A variety of concerns ranging from animal welfare, the overuse of antibiotics and the pollution of community waterways from factory farms, to governance themes such as the lack of disclosure around lobbying activities and questions regarding diversity on its board, have prompted invesstors in Tyson Foods to file five separate shareholder resolutions for the company’s 2017 proxy ballot. The slew of proposals this year reflect what ICCR members view as poor performance on environmental, social and governance (ESG) issues.
The resolutions underscore concerns the investors have been raising with company management as far back as 2000 on risks related to labor, water pollution, animal welfare and governance practices, and what they perceive as a disappointing response from Tyson management.
Said ICCR’s Nadira Narine, “The risks presented in these resolutions are significant and impact a broad group of stakeholders. Shareholders want the companies they invest in to use their influence to minimize environmental and social risk, and to have adequate corporate governance mechanisms in place. Our members continue to call on Tyson to authentically engage its shareholders and other stakeholders to proactively address these important issues.”
The resolutions filed include:
1. Water Impacts of Business Operations: Sponsored by the American Baptist Home Mission Society (ABHMS), the resolution requests that Tyson adopt and implement a water stewardship policy designed to reduce the risks of water contamination at Tyson-owned facilities, facilities under contract to Tyson and Tyson suppliers. According to a report by Environment America, Tyson discharged over 20 million pounds of permitted toxic pollutants to waterways in 2014.
Said lead filer Michaele D. Birdsall of ABHMS, “Tyson has paid significant fines for its water impacts and faces an ongoing criminal investigation by the EPA for its release of toxic pollutants into waterways. Apart from serious violations of the human right to water of impacted communities these breeches represent clear legal and financial risks that should be of concern to all shareholders.”
2. Animal Welfare: Sponsored by the Humane Society of the United States, the resolution asks Tyson to disclose the risks endangering the company and investors from emerging animal welfare issues and the steps the company has in place to address them.
Said proponent Matthew Prescott, “Study after study finds animal cruelty right at the top of consumers’ concerns about food production. As Tyson’s competitors and largest customers make moves to proactively address the biggest animal welfare concerns, Tyson appears to have fallen behind—putting investors at risk.”
3. Board Diversity: Sponsored by Oxfam America, the resolution requests that Tyson develop a report on the steps it is taking to foster greater diversity on its board, including the inclusion of women and minority candidates.
Argues Oliver Gottfried of Oxfam, “There is ample evidence that greater board diversity leads to improved performance on a variety of measures including the health and welfare of workers and general sustainability, as well as a reduction in reputational and legal risk. Given that nearly two-thirds of Tyson’s workforce is comprised of people of color, yet only one person of color sits on their board, we believe the company needs to do a better job of more intentionally promoting diversity.”
4. Lobbying Disclosure: Sponsored by Mercy Investment Services, the resolution requests a report detailing policies and procedures governing Tyson’s direct or indirect lobbying activities and Tyson’s membership in, and payments to, tax-exempt organizations that write or endorse model legislation.
Said Mercy’s Sr. Valerie Heinonen, “Tyson spent $5.6 million on direct federal lobbying between 2013 and 2015, which doesn’t include additional lobbying at the state level to influence legislation. These expenditures have drawn considerable attention from the media because details around how they are deployed or which initiatives they are intended to support aren’t made available. These questions can easily be put to rest through full disclosure which is considered standard practice in good corporate governance.”
5. Plant-Based Eating: Sponsored by Green Century Capital Management, the resolution seeks to learn what steps the meat giant will take to address risks to the business from the increased prevalence of plant-based eating.
Said Shareholder Advocate Marissa LaFave of Green Century, “The demand for plant-based proteins is skyrocketing, and needs to be considered and accounted for in business planning. Failure to see around corners and adjust to changing demands places the company at a great disadvantage relative to its competitors in the food industry who are already innovating in this area.”
The investors will continue to hold ongoing discussions with the company on a variety of topics to encourage more sustainable, responsible meat production including efforts to eliminate the overuse of antibiotics and the implementation of health and safety codes that uphold the human rights of workers in processing plants.
As of now, the resolutions are set to appear on the 2017 company ballot, to be voted by all shareholders at the next annual meeting.