Among soy companies evaluated, ADM has yet again scored better than its competitors.
ADM has continued to work with its peers through the Soft Commodities Forum (SCF) to curb deforestation in Brazil’s Cerrado biome. In 2020, SCF members launched a program with Solidaridad Brazil to engage with farmers. The program’s purpose is to help farmers increase efficiency on existing land so they do not have expand through clearing forests. Working with other soy traders in the SCF, ADM has helped develop a common framework to trace purchases back to suppliers. Through the SCF, ADM reported that it would have full traceability to direct suppliers by the end of 2020. In June 2020, the company reported that it could already trace 92 percent to farms. ADM sources 44 percent of its Brazilian soy in the Cerrado, and 17 percent of those volumes are in the 25 “principal municipalities,” the main areas that the SCF has targeted for intervention action.
Despite its work in the SCF, ADM still has significant risk exposure to sourcing from suppliers connected to deforestation and fires. The number of fires in ADM’s sourcing areas during the summer jumped by 29 percent compared to 2019 amid a large increase in Mato Grosso. Like its peers, ADM faces criticism for not doing enough for tackling legal deforestation in the Cerrado, where the Brazil Forest Code allows extensive land clearing.
ADM is the 5th largest trader in Brazil’s Cerrado region, with more than 30 silos and 13 oilseeds processing plants in Brazil, and operations in eight Brazilian ports. While ADM’s priority municipalities in the Cerrado region saw 13,873 ha of deforestation in 2017, ADM has said it is committed to a transparent and traceable supply chain. ADM’s 2015 No Deforestation policy, and its commitment to not clear forested, High Carbon Stock, and High Conservation Value areas for planting, lacks a definite timeframe. Despite ADM’s direct supplier transparency, which has been a movement in the right direction, ADM has yet to state a year by which it will stop all deforestation.
Vanguard, State Farm Insurance, State Street, BlackRock, and Wellington Management are the top five shareholders.