Plastics: New in 2019 is a resolution from As You Sow about “nurdles.” It asks Chevron, DowDupont, ExxonMobil and Phillips 66 to produce annual report “on plastic pollution,” saying the report “should disclose trends in the amount of pellets, powder or granules released to the environment by the company annually, and concisely assess the effectiveness of the company’s policies and actions to reduce the volume of the company’s plastic materials contaminating the environment.”
The proposal notes each firm produces petrochemicals and says each makes “pre-production pellets, or nurdles, manufactured in polymer production plants.” But “spills and poor handling procedures” mean “billions of such plastic pellets are swept into waterways during production or transport annually and increasingly found on beaches and shorelines, adding to harmful levels of plastic pollution in the environment.” It describes the negative impacts this has on ocean species, directly and also by creating toxins marine species consume and pass on to humans. The proposal notes an anti-pollution pledge in December 2017 by the UN Environmental Assembly in Nairobi, supported by 200 countries and the U.S. Microbead-Free Waters Act of 2015 that prohibited some microplastics in cosmetics. It concludes there is “an urgent need” for more information about corporate efforts to curb spills of plastic pellets and remediation-related pollution and suggests the report “include discussion of pellet loss prevention, cleanup and containment.”
The proposal notes that the joint venture Chevron Phillips Chemical, owned by Chevron and Phillips 66, “is one of the world’s top producers of olefins and polyolefins,” that DowDupont “is one of the world’s largest plastics and resins manufacturers,” and that ExxonMobil “is one of the world’s largest chemical companies and a top producer of plastics such as polypropylene and polyethylene.” It points out that Operation Clean Sweep, supported by ExxonMobil, encourages best practices but “provides no public reporting.”
Energy Program Manager, As You Sow
Senior Vice President, As You Sow
FOSSIL FUEL INDUSTRY SEES PLASTIC AS SAVING GRACE, BUT DEMAND MAY PLUMMET
Plastics and other petrochemical goods are set to overtake the transport sector as the largest driver of global oil demand. Oil and chemical companies have invested a whopping $180 billion in new and projected plastics facilities, largely due to the fracking boom. But calls by governments and a variety of stakeholders to reduce single use plastics raise questions about whether projected demand for plastic products may slump, resulting in stranded petrochemical assets. Furthermore, extreme weather is creating new risks from flooding that exacerbate plastics pollution risks from petrochemical plants.
SEC action—Chevron has challenged the proposal at the SEC, arguing it cannot implement the proposal since it does not own a facility that makes plastic pellets and has only a partial stake that it does not control in a joint venture that does make them. Phillips 66 echoes this argument and also says the resolution is too vague and that As You Sow did not provide sufficient proof of its stock ownership. For its part, ExxonMobil contends the proposal seeks to micromanage it, and it therefore is ordinary business.
Recycling and sustainable packaging: At McCormick & Co., which has never had a proposal before, and Starbucks, a familiar target of recycling pressure, As You Sow is asking for a “report...on reducing the Company environmental impacts by stepping up the scale and pace of its sustainable packaging initiatives.” The McCormick proposal makes clear in its supporting statement and elsewhere that its primary concern is plastic packaging. A similar proposal at Starbucks earned 29 percent in 2018, while earlier resolutions to Starbucks about recycling goals earned around 10 percent in 2010 and 2011.
Although McCormick has identified sustainable packaging as a top priority and set goals to cut its packaging carbon footprint by one-quarter by 2025 and eliminate bisphenol A (BPA) by the end of 2018, the proposal says this aim “will likely increase the number of plastic items entering waste streams and the environment, since the company has replaced metal containers with plastics. Further, it says, the company’s expansion in emerging markets that have little recycling and waste management infrastructure is likely to increase plastic waste. As You Sow suggests the company should follow the example of peer firms with “reusable, recyclable, or compostable plastic packaging.”
At PepsiCo, As You Sow points out it withdrew a 2010 resolution asking for more recycling when the company pledged to work towards a 50-percent rate for beverage containers by 2018, noting that only 36 percent of containers are now recycled. It expresses concern about plastics pollution and inadequate reporting by Pepsi. The resolution seeks a report about “reducing the company’s environmental impact by describing actions taken and lessons learned to date in quest of the 50% beverage container recycling goal, and progress in developing revised plans for meeting its commitment to leadership actions to help increase U.S. container recycling rates.” The company has challenged the resolution at the SEC, arguing it is moot because recycling information is included in current policies and disclosures.
At Yum Brands, As You Sow also is taking aim at plastic pollution and Styrofoam waste, where the group last year achieved a major victory when McDonald’s agreed to phase out foam packaging. As You Sow and Yum Brands have a long history with recycling. Most recently, the group withdrew a 2016 proposal about on-site recycling after an SEC challenge and a new effort from the company on recycling. This year, the proposal asks for a report “detailing efforts to achieve environmental leadership through a comprehensive policy on sustainable packaging.”
Food: JLens is asking Amazon.com to report annual “on the environmental and social impacts of food waste generated from the company’s operations given the significant impact that food waste has on societal risk from climate change and hunger.” The resolution draws a connection between food waste, reducing GHG emissions and providing food redistribution options, noting the Sustainability Accounting Standards Board’s assessment that food waste is material to food distributors performance and its recommendation for reporting on metrics.
The company has challenged the proposal at the SEC, arguing it is not significantly related to its business and also concerns ordinary business. The latter argument succeeded in 2018, but another similar proposal earned 30.3 percent at Whole Foods before it was bought by Amazon.