Commodities play an important role in the economic development of many developing countries. A vast majority of developing countries depend on commodities as a main source of revenue. However, the production of commodities, e.g. soy, coffee and cotton, is sometimes highly controversial from the viewpoint of sustainability issues like loss of biodiversity (e.g. through land conversion) and poor social-economic conditions.

Financial institutions involved in commodities may be able to influence the sustainability of production of commodities in a positive way. Considering the fact that sustainable production may be essential to safeguard production in the (mid) long term and may prove to be an important selling point on the world market, sustainable production may also be a “business case” for investors as well as for financial institutions financing production of or trade in commodities. Stimulating sustainable production of commodities is therefore also in the interest of shareholders.

The main task of the VBDO (Dutch Association of Investors for Sustainable Development) is to represent shareholders having an interest in the sustainability performance of the companies of which they hold shares. VBDO would like to investigate the practical means to stimulate sustainable production of commodities through shareholders interest, either by addressing and supporting investors directly investing in commodities (members of the VBDO, e.g. pension funds, banks), or by addressing and supporting financial institutions in which VBDO members invest. In this project the focus will be on banks financing the production of or trade in commodities.

To positively influence sustainable production of commodities through shareholders interest, VBDO would like to get insight in (1) the roles of financial institutions in the production and trade of commodities, (2) the business cases for these institutions to contribute to sustainable production and (3) the opportunities for financial institutions to enhance sustainable production.