Dr Pepper Snapple Group Pesticide Reduction

• Company: Dr Pepper Snapple Group
• Subject: Pesticides
• Year: 2017
• Sector: Food Retail or Processing
• Lead Filer: Green Century Capital Management
• Outcome: Vote: 31.6%

Reduce Pesticide Use

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.

Specific practices that are raising public health concerns include the application of glyphosate to crops before harvesting, a protocol that may result in increased pesticide residues on crops and ingestion by people. In 2016, the Food and Drug Administration announced plans to begin testing for glyphosate residues.

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.

Moreover, according to a Consumers 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, Minnesota's governor enacted restrictions on neonicotinoids in 2016 and the state's Department of Agriculture is seeking legislative authority to regulate seeds treated with pesticides. Further, in 2016, California regulators proposed rules banning the spraying of pesticides within a quarter mile of schools or daycare facilities.

In light of these trends, several 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;
• Whole Foods has committed to reduce pesticide use and its Responsibly Grown Pesticide Policy "targets pesticides which pose the greatest risk to consumers [and] pollinators;"
• Sysco's IPM Program reduced pesticide use by nearly 900,000 pounds over three years. Sysco also tracks pesticides avoided that affect pollinators.

Dr Pepper Snapple Group, 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 2015 Sustainability Update report We Do Good Things With Flavor 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 Dr Pepper Snapple Group'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 of pesticides used and avoided, along with the class of pesticides used, 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.