farm workers in the study reported that they were paid less than the federal minimum wage of $7.25 per hour, and nearly all of the workers living in employer-provided housing described problems such as inadequate or nonfunctional showers and toilets, overcrowding, leaky roofs, lack of heat, and beds with worn out mattresses or none at all. As one farm worker said in his interview, “The contractor decides the pay rate and we have to either take it or not… If they are paying less there is not much more to do. We need work.”

As I drove three workers back to their labor camp after the launch event in Dudley, they began to tell me about the conditions of their housing. “There are so many bedbugs, they can’t get rid of them. They are everywhere,” said one worker. My colleague and I were shocked though when we pulled up to the housing. A ramshackle wooden structure that was located far off the main road with very few modern conveniences.

Unfortunately, the report confirms the deplorable conditions that we all hear about in the news. Just last month, federal officials fined three farms in Washington state $73,000 for the use of child labor in their strawberry fields. Since 2005 there have been 16 heat-related deaths of farmworkers in California alone, and this in the only state to have a legal requirement to provide shade and water breaks.

The assessment reached out to all stakeholders in North Carolina’s tobacco supply chain including manufacturers like Phillip Morris International (PMI) and Reynolds American Inc. The report also interviewed over 100 farmworkers. All stakeholders in North Carolina’s supply chain, including tobacco manufacturers like Phillip Morris International (PMI) and Reynolds American Inc., were invited to participate. Even though most of the manufacturers chose not to participate in the study, PMI did. Vice President of Regulatory Policy, Till Olbrich, acknowledged that a critical piece was missing in evaluating their supply when he said: “Because our contracts are with the farmers or in many cases even just the supplier who then, in turn, has to contract with the farmers, traditionally we have not had the practice of systematically reaching out to the labor on the farm. That has to change.”

More investments are needed in agricultural supply chains; growers are losing ground. They need to be involved in pricing formulas for their crops and be given multi-year contracts. Manufacturers need to create mechanisms that ensure that legal compliance occurs throughout their supply chain. They need to recognize farmworkers as full stakeholders and be included in audits and assessments. Farm workers should be guaranteed a voice in the system by guaranteeing the right to feely associate and the right to collectively bargain with their employers. When writer and restaurant critic Ruth Reichl in an interview with Chronicle HQ was asked what would be the next big food issue, she pointed to the conditions of farmworkers:

I feel like the next issue is going to be social justice for workers. Right now, all of the – well not all, but a lot – of the issues about pesticides and genetic modification are me-me-me. “I don’t want to eat this because it’s bad for me, or bad for my children.”

But the real issue isn’t us-us-us. The real issue is those people out there in the fields, surrounded by pesticides for their entire lives. The real issue is the people who are cutting meat in freezing cold temperatures, not making a livable wage and being cheated out of money. The real issue is the fact that agriculture in this country can’t operate without illegal labor.

I agree.

Today’s blog post is an update to a previous post, With a Name Like Smucker’s…

Today’s shareholder vote at the Smucker’s annual meeting marked an important step towards getting the company to report on climate risks associated with their coffee business and supply chain. The proposal received roughly 30% support (based on preliminary numbers). While 30% might not sound notable, a recent report on the 2011 proxy season puts the vote in perspective: the report found that investor support for shareholder resolutions on environmental and social issues rose to a 20.5% average approval rate (the first time support has ever reached the 20% mark). 30% sure sounds like a lot when measuring against that baseline. Analysts at Trillium Asset Management and Calvert Investment Management also report that first year resolutions generally garner far less support as investors are initially introduced to the proposals.

This vote sends a clear signal to Smucker’s leadership that shareholders are raising legitimate concerns around disclosure of social and environmental risks in their coffee supply chain. Trillium and Calvert will engage with company representatives in the fall pressing them to respond meaningfully to investor concerns about coffee and climate change. While the two investment firms hope to make progress with the company over the course of the next year, they will reserve the right to re-file the resolution in 2012 if necessary. 

Oxfam will help keep the pressure on Smucker’s to adequately respond and we’ll keep you updated on opportunities to engage.

When you think of Smucker’s, jelly and jams typically come to mind, but they are just the tip of the iceberg. The J.M. Smucker Company is actually a leading distributor of Folgers and Dunkin’ Donuts coffee brands (who knew?), with coffee accounting for 40% of the company’s net sales and nearly half of its profits. That’s a whole lot of coffee, considering that the company sells and manufactures many other widely-used household brands like Crisco, Jif, and Pillsbury.

Coffee crops are highly sensitive to weather and temperature fluctuations making it particularly vulnerable to climate change. This past year the cost of coffee skyrocketed following increased demand and poor harvests in high-producing countries like Colombia and Brazil.   In 2010 the Securities and Exchange Commission (SEC) adopted new guidance for publicly traded companies, requiring companies to disclose climate change risks, such as physical risks to a company’s assets and supply chains. 

Disclosing these risks will create much needed transparency to help investors understand how companies’ supply chains, and the communities that support them, could be impacted by increasingly extreme weather and other likely results of climate change.

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Spring is the season of Annual General Meetings (AGMs) – a rare moment when corporate executives have to account to their shareholders. For the growing “socially responsible investment” (SRI) movement and a handful of NGOs and other advocates, AGMs provide a chance to raise critical issues and rally shareholder support for corporate change. Chevron’s AGMs have often been contentious, but this year’s meeting – happening today – should be particularly interesting.

Shareholder advocacy can be a useful tool in campaigns and Oxfam has long worked with the SRI community to put pressure on targeted companies. Among its shareholder advocacy efforts, Oxfam worked with the Coalition of Immokalee Workers to pressure Yum! Brands around farmworker compensation; worked with shareholders and Fair Trade coffee advocates to pressure Kraft at its 2003 AGM, worked with partner groups from Ghana, Peru, and Nevada around Newmont Mining Company’s 2005 AGM; and raised Ethiopia trademark rights at Starbucks’ 2007 AGM.

In 2008, Oxfam America established a Fund specifically aimed at purchasing shares in targeted companies. “As a shareholder, we have added rights and legitimacy to engage with corporate leadership; it has greatly expanded and strengthened our corporate advocacy work,” says Michelle Katz Talukdar, who oversees the Fund at Oxfam America. Among the 25 companies in its portfolio, Oxfam has attended RJ Reynolds AGMs in 2010 and 2011 to support the rights of tobacco farmworkers.

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Oxfam International submitted its formal comments on a draft set of UN “Guiding Principles” for business and human rights last week. These Principles, if approved, will constitute a major milestone in a long-standing effort to apply human rights standards directly to corporations. More about where to from here on business and human rights in future posts. This post will try to put the Principles into some perspective.

The Principles cap six years of work by Harvard Professor John Ruggie – the UN Special Representative on business and human rights. Ruggie was thrown into this process by Secretary General Kofi Annan in the wake of a bitter fight over a set of draft “UN Norms” – vigorously promoted by human rights advocates (including Oxfam), but roundly rejected by governments and businesses.

Ruggie’s first full report to the UN Human Rights alienated much of the NGO community by rejecting and thereby essentially killing the Norms. But at the same time, that report provided a very effective argument for the urgent need to address corporate human rights impunity. The core human rights treaties, designed in a post-World War II era of powerful states, don’t contemplate corporations explicitly and are ill-suited to current realities. Jurisdictionally-limited and often weak, under-funded, or corrupt public authorities are little match for today’s 80,000 plus multi-national corporations with their vast and amorphous global networks, buttressed by thousands of trade and investment agreements.
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