Shareholder engagement by Rhode Island Treasurer Seth Magaziner led to an agreement by Archer Daniels Midland to consider adopting companywide policies for reducing greenhouse gas emissions.
Mr. Magaziner, who oversees the Rhode Island State Investment Commission, including the $8.1 billion Rhode Island Employees' Retirement System, Providence, said in a statement that companies "especially 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."
Evan England, spokesman for Mr. Magaziner, said in an email that the treasurer's engagement with ADM was new this shareholder season. The pension fund held 121,391 shares worth $5.1 million when it filed the shareholder proposal, which was withdrawn as a result of the agreement.
"As long-term investors, we have an interest in ensuring that the companies in which we invest are preparing for a carbon-constrained future," Mr. England said. "We believe that assessing goals to increase renewable energy is in the long-term interest of the company and its shareholders."
"ADM has a strong track record of integrating sustainability concerns and environmental responsibility into the company's everyday business practices but didn't have a companywide goal for increasing the company's use of renewable energy," Mr. England added.
The agreement calls for the company to publish a report on the cost of greenhouse gas reductions by the end of the first quarter of 2020.