Shareholders Press PepsiCo to Take Action to Protect Bees and Other Pollinators
May 5, 2015: Shareholders of PepsiCo* (“Pepsi”), concerned about the sharp declines in the number of bees and other important pollinators, are urging the Company to assess the financial risks it faces due to the decline of critical pollinators across its supply chains. The investors will gather at Pepsi’s annual meeting on May 6th, to vote on a shareholder proposal urging the Company report on its strategies to reduce high-risk pesticides linked to this concerning decline.
The proposal, filed by Trillium Asset Management, the Sustainability Group of Loring, Wolcott & Coolidge and Green Century Capital Management was prompted by growing concern about the sharp declines in the number of bees and other important pollinators, which evidence suggests may be linked to neonicotinoid pesticides— or neonics.
Pepsi procures a number of crops, including apples, and oranges, that are dependent on pollinators; therefore, the proponents contend it faces potentially significant risks if the cost of pollination services rise. Also, the Company is a large purchaser of corn, wheat, oats and other commodity crops typically pre-treated with neonics. This puts Pepsi’s supply chain practices at risk of potentially endangering the health of pollinators.
“Pepsi argues that the information investors seek is not needed. We disagree,” said Susan Baker, co-lead filer of the proposal. “If the decline in pollinators continues, the price for such services will increase, raising costs throughout the supply chain. In addition, it may become increasingly difficult or expensive to procure certain crops and products.”
“As a major purchaser of crops grown from seeds pre-treated with neonics, Pepsi is part of the problem. But it also has an opportunity to make a positive impact,’” said Larisa Ruoff of the Sustainability Group of Loring, Wolcott & Coolidge, co-lead filer of the proposal. “Seeds not treated with neonicotinoids are available. The growth of these alternatives in the marketplace will depend on influential companies like Pepsi supporting sustainable agriculture practices,” she continued.
The shareholder proposal further notes that “bee-pollinated commodities account for $20 billion in annual United States agricultural production and $217 billion worldwide,” according to the United States Department of Agriculture (USDA), and that the rapid decline in pollinators poses urgent risks to our global food system.
In response to increasing scientific evidence that has identified neonics as causing harm to honey bees and wild pollinators, a number of large companies such as Lowe’s, Home Depot and Whole Foods have made commitments to label, and/or reduce the use and sale of this class of pesticide in their supply chains.
“Industry peers are taking action to pro-actively curb these high-risk neonics in their supply chains,” said from Libby O’Connell, Shareholder Advocacy Associate, for Green Century Capital Management, Inc., co-filer of the proposal. “Now it’s Pepsi’s turn to respond, and tell shareholders how it is protecting the health of vital pollinators like bees and butterflies that our entire food system depends on.”
Contact: Randy Rice, Trillium Asset Management, firstname.lastname@example.org, (617) 515-6889
*In addition to engaging with our core portfolio companies, Trillium also conducts advocacy on selected companies (identified with an “*”) that are not in our core portfolios but are held as legacy positions in client portfolios. These are companies that may not meet our minimum social and environmental criteria, but that we still seek to improve. The information provided in this material should not be considered a recommendation to buy or sell any of the securities mentioned. It should not be assumed that investments in such securities have been or will be profitable.
Important Disclosure: The views expressed are those of the authors and Trillium Asset Management, LLC as of the date referenced and are subject to change at any time based on market or other conditions. These views are not intended to be a forecast of future events or a guarantee of future results. These views may not be relied upon as investment advice. The information provided in this material should not be considered a recommendation to buy or sell any of the securities mentioned. It should not be assumed that investments in such securities have been or will be profitable. To the extent specific securities are mentioned, they have been selected by the authors on an objective basis to illustrate views expressed in the commentary and do not represent all of the securities purchased, sold or recommended for advisory clients. The information contained herein has been prepared from sources believed reliable but is not guaranteed by us as to its timeliness or accuracy, and is not a complete summary or statement of all available data. This piece is for informational purposes and should not be construed as a research report.