Archer Daniels Midland (ADM)

No leading practices were identified for the company in the governance and strategy measurement area.

No leading practices were identified for the company in the environment measurement area.

No leading practices were identified for the company in the nutrition measurement area.

No leading practices were identified for the company in the social inclusion measurement area.

Sustainable development strategy
ADM has set time-bound targets relating to deforestation and conversion, GHG emissions, water and waste management, and workplace health and safety. However, the company’s sustainable development strategy does not fully align with the three benchmark dimensions of environment, nutrition and social inclusion. For example, ADM has not set a time-bound target for improving affordable nutrition, despite this topic being identified as a priority in the company’s own materiality assessment.

Governance and accountability for sustainable development
The company assigns responsibility and accountability for its sustainable development strategy to its highest governance body. The company discloses that its governance structure includes a board-level Sustainability Committee, which oversees the sustainable development strategy as well as matters related to corporate responsibility. The company has an opportunity to improve its performance by linking board-level remuneration to the achievement of sustainability objectives.

Stakeholder engagement
ADM only discloses undertaking stakeholder engagement as part of its materiality process. The company could improve its performance by disclosing a separate stakeholder engagement process that covers topics across the three benchmark dimensions. Disclosure on this separate stakeholder engagement process should cover how relevant stakeholders are identified, the channels through which stakeholders are engaged and how the outcomes of stakeholder engagement are integrated into the company’s sustainability strategy.

Scope 1 and 2 greenhouse gas emissions
The company has a time-bound target to reduce its absolute scope 1 and 2 GHG emissions by 25% by 2035 (compared to a 2019 baseline of 17.3 million metrics tons of GHG). In 2020, the company reported progress against this target, disclosing that it had reduced absolute scope 1 and 2 GHG emissions by 8.8%. The company can improve its performance by disclosing whether its GHG reduction target is aligned with a 1.5-degree scenario.

Scope 3 greenhouse gas emissions
In 2020, the company disclosed that it would set a scope 3 emissions reduction target in 2021. To improve its performance on this indicator in the future, the company has an opportunity to set a time-bound emissions reduction target that covers all of its scope 3 emissions and is aligned with a 1.5-degree scenario.

Protection of terrestrial natural ecosystems
The company has a time-bound target to eliminate deforestation from its supply chain by 2030. ADM anticipates that it will be able to disclose the volumes of soya, sourced from Brazil, that are deforestation and conversion-free (DCF) by 2022. Currently the company discloses the volumes of RSPO-certified palm oil sourced from Europe and North America. For other geographies the company is working to improve monitoring of palm oil supplier performance against ADM’s No Deforestation, No Peat and No Exploitation policy.

Soil health and agrobiodiversity
The company has a target to enrol the number of wheat acres equivalent to 10% of US wheat-processing volume into sustainable agriculture projects by 2022. In 2020, the company had enrolled the number of wheat acres equivalent to 8.4% of US wheat-processing volume. Practices covered by ADM’s definition of sustainable agriculture include covering soil, minimising soil disturbance and increasing crop diversity. The company could improve its performance on this indicator by setting targets to increase the proportion of crops, such as corn and soy, which are produced using sustainable practices that improve soil health.

Fertiliser and pesticide use
The company has a target to enrol the number of wheat acres equivalent to 10% of US wheat-processing volume into sustainable agriculture projects by 2022. These sustainable agriculture projects include managing the use of nutrients (i.e. fertilisers). In 2020 the company had enrolled the number of wheat acres equivalent to 8.4% of US wheat-processing volume. The company could improve its performance on this indicator by setting targets on both fertiliser and pesticide use.

Water use
The company has a target to reduce water consumption by 10% per ton of product produced at its largest sites by 2035 (compared to a 2019 baseline of 2.27 cubic metres per ton). ADM report progress against this target. In 2020, the company disclosed that it had reduced the water consumption per ton of product produced by 1.9% compared to 2019. In addition, as part of the Ceres/WWF AgWater Challenge, the company discloses its water-stress mapping for its supply chain and operations. ADM could improve its performance by disclosing the proportion of total water withdrawn by the company that originates from water-stressed areas.

Accessibility and affordability of healthy foods
Given its role in the agricultural commodities sector, ADM does not have a direct impact on nutrition issues such as the accessibility and affordability of healthy foods. However, the company does disclose that it supports efforts to end hunger and malnutrition and improve access to nutritious food. Going forward, the company has an opportunity to undertake strategic activities that contribute to increasing the production, quality and/or variety of healthy and nutritious foods.

Workforce nutrition
The company does not disclose sufficient evidence of having any workforce nutrition programmes.

Food safety
The company discloses that a proportion of its operations comply with hazard analysis and critical control points (HACCP) or are certified by the Global Food Safety Initiative (GFSI). To improve performance, the company should ensure that 100% of its operations are certified to a GFSI-recognised food safety scheme/certification programme.

Child labour
The company commits to prohibiting child labour in its own operations and requires its suppliers to adhere to the same standard. The company could improve its performance by developing an age-verification system as well as a policy requiring suppliers to do the same.

Forced labour
The company prohibits forced labour in its operations and requires its suppliers to adhere to the same standard. For its own operations, the company commits to respecting workers’ right to collective bargaining and not to interfere with workers seeking to exercise this right, but it has an opportunity to disclose a commitment that requires its suppliers to adhere to the same standards. Currently, upholding the principle of collective bargaining is expected, rather than required, of ADM suppliers.

Living wage
The company does not disclose that it pays its workers a living wage or requires its suppliers to do the same. Neither has it set targets to do so in the future.

Health and safety of vulnerable groups
The company does not disclose that it specifically recognises the health and safety risks to vulnerable groups, such as migrant and temporary labourers, women and young farmers.

Farmer and fisher productivity and resilience
The company has a commitment to support the resilience, productivity and access to markets for farmers, which it does through its sustainable agriculture projects. The company discloses the impact of these projects. For example, soya bean yields per hectare have grown by 50% in the two decades since ADM began working with small-scale farmers in the Indian states of Maharashtra and Karnataka.

Land rights
While the company commits to recognising and respecting the legitimate tenure rights related to the ownership and use of land of local communities, it has an opportunity to disclose a commitment that requires the same of its suppliers. Currently, respecting legitimate tenure rights is expected, rather than required, of ADM suppliers.

The company has a commitment to respect human rights and the ILO core labour rights, and it expects its supply chain partners to commit to respecting the ILO core labour rights. It further assesses and takes action to address its human rights risks in its own operations and supply chain. However, while the company discloses the process it uses to identify human rights risks in its supply chain, it does not disclose the process it uses for its own operations. ADM does provide a grievance mechanism for stakeholders whose human rights have been affected, but does not disclose more than one example of how it engages with affected stakeholders.

The company is committed to respecting the health and safety of workers and discloses some quantitative health and safety information in its 2020 Corporate Sustainability Report, but could improve by disclosing the main types of work-related injuries that occur, as well as the number and rate of high-consequence work-related injuries. Moreover, while the company has a time-bound target on gender equality, it has not publicly committed to gender equality and women’s empowerment. The company provides limited public information regarding paying a living wage or regulating working hours.

The company is committed to protecting personal data and discloses that it will not share personal data without a valid reason. However, the company does not disclose what personal information it collects and the right to access data is only available when specific regulations apply. Furthermore, while the company prohibits bribery and corruption it does not include anti-bribery and anti-corruption clauses in its contracts with suppliers. ADM does have a publicly available global tax strategy and a policy setting out its approach to lobbying and political engagement.