. In Depth - Sustainable Investment Management - Biotechnology Policy - Portfolio 21

Biotechnology Policy

Summary

Portfolio 21 supports sustainable agriculture, biodiversity and local farmers. We also support industrial applications of biotechnology and biomimicry (the process of modeling industrial systems on biological or ecological ones), and limited medical applications, so long as the principles of knowledge, transparency, containment and fairness are applied. Portfolio 21 does not accept companies involved in the promotion or development of genetic engineering for agricultural applications.

What is Biotechnology?

Biotechnology is a broad term that is used to describe a variety of applications and processes. Formally, biotechnology is "the industrial use of living organisms or their components to improve human health and food production." Genetic engineering, on the other hand, focuses on the manipulation of genetic material (the DNA) and results in what is termed a genetically modified organism (GMO). Genetic engineering is a type of biotechnology but not all biotechnology involves genetic modification. While the use of genetic engineering for agricultural purposes and food production is the most controversial and well known of the biotechnology applications, other applications that do not involve genetic alteration are common. For example, biotechnology includes the use of unmodified living organisms and their components, including enzymes, which are used to catalyze, or speed up, reactions. A specific application is the use of enzymes to reduce the time necessary for making cheese.

While humans have used biotechnology for thousands of years, for example through plant grafting and selective breeding, genetic engineering is a relatively new and rapidly developing technology that is raising public concern. There have been many studies of different applications and variations of genetic engineering and the results are both varied and conflicting. Some, for example, state that the use of genetically modified (GM) crops reduces the use of pesticides and increases yields while others state just the opposite. While concerns over genetic engineering are much broader than those illustrated in this example, the point is there is no conclusive evidence that all genetic engineering is "good," or that all genetic engineering is "bad." There are considerable claims of the benefits of this technology but there are also unknown risks to health and the environment. In order to protect the rights of the consumer to be informed on such issues, over 40 countries have developed regulations requiring labeling of GM products. These countries include Japan , South Korea , and Australia as well as the European Union. Additionally, in January 2000 more than 130 countries adopted a global treaty regulating trade of genetically modified (GM) products. In the European Union mandatory labeling requirements went into effect in April of 2004. Clearly, the issues of biotechnology and genetic engineering are controversial and deserve considerable attention.

For our analysis, we have divided biotechnology into four main applications. We have found this division to be helpful when deciding what types of biotechnology we believe are acceptable, or may be acceptable in the future, and what applications we cannot accept.

  • Agricultural Applications: Examples include the modification of crop seeds to become "Roundup ready" (better able to withstand the Roundup herbicide while surrounding weeds are killed), the modification of crop seeds to include Bt genes (making crops more resistant to pests), and the modification of crop seeds aimed at improving nutritional value.
  • Medical / Human Genetic Engineering: There are two main categories of human genetic engineering. The first is aimed at improving or preventing genetic disorders, and the second is non-medical applications, for example, manipulating the hair or eye color of a child.
  • Pharmaceutical Development and Production: Biotechnology, including genetic engineering in some cases, can be used to develop life saving and enhancing drugs and medical treatments such as gene therapy. Genentech, for example, makes a cystic fibrosis drug that is derived from genetic material.
  • Industrial Biotechnology: This is the use of living organisms or their components to facilitate industrial processes. One example is Novo Nordisk's use of enzymes in detergents. In this case, genetically modified organisms are used to produce enzymes that are then separated from the GMOs and added to the final product. As a result, the detergents contain no genetically modified organisms but have the advantages of improved performance (through the action of the enzymes).

Each of these applications has clear potential benefits; however, there are also risks. Unfortunately, defining the risks associated with biotechnology is limited by incomplete or insufficient information on these applications and the conflicting nature of the information that is available.

Problems with Genetic Engineering

There are many documented risks connected with genetic engineering, ranging from human health risks to environmental risks to cultural/community risks. Below are examples and explanations of a selection of these risks.

