ecumenical advocacy days april 6, 2013. faith-based investor coalition iccr is a global coalition of...

Ecumenical Advocacy Days April 6, 2013

Faith-based Investor Coalition

ICCR is a global coalition of 300 religious investors from the Catholic, Jewish and Protestant communities representing over $100 billion in assets under management.

ICCR has over 50 associate members--socially responsible investment firms, public pension funds, union pension funds, foundations and universities.

ICCR members act in coalition as shareholders in the world’s largest corporations to promote more just and sustainable business practices.

http://www.iccr.org

How We WorkHow We Work

• • DIALOGUESDIALOGUES

•RESOLUTIONSRESOLUTIONS

• • CSR TOOLSCSR TOOLS

Human RightsTrafficking and Slavery

Food Safety and SustainabilityInvestment StrategiesNon Therapeutic Use of Antibiotics GMOs

Environmental HealthFrackingToxic Chemicals in Consumer Products

Water Safety and SustainabilitySustainable UseContamination

Financial ServicesPredatory LendingRisk Management Financial Policy Reform

Global and Domestic HealthAccess and AffordabilityHealth Care Policy Reform

ICCR Resources

Obesity Trends Among U.S. AdultsBRFSS 1991

Source: Behavioral Risk Factor Surveillance System, CDC

Obesity Trends Among U.S. AdultsBRFSS, 1993


No Data <10% 10%–14% 15%–19% 20%-24% > 25%




No Data <10% 10%–14% 15%–19% 20%–24% 25%–29% ≥30%


Globalization and the agriculture-food-health nexus

“ Obesity Fear Frenzy Grips Food Industry” “Why Coke's Creative Chief Esther Lee Isn't Alone in Fearing FTC, Critics”

Company Responses: Voluntary Initiatives

Children’s Food and Beverage Advertising Initiative

Facts Up Front

Partnership for Healthy America

Healthy Weight Commitment Foundation

Let’s Move

Assesses 25 of the world’s largest food and beverage companies on their nutrition-related commitments, practices and performance globally.

OBJECTIVES OF SHAREHOLDER ADVOCACY:

Develop/implement a policy to address the company’s nutritional impact on global under nutrition and obesity.

Strengthen self-regulatory initiatives around marketing to children.

Make nutritional information readily accessible/understandable through labeling.

Make healthier, more affordable products.

Disclose all lobbying efforts.

GMOs: The Problem

o Weak regulatory system in the US.o No long-term studies on health /environmental effects.o Unknown allergenic effects.o International opposition.o Corporate power over local and indigenous growers.o No labeling to protect consumers.

GMOs: The Right to Know

• Focus on labeling of GMO products

• California’s Proposition 37 – Ballot initiative that would provide consumers with labeling information regarding whether their food has been genetically engineered in specific ways.

GMOs: ICCR actions

o Letters to companies that gave to the campaign to oppose Proposition 37.

o Shareholder resolutions calling for labeling.

- Abbott, ConAgra, Kraft, Pepsio Shareholder resolutions calling for disclosure of risk.

- Dow, Dupont, Monsanto

ANTIBIOTICS…IN YOUR MEAT?

What’s the big deal? Public health

Example of Prevalence• 395 pork samples from a total of 36 stores in

Iowa, Minnesota, and New Jersey.

• S. aureus—a bacteria that can cause serious human infections of the bloodstream, skin, lungs and other organs—was isolated from 256 samples (64.8 %) and of those, 26 pork samples (6.6% /total) were found to contain MRSA.

-University of Iowa College of Public Health report

• “The industrialization of pig and poultry production could lead to a higher risk of disease transmission from animals to humans.” UN FAO, 2007

• “Industrial farms are super-incubators for viruses.” Pew Commission on Animal Farm Production

• The American Public Health Association, largest association of public health specialists, called for a moratorium on factory farms 5 years ago.

Snapshot: Tyson Fines• 2001 $7.3m fine Tulsa, OK polluting city drinking

water• 2003 $7.5m fine untreated waste into tributary of

Lamine River, MO• 2005 OK Polluted surface, ground, drinking water

Illinois River Water shed from run off poultry litter- still in court

• 2009 $2m civil penalty and $4.1m fine in Missouri River ,NE

Ask of Meat Companies:

• Phasing out routine use of feeds containing antibiotics

• Implement practices that do not require routine administration of antibiotics to prevent/control disease

• Annually publish data on types/quantities of antibiotics in feed

Ask of Pharmaceutical Companies:

• Develop a public statement on anti-

microbial resistance• Publically explain their commitment to

human and animal health• Review their portfolio of products &

conflicts of interest

Ask of restaurants/retailers:

• Policies on purchasing meat and poultry produced with antibiotics and how compliance is assured

• Education of consumers about meat and poultry purchasing policies

• Provide % of meat purchased that are produced without any antibiotics; or includes antibiotics only for treatment and control of disease; or if employs routine use

Engagements with CorporationsEngagements Current New

Meat sector • Hormel • Tyson• Smithfield

• Kraft

Retailers • Wal-mart• Kroger• Costco

Restaurants • Darden• Yum brands

Pharma • Merck• Pfizer

Success!• Merck’s policy

• Meat industry’s deadlock• Increased demand• Rise of MRSA, CRE and other ‘super-bugs’

…and Challenges

EXCESSIVE SPECULATION IN FOOD

COMMODITIES

Goals: To understand

• What is this issue?

