Trillium News

Smucker’s Responds to Shareholder Concerns Regarding Climate-Related Risks to its Folgers™ Coffee Brand and to Farmers in its Supply Chain

August 7, 2012 – BETHESDA, MD and BOSTON, MA:
In recognition of Smucker’s [NYSE: SJM] positive first steps to respond to climate-related risks, Trillium Asset Management, LLC (Trillium) and Calvert Investment Management, Inc. (Calvert) announced today that they have formally withdrawn a shareholder proposal which called on the company to disclose climate-related risks to the Folgers™ Coffee and other brands. These brands currently represent over 40 percent of Smucker’s overall revenues and a significant portion of the company’s recent growth.
The 2012 Trillium/Calvert shareholder proposal specifically requested that within six months of the company’s 2012 annual meeting, it provide a report establishing quantitative goals for quantities of certified coffee purchases and a method for evaluating the success of the plan in addressing the challenges of climate change to the company and the farmers and ecosystems in its coffee supply chain.
A variation of this proposal was first filed in the spring of 2011. That proposal, also filed by Trillium and Calvert, asked the company to provide greater disclosure on sustainability issues facing its coffee business. The 2011 proposal received 30% of shareholder votes.
The withdrawal of the 2012 shareholder proposal recognizes new initiatives that are outlined in Smucker’s 2012 corporate responsibility report. Those initiatives, which respond to some of Trillium’s and Calvert’s concerns, include:
• A goal for certified coffee purchases to reach 10 percent of its total retail purchases by 2016.
• A partnership with the Hanns R. Neumann Stiftung Foundation to focus on agronomy training, organizational development, and climate change adaptation strategies in order to improve the farming conditions, yields, and incomes of small-scale coffee farming families.
• A partnership with World Coffee Research with a focus on the science of coffee in order to develop hybrid varieties using classic breeding techniques.
In response to the new initiatives, Trillium’s Vice President, Jonas Kron, said, “We believe the company has begun to recognize its responsibility to address the climate change risk to its Folgers™ coffee and other brands, and accordingly we have withdrawn our proposal. Smucker’s actions, however, represent only a first step. The company must do more to address investor concerns through greater disclosure, performance improvements, and accountability mechanisms. The prosperity of the people and ecosystems in the company supply chain, which provide a reliable supply of green coffee, as well as its own financial performance depend on it.”
Calvert’s Senior Sustainability Analyst, Rebecca Henson, added: “Climate change poses clear challenges to coffee plants and production. While Trillium and Calvert appreciate the company’s recent commitments, we have not found a clearly articulated business case for why the company has adopted its plan and why it, in particular, is the best way to proceed. Given that climate change is a material issue for the company—it is a risk factor discussed in its 2011 and 2012 10-K—we believe the company must provide shareholders with this information. It is also necessary for the company to provide further information about board and senior executive oversight of the plan.”
As long-term investors concerned with the company’s sustainability, Trillium and Calvert would like Smucker’s to:
• Provide additional information about the company’s goal for purchasing certified coffee, including how it selected that goal and how it can make continuous performance improvements and increase that target so it can have a greater impact and further reduce risk.
• Provide additional disclosure regarding suppliers, industry organizations, outside experts, and non-government organizations that the company is working with; and the nature of that work.
• Clarify the company’s commitment for certified coffee purchases. Specifically, the company should address questions about the commitment of its foodservice coffee business, which was recently purchased from Sara Lee. In January 2011, Sara Lee committed to have “more than 20% of its entire annual coffee volume certified sustainable.” Will Smucker’s maintain that 20% goal for the foodservice coffee business?
• Provide more detail on the nature of the company’s financial support for and partnerships with TechnoServe, Neumann Foundation and World Coffee Research. This information will help stakeholders understand whether these new initiatives are material commitments that will have real impacts for the ecosystems and people in the company’s supply chain as well as providing financial benefits to the company.
• Perhaps most importantly, the company must articulate how these initiatives are beneficial, not only to some of the ecosystems and communities in its supply chain, but also how they are linked to the long-term financial prosperity of the company.
Because Smucker’s 2012 Corporate Responsibility Report was issued after the proxy, the shareholder proposal remains on the ballot. However, the effect of the withdrawal is that the shareholder proposal will not be introduced at the meeting, nor voted upon.



Trillium Asset Management, LLC is the oldest independent investment advisor devoted exclusively to sustainable and responsible investing. With over $1 billion in assets under management, Trillium has been managing equity and fixed income investments for high net worth individuals, foundations, endowments, religious institutions, and other nonprofits, since 1982. A leader in shareholder advocacy and public policy work, Trillium’s goal is to deliver both impact and performance to its investors.

Calvert Investment Management, Inc. is an investment management company serving institutional investors, retirement plans, financial intermediaries, and their clients. Many of Calvert’s investment strategies feature integrated corporate sustainability and responsibility research. Founded in 1976 and based in Bethesda, Maryland, Calvert Investments managed assets of approximately $11.9 billion as of July 23, 2012. For more information, visit
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