Smuckers – Coffee, Climate Change and Sustainable Sourcing (2012)

Outcome: Successfully withdrawn following the announcement of new initiatives that are outlined in Smucker’s 2012 corporate responsibility report.

Our company is one of the four largest coffee companies in the world. It provides industry leadership through brands such as Folgers not only in consumer expectations but also with regard to pricing.
The coffee business is critically important for our company by providing approximately 40% of our company’s revenue. It is equally important to the well-being of 25 million coffee farming families worldwide.
Climate change may present a number of important risks and opportunities for our company and these communities, as it impacts temperature, rainfall patterns, frequency of severe weather events, and disease vectors, among other effects, in the world’s coffee growing regions.
According to Kenya’s Coffee Research Foundation director of research, “We have seen climate change in intermittent rainfall patterns, extended drought and very high temperatures.” Furthermore, “Coffee operates within a very narrow temperature range of 19-25 degrees (Celsius). When you start getting temperatures above that, it affects photosynthesis and in some cases, trees wilt and dry up.” Peter Baker, CABI Bioscience coffee expert, stated, “I often call coffee a Goldilocks plant. It likes it not too hot, not too cold. It likes it not too wet, not too dry.”
Competitors in the coffee business – Nestlé, Kraft, and Sara Lee – are making public efforts to address coffee sustainability and to provide for a consistent and reliable supply chain of quality coffee. All three have made public commitments to specific goals or data disclosures—often including targets, timeframes, and investment levels– of sourcing coffee in a more sustainable fashion.
Resolved: Shareholders request that within six months of the 2012 annual meeting, the Company develop and publish, at reasonable cost and excluding proprietary and confidential information, an enhanced green coffee sustainability plan that goes beyond its 2011 plan and includes (1) quantitative goals for quantities of certified coffee purchases; (2) 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.
Supporting Statement: It is the Proponents’ intention that the enhanced green coffee sustainability plan provide investors with a reasonable level of detail about our company’s plan. Our company has not provided information about how much certified coffee it will purchase in terms of percentages or absolute amounts. We are not seeking to impose a specific goal, but seek a reasonable amount of disclosure. With respect to a method for evaluating the success of the plan, we believe our company should be able to provide its shareholders with some basic evidence that its plan is beneficial to the farming communities and ecosystems from which it sources coffee. While our company’s 2011 Corporate Responsibility report mentions the 2010 impact of TechnoServe on some farmers, there has not been any effort to discuss the beneficial impacts of Smucker’s green coffee sustainability plan on the environment, communities and/or our company.

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