Alliance Notes: Arcos Dorados / Brazilian Beef / E-Waste / Carbon Transition

Monday, September 28, 2020

 

                        Alliance Events, 9/28/20

 

Announcements and Upcoming Events

 

Source: Arcos Dorados

Sustainability under the Golden Arches 

On Oct 9 at 10am the Alliance Agriculture Program will host Gabriel Serber, Head of Social Impact & Sustainable Development at Arcos Dorados Holdings, the Argentine company that owns the master franchise for McDonald's in 20 countries in Latin America and the Caribbean. Arcos Dorados is the largest McDonald's franchisee in the world in terms of system-wide sales and number of restaurants. Mr. Serber will present on the Company's sustainability strategy including their beef and soy supply chain management practices to comply with their zero deforestation policy.  This call is for Agriculture Working Group members; other interested investors please contact Nadine Cavusoglu.

 

Recaps of Recent Events

 

Update on Deforestation and VISIPEC with Chain Reaction Research and NWF

 On September 18, the Alliance Agriculture Program held a webinar on Deforestation Risk in the Brazilian Cattle Supply Chain. This is a topic that the Alliance has covered from a number of angles over the past year, and the focus was a new report by the US think tank Chain Reaction Research: Brazilian Beef Supply Chain Under Pressure Amid Worsening ESG Impacts. Co-authors Barbara Kuepper,  Matt Piotrowski and Gerard Rijk presented this comprehensive overview, which shows the extent to which beef production in Brazil has expanded and chronicles efforts to achieve more compliance and transparency from the cattle sector. One of the noted issues is the lack of progress by the meatpackers in monitoring their indirect suppliers,  thus allowing cattle laundered from deforested areas to enter their supply chains. On the webinar, we were also joined by Simon Hall of the National Wildlife Federation, whose VISIPEC tool can help bring enhanced visibility to the meatpackers multi-tier supply chain. Among the leading Brazil meatpackers, Minerva is testing it and Marfrig has announced plans to start testing it soon.

 

TMT Webinar on E-waste

By Rhododendrites - Own work, CC BY-SA 4.0, https://commons.wikimedia.org/w/index.php?curid=83244282

The Alliance kicked off its first technology, media & telecom (TMT) program on September 17, with a presentation focused on electronics waste, the working group’s initial topic. Vanessa Forti of United Nations University gave a presentation entitled Global Monitoring of E-Waste.  The Alliance’s William Woo hosted the presentation and moderated questions. Vanessa provided viewers with a definition of the problem in relation to the UN’s Sustainable Development Goals of Environmental Protection, Health, Employment and Economic Growth and provided a global and regional statistical breakdown of the 53.6mm MT per year issue – that’s 7.3kg per capita! 

As an author of the Global E-Waste Monitor which publishers global statistics and policy updates on the topic, Vanessa highlighted several key points including:

  1. E-Waste is the fastest growing area within waste overall; Asia has largest total amount of e-waste (~50%) due in part to the population but the Americas, Europe and Oceana are the highest per capita regions in the world; 
  2. Only 17.4% of this global waste is properly recycled most of which treated in a non-environmentally sound, including through illegal trading/diversion; Notably Europe has achieved 42.5%
  3. The inherent value of recovered materials such as Gold from electronics waste is high and there should be an economic model/incentive for programs to produce high recovery rates of these materials; 
  4. EU policy based on extended producer responsibility (EPR) seems to underpin relatively higher collection rates in EU countries than those other regions; nonetheless, flaws exist with this model
  5. EM countries/corporation best practices should incorporate a “treatment fee” to eliminate the incentive for informal, uncontrolled recycling flows

The next TMT program will explore EPR further.  We thank Vanessa for her participation.

 

Chatting about engagement with extractive firm

On Sep 17, members of the Extractive Industries working group gathered on zoom for a discussion on engagement and advocacy in the extractive sectors. The purpose was to share feedback and ideas, both on specific engagements that members are working on as well as more generally with the engagement process. We discussed Vale, Grupo Mexico, Fresnillo, Buenaventura, permafrost-exposed Russian extractive companies, Antofagasta, MedcoEnergi, Codelco, Petrobras and SQM. Over time, we hope to use this forum to develop specific engagements to promote best practice, and are looking for more investors to develop a dialog with both Grupo Mexico and Fresnillo. Reach out to us if you are an investor with an interest in engaging with any of those names, or who would like to participate in future forums.

 

Carbon Transition in Emerging Markets kick off

Last week the Alliance held the kick-off meeting to discuss a new project, the Carbon Transition Initiative, which will look at the impact of decarbonization on emerging markets sovereigns and corporates, from a range of perspectives. A number of asset managers joined the lively discussion providing feedback on the topics and scope of the series, which is expected to launch later this fall. If you are an investor and interested in being involved in the steering committee for this initiative, let us know.

 

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that enables institutional emerging market investors to support good governance, promote sustainable development, and improve                                                   Investment performance in the governments and companies in which they invest.

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