Smuckers – Pesticide Use (2017)
Outcome: Withdrawn after management agreed to provide disclosures regarding pesticide use management in its supply chain beginning in September 2017 and to acknowledge risks associated with declining pollinator health.
Whereas: Companies with exposure to pesticide uses and practices through their supply chains that pose risks to public health and pollinator communities may face a number of business risks, including potential reputational damage due to growing consumer interest in how food is grown and its impacts on health and the environment.
Numerous studies document the correlation between pesticide exposure and increased cancer risk. According to the U.S. President’s Cancer Panel, approximately 40 chemicals found in EPA-registered pesticides are classified as “known, probable, or possible” carcinogens.
Additionally, low level exposure to chlorpyrifos, an organophosphate pesticide used widely on fruits and vegetables, is a growing public concern given its linkage to adverse effects on children’s brain development.
Another class of pesticide, neonicotinoids, have been implicated as a key contributor to pollinator decline. With crops reliant on pollinators valued between $235 and $577 billion, decreases in these populations pose a threat to our ecosystems, economy, and global food system.
According to a Consumer Reports survey, 86 percent of those surveyed believe it is critical to reduce pesticide exposure.
Regulatory actions are increasing, creating new restrictions to which companies will need to adapt. For example, three states have proposed restrictions on neonicotinoids, and bills to restrict neonicotinoids were introduced in over ten states during the 2015-2016 legislative session. Further, the Minnesota Department of Agriculture is seeking legislative authority to regulate seeds treated with pesticides, and in 2016 California regulators proposed rules banning the spraying of pesticides within a quarter mile of schools or daycare facilities.
In light of these consumer demand and regulatory trends, companies have committed to tracking and reducing pesticide use, potentially leaving laggards with a competitive disadvantage.
• Unilever discloses amounts of pesticides avoided by farmers using Integrated Pest Management (IPM) practices;
• General Mills is working to disseminate guidance to growers on how to protect and minimize the impact of neonicotinoids and other pesticides on pollinators;
• Sysco’s suppliers reported avoiding 4.6 million pounds of pesticides in the 2013 growing season by utilizing IPM principles. Sysco’s IPM program also includes standards that protect pollinators.
The J.M. Smucker Company, in contrast, does not provide sufficient information including goals, metrics, or progress to determine how it is effectively managing pesticide use and the associated business risks. The company’s 2016 Corporate Responsibility Report provides specific details on a range of sustainability-related issues, but is notably silent on pesticides.
Resolved: Shareholders request that the Board publicly report on company strategies and/or policy options to protect public health and pollinators through reduced pesticide usage in the J.M. Smucker Company’s supply chain.
Supporting Statement: While the company has the discretion to determine its precise content, proponents recommend that the requested report include:
• Quantitative metrics tracking the amount and/or classes of pesticides avoided, reported annually;
• Overall goals to reduce pesticide use and/or toxicity; and
• Measures including technical assistance and incentives provided to growers to avoid or minimize the use of pesticides.