More than a quarter of votes cast at General Mills’ recent AGM backed a resolution seeking more information about how the maker of foods ranging from Cheerios and Chex Mix to Häagen-Dazs and Yoplait is progressing with efforts to cut the use of harmful chemicals.
The resolution, which was brought by shareholder advocacy group As You Sow, asks that General Mills disclose the reduction of pesticides achieved by adopting its regenerative agriculture practices.
‘Industrial agriculture’s reliance on conventional farming practices – including monocropping, tillage and substantial synthetic pesticide and fertilizer use – demonstrably harms the health of workers and nearby communities, pollinators, soil fertility and retention, the climate and water and air quality, among others,’ As You Sow writes alongside its proposal.
‘In contrast, regenerative agriculture, a set of farming practices including reduced tillage, crop rotation, cover cropping, natural pest management and the reduction of pesticide and synthetic fertilizer use, preserves topsoil and soil health while reducing impacts to humans and the environment.’
According to As You Sow, General Mills points to regenerative agriculture as its top pesticide-reduction strategy and sets a target of using those practices on 1 mn acres of farmland by 2030. ‘[But] the company does not disclose if or how it tracks, monitors or reports pesticide use reduction by its suppliers engaging in regenerative agriculture practices, representing an important blind spot for the company and raising the potential for claims of greenwashing against [it],’ the group writes.
It also argues that General Mills publicly discloses the amount of pesticides avoided each year by its organic farmers but does not report reduced use of the chemicals by its suppliers using regenerative agriculture practices, ‘leaving shareholders in the dark as to the effectiveness of these practices in reducing pesticide use.’ By contrast, As You Sow says, other major food companies are reporting outcomes from their efforts to cut the use of pesticides.
The proposal was backed by 28 percent of votes cast at the meeting, a level of support governance experts generally regard as significant even though it is less than a majority.
‘General Mills is falling behind its peers in reporting on pesticide reduction, which may negatively impact long-term shareholder value,’ says Danielle Fugere, president and chief counsel at As You Sow, in a statement on the vote. ‘The company should view this feedback from investors as an opportunity to alter its practices and become a leader in successful regenerative agriculture.’
Board opposition
General Mills’ board had urged shareholders to vote against the measure, writing in this year’s proxy statement that the company is an ‘industry leader in its support of, and investment in, regenerative farming.’
The board stated: ‘To date, we have more than 600,000 acres of farmland engaged in advancing regenerative agriculture practices, which represents more than 60 percent of the ambitious 1 mn-acre goal we committed to engaging by 2030. The company also regularly reports on progress toward that goal…
‘Transitioning from traditional to regenerative [agriculture] is complex and expensive for farmers, albeit with significant long-term benefits. Requiring [them] to specifically track pesticides would decrease [their] participation in regenerative agriculture practices by making it even more complex and costly. This would in turn reduce the company’s ability to continue its impressive momentum in driving adoption of this important method of farming.’
The board also argued that General Mills’ regenerative agriculture goals are broader than just reducing pesticides: ‘Focusing solely on pesticide tracking and reduction would significantly impact the overall benefits of our regenerative agriculture program. Increased soil health, carbon sequestration, increased water quality and conservation, insect and bird biodiversity and improved farm economics are some of the primary goals and benefits associated with our regenerative agriculture program.’
It added that the company already provides ‘significant disclosures’ on its regenerative agriculture and pesticide reduction initiatives.
A request for comment from the company was not returned immediately.
Ben Maiden
Ben Maiden is the editor-at-large of Governance Intelligence, an IR Media publication, having joined the company in December 2016. He is based in New York. Ben was previously managing editor of Compliance Reporter, covering regulatory and compliance...