Risks to Wildlife / Biodiversity

A study released by Cornell University has shown that a strain of genetically modified corn ("Bt corn") can be lethal to caterpillars that develop into monarch butterflies. Monarch butterflies are considered to be a flagship species for conservation, and threat to this species represents a clear threat to biodiversity. The magnitude of these risks to non-target organisms (including beneficial insects) is largely unknown, as there have been no comprehensive studies to date.

Risks to organic crops

Genetic manipulation that places the Bt gene in crop seeds poses the risk of making Bt sprays, available for pest control by organic farmers, ineffective by hastening the evolution of resistant pests. Organic farmers fear that pests will adapt quickly to the Bt gene that has been inserted into some GMO crops and that the Bt-resistant pests will then be unaffected by Bt sprays, one of the most effective natural sprays available to organic farmers.

Risks to ecosystem integrity

As the two above risks indicates, the insertion of the Bt gene into crops has potentially significant consequences for wildlife and organic farming. Beyond these risks, however, is a third one associated with the release of Bt toxins from the roots of "Bt corn." Researchers at New York University recently found that the roots of "Bt corn" exude the active form of the Bt toxin, which has a long residual in the soil. It is currently unknown what affect the Bt toxin will have on soil processes and soil microorganisms.

Genetic Pollution

In this discussion genetic pollution refers to the spreading of artificially modified genes (some people refer to this is as genetic drift). The concern here is that GM crops could reproduce with unmodified plants thereby reducing diversity and contaminating previously unmodified crops. Additionally, genes can spread across different species and it has been shown in experiments that they can even spread from plants to animals. It is currently not clear how much genetic pollution will occur as a result of the use of GM seeds. US FDA guidelines requiring that a border of non-GM plants be in place around GM crops indicate that genetic pollution, or cross-pollination, is a real threat. If GM crops are not managed correctly there could be problems growing and certifying non-GM crops as well as problems associated with reduced genetic diversity.

Patenting and cloning of life forms

In his book "Remaking Eden: How Cloning and Beyond will Change the Human Family," Lee Silver envisions a society divided in two based on genetic makeup - the "GenRich" and the "Naturals.qu This theory, that people who can afford it will be able to give their children a competitive edge over other children, presents a horrifying picture of class inequities. If not properly managed, gene patents could be instrumental in promoting and institutionalizing social inequity.

Biopiracy

The process of patenting genetic material traditionally available to a community without allowing the community free use of the material, or providing any return to the community, has tremendous moral implications. Like the patenting and cloning of life forms mentioned above, biopiracy could be devastating to the fair and equitable distribution of resources, which is a necessity in the development of a sustainable society.

Increased chances of allergic reactions

Example—Some soybean seeds have been genetically modified to include a gene from Brazil nuts. This was done in order to improve the nutritional value of a protein supplement containing soy. As a result of this modification, however, individuals with Brazil nut allergies had reactions to the soy product. In some cases, Brazil nut allergies can trigger life-threatening reactions in susceptible people; thus, this modification presents no small risk. The "sharing" of genes from one organism to another has tremendous implications for individuals with allergies. Questions regarding the stability of genetically modified DNA segments are also relevant here and unfortunately are largely unanswered. Many people believe that the complexities and interdependencies of genes mean that removing one gene and replacing it with another will not necessarily result in the anticipated or desired trait due the fact that each gene is affected by the other genes in its DNA sequence. In short, genes do different things in different environments. This has consequences on individuals with allergies as GM crops may trigger unanticipated allergic reactions. Additionally, the modified soy product indicated no negative reactions when it was tested on animals. This study illustrates the difference between the reactions of laboratory animals and humans to GM food products, indicating a need for further study of this new technology before it is widely embraced.

Investment Guidelines

While biotechnology could potentially lead to increased nutritional value of food, better insect resistance of crops, successful medical treatments, preventive medicine or other desirables, there are still reliable and scientific reports that indicate problems and uncertainties associated with biotechnology. We believe that there has been insufficient research on this controversial technology and have thus adopted a cautionary approach in our policies.

