From As You Sow: Using Shareholder Pressure to Get Big Brands to Clean up Plastic Pollution
Concern about the negative impacts of plastic pollution has exploded in recent years as better data has surfaced about the pervasiveness of plastic waste and our inability to control it – elevating concerns among the public, media, government, and investors.
As You Sow uses shareholder advocacy to press publicly-traded companies to improve their social and environmental practices and policies. Shareholder advocacy involves using their status to align with other shareholders and engage corporate management as concerned investors. Shareholders can submit 500-word resolutions that are voted on at annual meetings. While usually advisory in nature, even modest vote results on these proposals can have enormous impact.
We have worked for two decades with other activist investors to promote waste reduction and increased recycling of many types of packaging waste. Originally, we focused on pressing large beverage companies to take steps to increase recycling rates for bottles and cans. We gradually expanded engagement to the fast food and consumer goods sectors and to the rapidly growing problem of plastic pollution.
Here are some of our recent successes with major companies on plastic pollution through our engagement:
Starbucks Corp. agreed in January to move away from single use beverage cups and to transition customers and employees to accept reusable and refillable alternatives for its beverages. If successful, this could revolutionize the delivery of take out beverages.
McDonald’s Corp. stopped using harmful polystyrene (Styrofoam) beverage cups and packaging globally, taking 1 billion foam cups off the market!
YUM! Brands agreed to phase out polystyrene packaging globally by 2022.
Dunkin’ Donuts agreed on a timetable to phase out foam cups, which will take another billion cups off the market.
Colgate-Palmolive, KraftHeinz, Mondelez International, Procter & Gamble, and Unilever all agreed to make their plastic packaging more or totally recyclable.
As You Sow also does original research on plastic pollution. We recently released Waste & Opportunity 2020: Searching for Corporate Leadership, a report analyzing the actions, or inactions, of 50 of the largest U.S. consumer-facing companies to reduce plastic pollution.
The report concluded that, overall, companies have been far too slow in adopting responsive actions and promoting reusability, recyclability, or compostability in their packaging. And they have failed to shift away from wasteful packaging, toward circular models that prioritize absolute reduction. We were unable to identify leadership companies, but rather found scattered leadership actions.
Of the 50 companies in the beverage, quick-service restaurant, consumer packaged goods, and retail sectors, the highest grade was a B- for Unilever. Twelve companies received C grades, 22 received D grades, and 15 received F grades. The six lowest ranked companies by size of revenue were Walmart, Kroger, PepsiCo, Tyson Foods, Kraft Heinz, and Mondelēz International. The high number of poor and failing grades reflects a lack of basic goal setting, strategy, and planning, which must be developed to effectively address the plastic pollution crisis.
On the plus side, it was encouraging to see:
Development of circular shopping platforms, Loop and Algramo, that offer hope for scalable delivery of products in reusable packaging, in stores and via home delivery.
Nearly half the companies surveyed pledged that all their packaging will be reusable, recyclable, or compostable by 2025.
Coca-Cola Co. plans to ramp up refillable bottles to 50 percent of sales in Brazil by 2030.
Companies are starting to disclose unit sales, which is required to be able to accurately measure future reductions in plastic packaging use.
Perhaps the single most impactful action taken by a major consumer goods company to date is Unilever’s pledge to cut plastic packaging by 100,000 tons, which forces the company to innovate by designing alternative delivery systems, such as low- to zero-waste packaging. The company is developing products like shampoo in bar form rather than bottles, toothpaste in tablets rather than a tube, and deodorant on a cardboard rather than plastic stick.
Investor concern about plastic pollution is growing rapidly. To be more effective, As You Sow founded the Plastic Solutions Investor Alliance, an international coalition of investors engaging consumer goods companies on plastic waste and pollution. The group has 48 investors with a combined $2.3 trillion in assets. They have signed a declaration citing plastic pollution as a clear corporate brand risk and pledged to interact with leading companies to find solutions through new corporate commitments, programs, and policies. We are engaging large consumer brands to:
make plastic packaging recyclable
disclose annual plastic packaging use
set plastic use reduction goals
develop alternatives to plastic packaging where feasible
help fund collection and recycling in markets where they operate
and support new laws aimed at cutting plastic waste and broadening producer responsibility.
We believe the confluence of public concern, global policy changes, and advocacy by a broad range of stakeholders has the potential to dramatically reduce use of wasteful single use plastic, curb millions of tons of plastic waste from entering oceans, and transform consumer behavior to adopt a circular path for plastic products and packaging.
Conrad MacKerron is Senior Vice President at As You Sow.
