Circular Economy for Packaging

Resolution Text

WHEREAS: The growing plastic pollution and packaging waste crises pose increasing risks to Hormel Foods. Corporations could face an annual financial risk of approximately $100 billion should governments require them to cover the waste management costs of the packaging they produce.1Laws to this effect have significant momentum, having been recently been adopted in four U.S. states, with additional introduced at the state and federal level.2 The European Union has already enacted a $1 per kilogram tax on all non-recycled plastic packaging waste.3 Additionally, consumer demand for sustainable packaging is increasing.4

A circular economy for packaging, whereby packaging is designed for reuse or recycling and kept in the economy and out of the environment, plays an important role in a net-zero emissions world. Hormel states it is committed to emissions reductions,5 yet lacks commitments to ensure the circularity of its product packaging,6 even though its sold products and packaging contribute significantly to Scope 3 emissions at their end-of-life(“EOL”).7

More than 100 leading companies have committed to promoting a circular economy for packaging by acknowledging responsibility for the collection, sorting, and recycling of packaging at EOL, a policy known as Extended Producer Responsibility (“EPR”).8Absentlegally mandated EPR, companies must make voluntary contributions to improve the collection and recycling of their packaging.

The Recycling Partnership (“TRP”), the leading recycling organization, finds that $17 billion is needed to modernize and expand recycling infrastructure, and that doing so will save the equivalent of 710 million metric tons of CO2 over ten years.9 To improve plastic recycling infrastructure, TRP recommends that companies contribute at least $88 for every metric ton of plastic used.10

Competitors Kraft Heinz, Kellogg’s, Nestlé, Procter & Gamble and at least 25 other companies make voluntary contributions to expand recycling infrastructure, a critical step in embracing EPR.11 Hormel is not known to voluntarily contribute to help ensure its packaging never becomes waste.12

Hormel received an “F” grade on a recent report evaluating corporate packaging sustainability for its failure to financially support recycling infrastructure, endorse EPR, explore reuse opportunities, and make all packaging recyclable.13

Our Company could avoid regulatory, environmental, and competitive risks by adopting a circular economy approach to packaging and financially contributing to recycling infrastructure.

BE IT RESOLVED: Shareholders request that the Board issue a report, at reasonable expense and excluding proprietary information, describing opportunities for Hormel to support a circular economy for packaging.

SUPPORTING STATEMENT: The report should assess, at Board discretion:

The reputational, financial, and operational risks associated with failing to promote a circular economy for packaging;
The potential to increase packaging recyclability and transition to reusable packaging; and
Opportunities to develop policies or goals to endorse EPR and determine an appropriate level of voluntary financial contributions to recycling infrastructure.

1 https://www.pewtrusts.org/-/media/assets/2020/07/breakingtheplasticwave_report.pdf , p. 9

2 https://www.packworld.com/news/business-intelligence/article/22861621/extended-producer-responsibility-legislation-emerging-in-us

3 https://commission.europa.eu/strategy-and-policy/eu-budget/long-term-eu-budget/2021-2027/revenue/own-resources/plastics-own-resource_en 

4 https://www.shorr.com/resources/blog/the-2022-sustainable-packaging-consumer-report/ 

5 https://csr.hormelfoods.com/environment/greenhouse-gas-emissions/ 

6 https://www.asyousow.org/report-page/plastic-pollution-scorecard-2021/data-visualization 

7 https://ghgprotocol.org/scope-3-technical-calculation-guidance 

8 https://ellenmacarthurfoundation.org/extended-producer-responsibility/overview?_ga=2.194255722.613184023.1673367048-710010554.1662564816&_gl=1*18c5mjb*_ga*NzEwMDEwNTU0LjE2NjI1NjQ4MTY.*_ga_V32N675KJX*MTY3MzM2NzA0OC4xNC4wLjE2NzMzNjcwNDguNjAuMC4w 

9 https://recyclingpartnership.org/paying-it-forward/ 

10 https://plasticiq.org/ 

11 https://www.asyousow.org/report-page/plastic-pollution-scorecard-2021/ , p. 17

12 https://www.asyousow.org/report-page/plastic-pollution-scorecard-2021/data-visualization 

13 https://www.asyousow.org/report-page/plastic-pollution-scorecard-2021/ , p. 5