In consideration of the risks associated with biotechnology, Portfolio 21 will invest according to the following guidelines.

We support sustainable agriculture, biodiversity and local farmers. We also support industrial applications of biotechnology and biomimicry (the process of modeling industrial systems on biological or ecological ones). Portfolio 21 does not accept companies involved in the promotion or development of genetic engineering for agricultural applications. In the case of companies not directly involved in genetic engineering, but that may sell products containing GMOs (such as natural foods companies), the Portfolio 21 management team will carefully evaluate the company, their activities, and their policies regarding biotechnology. In all cases, the following criteria are used to screen and evaluate companies for inclusion in Portfolio 21.

  • Knowledge—Thorough information must be available and risks must be understood and mitigated.
  • Transparency— Products containing GMOs must be clearly labeled and information readily available.
  • Fairness—There must be a fair and equitable allocation of profits to local communities from which genetic material was obtained (no biopiracy). The local laws must be adhered to and local cultures and resources must be protected. There must also be adherence to the Convention on Biological Diversity, particularly article 8J, and the ILO169 Convention on Indigenous Rights. In the case of medical applications, access must be available for all people regardless of socioeconomic status. Pricing must be fair.
  • Containment—Genetic and biological material must be managed and contained to high standards.

We do not accept:

  • Biopiracy
  • Non-transparency (no labeling), secrecy, non-disclosure
  • Human genetic engineering
  • Genetic engineering for agricultural applications

We will consider companies involved in the following activities as long as our sustainability criteria and the four principles of Knowledge, Transparency, Fairness and Containment are met:

  • Medical applications of biotechnology including preventive measures for illness or disease and human genetic engineering (of particular concern are the knowledge and fairness principles)
  • Pharmaceuticals using biotechnology (of particular concern are the knowledge and fairness principles)
  • Industrial biotechnology (of particular concern is containment)

Definitions

As many words associated with these issues are used in different contexts with different meanings, the following list of definitions is provided to clarify their use in this document.

Biomimicry

"Redesigning industrial systems on biological lines that change the nature of industrial processes and materials, enabling the constant reuses of materials in continuous closed cycles and often the elimination of toxicity." (Hawken, Paul et al. Natural Capitalism).

Biopiracy

The process of patenting genetic material traditionally available to a community (for example, traditional plant varieties) without allowing the community free use of the material or without providing any return to the community from which the genetic material originated. Often involves exploiting less developed areas and peoples.

Biotechnology

"Biotechnology is the industrial use of living organisms or their components to improve human health and food production." Source: Campbell, Neil A. et al, Biology 5th Edition.

Bt / Bacillus thuringiensis

A bacterium sprayed on crops as a natural pesticide. It is more benign than many synthetic pesticides and can be used by organic farmers.

Enzyme

"A class of proteins serving as catalysts, chemical agents that change the rate of the reaction, without being consumed by the reaction." Source: Campbell, Neil A. et al, Biology 5th Edition. An enzyme is not a living organism but a protein, that is, a building block of an organism. Enzymes cannot reproduce. Enzymes are frequently used for their catalytic properties but have a finite ability to change the rate of a reaction. Once the substrate is gone (the material being changed by the reaction), the reaction cannot continue and only byproducts of the reaction and decaying enzymes are left.

Genetic Engineering

Genetic engineering focuses on the manipulation (blocking, adding, or scrambling) of the genetic material (the DNA) inside the cells of living organisms to block or add desired traits. The resulting material is commonly referred to as a genetically modified organism, or GMO.

Genetic Pollution

Genetic pollution refers to the spreading of artificially modified genes. Sometimes this risk is called genetic drift, which is formally defined as the "change in gene frequency caused solely by chance." Due to the fact that the spreading of modified genes is not wholly by chance (modification of the genes is deliberate, as is their distribution), we feel the term genetic drift is not appropriate.