Industrial Agriculture
Only eight proposals have emerged so far in 2018 on industrial agriculture issues—three on familiar concerns about antibiotics, another three on pesticides, and two on animal products.
Antibiotics
The resolutions are slightly different. At Denny’s, a new recipient, As You Sow requests the company to “adopt an enterprise-wide policy to phase out the use of medically important antibiotics for disease prevention purposes in its meat and poultry supply chain.”
At McDonald’s, the resubmitted proposal is more focused, asking management to “update the 2015 McDonald’s Global Vision for Antimicrobial Stewardship in Food Animals by setting global sourcing targets with timelines for pork and beef raised without the use of medically-important antibiotics for disease prevention purposes.” The company has challenged the resolution at the SEC, arguing it is false and misleading and too vague. This proposal is like two previous resolutions that earned 31 percent in 2017 and 26.3 percent in 2016. The company is ending the use of antibiotics for chickens in its supply chain but has not extended the prohibition to beef and pork.
At Sanderson Farms, the resubmission asks the company to “adopt an enterprise-wide policy to phase out the use of medically important antibiotics for disease prevention in its supply chain. Shareholders further request that the company publish timetables and measures for implementing this policy. It received 31.5 percent support in 2017 which jumped to 43 percent in an early 2018 vote. The company disputes the science connecting agricultural antibiotic use with antibiotic resistance to human drugs.
Advocacy Position: Investors' Appetite Grows for Antibiotic Reduction
Pesticides
All three proposals raise familiar issues and just one remains pending, at Dr Pepper Snapple. Green Century wants a “report on company strategies and/or policy options to protect public health and pollinators through reduced pesticide usage in Dr Pepper Snapple Group’s supply chain.” The proposal is a resubmission that earned 31.6 percent in 2017. The resolution continues efforts by ICCR members to address how pesticides affect pollinators, including but not limited to bees. Earlier, a resolution on the issue at PepsiCo in 2016 earned 8.8 percent; others have been withdrawn after agreements in which companies agreed to act.
Proponents have withdrawn the other two pesticide proposals after company challenges:
- As You Sow withdrew after discussions with PepsiCo about pesticides in its supply chain, which it says will continue. But the company also had argued at the SEC that its proposal could be excluded because it concerned ordinary business since Pepsi is being sued about not disclosing that Quaker Oats contain glyphosate that was applied shortly before harvest, the proposal’s subject. The resolved clause asked for a report “discussing the Company’s options for adoption of policies…to prevent or minimize environmental and public health harms from glyphosate in the company’s supply chain.”
- Trillium Asset Management withdrew at Tractor Supply, having asked it to “conduct a risk assessment of Tractor Supply’s environmental protection policies and practices to determine whether the Company’s current practices regarding the sale of neonicotinoid-containing products are in the best interests of the company, its consumers and its shareholders, and to recommend any changes to policy or practice the Committee deems to be appropriate”—and to include the results in the next sustainability report.
The company argued at the SEC that the resolution concerned ordinary business, invoking SLB 14I, contending the proposal was too specific about products, that neonicotinoids make up a tiny fraction of its business and that the resolution also is an attempt to micromanage. The proponents withdrew before the SEC responded.
Animal Products
On February 9, investors gave 9.4 percent support to a proposal to Luby’s from the Humane Society of the United States that asked it to report within six months and
disclose risks the company may face from animal welfare issues in its supply chain, and how it’s mitigating those risks (“animal welfare disclosure”)….This should…include: animal abuse principles used to frame the disclosure; metrics used to track and measure Luby’s impact on animal welfare; and actual and/or potential risks-including, but not limited to those regarding its suppliers’ methods of breeding, raising and processing poultry.
A similar proposal last year at the chicken restaurant chain El Pollo Loco earned 8.4 percent.
An individual proponent, Patricia Silver, wants TJX “to develop and disclose a new universal and comprehensive animal welfare policy applying to all of our stores, merchandise and suppliers.” The company has challenged the proposal at the SEC, arguing it can be excluded on ordinary business grounds since it concerns the sale of particular products—fur. The resolved clause does not mention fur, but the body of the proposal notes the company sells both wool and fur products and takes issue with the lack of a policy on animal welfare issues in the TJX supply chain and in its product selection, which TJX asserts are ordinary business.
At VF, the issue for proponent People for the Ethical Treatment of Animals (PETA) is using any animal products in apparel. The resolution says:
while VF Corporation has performed innovative work in the research and development of down alternatives and leads the industry in efforts to reduce animal suffering, it continues to sell animal-derived materials, which are inherently cruel; therefore, the Board is strongly encouraged to phase out all animal-derived materials.
The proposal explains in its body that it seeks the elimination of all animal-derived products, including down, wool and leather—a higher hurdle than PETA’s usual request to end fur sales.
