Addressing Global Deforestation

It is estimated that deforestation is responsible for 15 percent of global greenhouse gas emissions. Indonesia, despite its small size, has become the world’s third largest greenhouse gas emitter due to extensive ongoing deforestation, much of it illegal. In addition, deforestation has devastating impacts on biodiversity and indigenous and other communities that depend upon forests for their livelihoods. Before we can begin to address this problem, we need quality information.

Lowe's adopted a sustainable forestry policy in 2000, addressing its purchases of wood for sale in its home improvement stores. From 2006-2008, we filed shareholder proposals asking the company to report on these efforts. Ultimately, the company did publish a report, but then chose to remove it from its website. Without regular reporting, it is impossible for investors and other stakeholders to determine whether Lowe’s is living up to its stated commitments to protect forests. In 2012, we successfully convinced the company to work with us on a public report providing quantitative metrics and discussing its progress in implementing its wood-purchasing policy. In exchange, we were happy to withdraw our shareholder proposal. We commend the company for its commitment to transparency and for its continuing work to reduce its impact on threatened forests.

RR Donnelley is a leading financial printing firm with a strong commitment to providing its clients with a full range of sustainable paper choices. We applaud the company for these efforts, but continue to encourage them to publish more detailed information on the sustainability characteristics of the paper it purchases for its clients. In response to our 2012 shareholder proposal, which received a strong 26.7 percent vote, the company amended its public reporting regarding their purchases of sustainably sourced paper. In addition to a range of recycled papers, RR Donnelley offers its clients a range of “sustainable” paper, certified to one of three independent forestry certification schemes. Although we support these efforts, we believe that additional information would provide investors with a better understanding of the company’s actual impact on forests. We would like to understand what percentage of their paper purchases meet acceptable sustainable forestry standards, and how these trends change over time. We are also questioning whether it is possible for all of the company’s paper purchases – certified and uncertified – to meet certain baseline environmental standards.

After the company took several steps to address its exposure to illegal deforestation during 2012, we chose not to resubmit our shareholder proposal in 2013. Nonetheless, we look forward to continuing our dialogue with the company to build upon this important foundation.

We also continue to engage with Mondelēz International, formerly Kraft Foods, about its efforts to reduce the environmental footprint of its global purchases.

The composition of the Funds’ portfolios is subject to change. View the most current list of the Domini Social Equity Fund and Domini International Social Equity Fund's holdings.

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