PepsiCo Pesticides and Pollinators

• Company: PepsiCo
• Subject: Pesticides
• Year: 2015
• Sector: Food Retail or Processing
• Lead Filer: Trillium Asset Management; The Sustainability Group of Loring, Wolcott and Coolidge
• Co-Filer: Green Century Capital Management; Benedictine Sisters of Virginia; Benedictine Sisters of Mount St. Scholastica
• Outcome: Vote: 7.5%

Policy on Pesticide Pollution to Curtail Pollinator Decline

Whereas:

PepsiCo's Global Sustainable Agriculture Policy states it "supports sustainable agriculture practices that ... improve product value by maximizing the desired outputs ...while minimizing the required inputs and avoiding any negative impacts to the farm and surrounding lands." The Company's Sustainable Farming Initiative "enables PepsiCo to measure the environmental and local economic impacts associated with [its] agricultural supply chain." 

Yet, Pepsi is a major purchaser of corn, oats and potatoes -- crop types that are routinely pre-treated with neonicotinoids (‘neonics'), a class of insecticide linked to declines in pollinators and other beneficial organisms, and negative impacts to land and water (according to the International Union for Conservation of Nature and the United States Geological Survey.)

According to the United States Department of Agriculture, "bee-pollinated commodities account for $20 billion in annual United States agricultural production and $217 billion worldwide."  Multi-year double digit declines in pollinators in the United States and Europe pose risks to our food system.

Neonic use is growing rapidly. In 2011, 3.5 million pounds of neonics were applied to agricultural crops, a twofold increase in five years. Neonics account for roughly 25 percent of the global agrochemical market and are one of the most widely used insecticides. More than 90 percent of corn and 30-40 percent of soybeans planted in the United States is pre-treated with neonics. Their prevalence in agriculture, compounded by their ability to persist in soils and become mobile in waterways, further magnifies the risks. 

As their use has increased, so has scientific, regulatory and public concern. In December 2013, the European Union enacted a two year ban on three neonics. In June 2014, President Obama established a "Pollinator Health Task Force" charged with "understanding, preventing and recovering from pollinator losses." In July 2014, the United States Fish and Wildlife Service announced plans to restrict neonic use across the Wildlife Refuge System. 

Concern about the efficacy of neonics is growing. In October 2014, the Environmental Protection Agency reported that pre-treating soy seeds with neonics provided little or no benefit to production.

In light of these risks, companies are taking action:

• Under Whole Foods' Responsibly Grown Rating System, its "best" rating can only be achieved by suppliers that prohibit the use of four neonics.
• Home Depot is working with suppliers to phase out neonics on live goods.

Resolved:

Shareholders request that by September 1, 2015, the Board publish a report, at reasonable expense and omitting proprietary information that discusses the Company's options for policies, above and beyond legal compliance, to minimize impacts of neonics in its supply chain.

Supporting Statement:

We believe the report should include:

• An assessment of the supply chain, operational or reputational risks posed to the company by large-scale applications of neonics;
• Practices and measures, including technical assistance and incentives, provided to growers to reduce the harms of neonics to pollinators, and
• Quantitative metrics tracking the portion of supply chain crops pre-treated with neonics.