PepsiCo shareholders urge company to act on bee supply chain concerns

20 May 2015

PepsiCo shareholders worried about the decline in the number of bees and other important pollinators such as butterflies urged the company to assess the financial risks this could cause its supply chains.

A shareholder proposal urging the company to report on its strategies to reduce the use of pesticides linked to declining bee populations failed this month, but gained 8 per cent of the vote.

The proposal was filed by several investment management funds including Green Century Capital Management, which said it 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 (neonics).”

Green Century said as Pepsi purchases crops such as apples, and oranges that are dependent on pollinators it could face significant risks if the cost of pollination services rise.

“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,” the investor added.

Susan Baker of Trillium, an asset management company that co-filed the proposal, added: “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.”

Another PepsiCo shareholder, the Sustainability Group of Loring, Wolcott & Coolidge, said seeds not treated with the controversial pesticides were available but their growth in the marketplace depended on the support of influential companies like Pepsi.

The failed shareholder proposal noted that bee-pollinated commodities accounted for $20 billion of agricultural production annually in the US and $217 billion worldwide. It said the rapid decline in pollinators poses urgent risks to the global food system.

The shareholders also noted that companies such as Lowe’s, Home Depot and Whole Foods were acting to curb the use of these pesticides in their supply chains. “Now it’s Pepsi’s turn to respond,” said Lucia von Reusner of Green Century Capital Management.

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