• Why is this a focus issue?

• Who it impacts?

• How we see a path for change.

Commodities

• For Farmers : risk mitigation determining price

• Benefits of Futures Farmers = hedge against decreasing price Commodity Buyer (General Mills) = lock in good price

today for future delivery Speculators = profit from increase/decrease in price

Risk

Profit

Commodities• The Glass Steagall Act of 1933

Banks cannot use federally insured $ or loans for risky speculative trades

AKA separated commercial and investment banking

The 2000’s• Commodities Futures Modernization Act

• Goldman Sachs Index and other funds are marketed to large institutions Increased investments from $13 billion in 2003 to $450 billion

in Q4 2011.

• Crisis (housing) and Flood into Commodities World Bank Outlook 304% increase in commodities funds.

Commodities Futures Modernization Act

•Removed oversight•Speculators exempted from gambling laws•Weakened the CFTC•New over-the-counter derivatives in a variety of markets, (sub-prime housing)•Permitted all investors to trade without any position limits, and minimal disclosure requirements

SPECULATORS

• Take No Delivery

Speculative Bubbles• Harm consumers• Jeopardize the ability of hedgers to guard

against price risks• Increased hedging costs • Diminishes confidence in commodity

prices fairly reflecting actual supply and demand factors.

Why too much institutional money is bad.

• Large institutions = passive investments.• Rolling cost, food expiration. • Buyers of index funds base their buying

decisions on asset allocation, instead of supply and demand of commodities.

• Throw prices markets natural balance, too much betting on future (fictional) prices.

But you said, “FUTURES”.

• Futures are standardize contracts.• Today many are made via funds.• Futures prices directly affect spot prices.• Many large purchases of commodities,

both in the U.S. and around the world, are made using the nearest-month’s futures price as the basis.

Why this matters?

• Excessive speculation in food futures = volatile prices of today’s food.

2008: Hunger across the globe

• Price of food skyrockets • Food commodities volatility• 1 million are pushed into hunger• 2 billion spend over 50% of income on

sustenance• Riots in over 30 countries based on the

price of food

What we need:

• Meaningful position limits and margin requirements on speculators (collateral)

• Mandatory clearing and data reporting requirements

• Prohibitions on dangerous proprietary trading activities

Mercy Investment Services“More than 925 million people worldwide live in chronic hunger, and speculative investments in food commodities contribute to this number. The pricing of commodities impacts the global availability and affordability of food in both developed and developing countries.

Because Mercy Investment Services has no underlying interest in food commodity production, any investment we would make is speculative in nature since we profit by the increases in the price of the food commodities”.

What will satisfy us? Action!

• Institutional Investors

• Banks

• Food/Bev Companies

• Federal action: Stronger regulations- better position limits; no industry “self-regulation”.

True or False?• As a result of the increases in prices of

basic food commodities and oil in 2007-2008, the number of people in extreme poverty rose by 130 to 150 million.

True or False?• After the Great Depression, limitations

were placed on outside speculators in order to guarantee that they could provide needed liquidity for commodity markets, but would not be able to unduly influence prices.

True or False?• After passage of the Commodities

Futures Modernization Act in 2000, institutional investors (pension funds, university endowments, etc.) increased their investments in commodities futures from $13 billion in 2003 to $450 billion in Q4 2011.

Passive investments disturb the price discovery function of futures markets because :

•A) They tend to be long-only investment vehicles and therefore tend to push prices up. •B) Buyers of index funds base their buying decisions on asset allocation and rebalancing their portfolios, instead of supply and demand of commodities, they throw prices off from their natural balance.•C) Both A and B.

Goal Recap:

• What is this issue? Excessive speculation in food came after

deregulation and while large investors were looking for new places to place their money.

• Why is this a focus issue? Large institutions normally park their money in an

asset class, and walk away. This drives the cost of futures up, and hence the volatility we see at the grocery store.

Goal Recap:

• Who it impacts? All of us, but especially the poor. There

were riots in over 30 countries in 2008 due to food prices.

2 in 7 people spend more than 50% of their income of food.

Goal Recap:

• How we see a path for change. Better regulations:

Position limits and margin requirements on speculators Mandatory data and clearing prohibitions Adequate Funding for CFTC

Educate others. Know what affect your investments have, especially on the poor and hungry!

“Imaginary wheat bought anywhere affects real wheat

bought everywhere”.

F. Kaufman, 2012.

In New York, our vigil ended with prayer and the following words, sung to the tune of “When the Saints Go Marching In”

Don't speculateOn food and gasDon't speculate on food and gasYou're causing hunger 'round the worldSo don't you speculate no more!

Let's get Wall Streetout of our foodLet's get Wall Street out of foodOh how I want to live in that countryWhere Wall St. can't buy food.

“Given the fragility of the food system, it is incumbent on all companies in the food supply chain, as well as investors, to ensure their policies & procedures do not further contribute to the growing crisis but instead will advance innovative solutions that will create a more sustainable food system.”

ecumenical advocacy days april 6, 2013. faith-based investor coalition iccr is a global coalition of...

Documents

cdc slide

obesity trends

adults brfss

iccr members

global coalition

iccr resources

domestic health access

union pension funds