Monsanto, the world’s largest producer of agricultural seeds, is under fire after scientists in the United States recently discovered what they believe to be a case of crop-eating insects developing resistance to genetically modified corn plants in the world. ‘business. Some researchers believe the discovery confirms concerns that biotech crops could spawn new species of pesticide-resistant superbugs. In environmental, social and governance (ESG) circles, reports of this phenomenon have sparked discussions about the importance of corporate social responsibility (CSR) policies for the environment.

It’s also not the first time Monsanto has come under fire for marketing products that could cause serious harm to the environment. For the past two decades, Monsanto has produced and marketed special seeds that can survive exposure to the company’s Roundup herbicide, a powerful chemical with a strong reputation as an effective weedkiller.

The problem is that these Roundup-resistant seeds made it easy for farmers to plant crops and then spray them with Monsanto pesticides that many farms abandoned other techniques. Now, according to a number of scientific reports, super weeds that are immune to Monsanto’s pesticides have spread to millions of acres in more than 20 Midwestern states in the United States.

In a recent article in the New York Times, Bill Freese, science policy analyst for the Center for Food Safety in Washington, explained that “the biotech industry is leading us into a more pesticide-dependent agriculture…we need to move in the opposite direction” . The challenge, however, is that GM crops present their own set of environmental risks.

These recent reports raise concerns about the negative environmental impacts of Monsanto’s operations. Another source of concern for socially responsible or ESG-conscious investors is that Monsanto has not adopted globally recognized best practices in environmental monitoring and reporting. The company has not adopted an ISO 14001 certified environmental management system and does not report its levels of greenhouse gas (GHG) or carbon dioxide (CO2) emissions.


Monsanto is already working on a new type of genetically modified crops designed to help farmers move away from heavy pesticide use. In 2010, the company generated over $10 billion in revenue and its products are extremely popular with many US-based farmers. More than 90% of soybeans grown in the United States and 80% of corn and cotton crops in the United States are grown with seed containing Monsanto technology. Yet the company faces serious long-term environmental risks and its reputation is suffering. In 2002, for example, Zambia, in the midst of a famine, rejected a shipment of donated maize for fear that the shipment contained genetically modified seeds.

In 2011, Monsanto was fined by the United States Environmental Protection Agency for contaminating the water supply near one of its rural facilities in the United States and was subject to investigated by the United States Securities and Exchange Commission for paying cash incentives to farmers who use its herbicides. Clearly, Monsanto is becoming fertile ground for discussing corporate environmental policies and responsibilities.

If the company wants to improve its environmental image, it can start by adopting globally recognized best practices in environmental management and reporting.

To view a recent “Governance Perspective” slideshow on corporate environmental issues, click here. (Data provided by GMIthe New York-based corporate governance research firm.)


[leaf photo courtesy of freedigitalphotos.net]

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