Hermes Investment Management, Genetic Modification (GM)
We have engaged with several players in the GM market. As well as seeking to address allegations of unethical and opaque marketing and overly aggressive sales methods, we have questioned companies on their long-term vision on GM and urged them to enhance their sustainability performance and reporting. The latter includes disclosure on risk management in order to improve customer perceptions, especially as some US states are considering following in the EU’s footsteps by introducing compulsory labelling of GM products.
One company reacted to investor questioning about its risk profile and risk management practices by beginning to publish an integrated report in 2014 to which we provided significant input. At another company, we addressed the responsible marketing, handling and distribution of a hazardous pesticide that is banned in several countries. We urged it to put in place a convincing life cycle risk assessment of its products, from conception and procurement to disposal. We also highlighted the importance of a clear commitment to develop products with lower toxicity and expressed our disappointment at its decision to avoid the GM crops debate in the EU, leaving the company’s reputation and its licence to operate damaged.
Due to the polarisation of the debate engagement on GM has been difficult. However, we will continue to push the companies involved for better marketing practices, improved risk management and better disclosure.