A busy proxy season for As You Sow’s Circular Economy program was highlighted by agreements with Hormel Foods to cut packaging use by 10 million pounds by 2030 and establish a new working group on Extended Producer Responsibility (EPR), and by YUM! Brands, the world’s largest restaurant company, to report on opportunities for switching to permanent reusable packaging.

A resolution at Hormel was withdrawn in exchange for several new commitments by the company to promote a circular economy for packaging, including new goals to reduce packaging use, new action on EPR, and a report to be published in September 2024 exploring ways to increase responsibility for ensuring sustainable collection of packaging at its end of life. The YUM! resolution was withdrawn in exchange for the same agreement As You Sow reached with YUM! competitor McDonald’s last year and follows the support of 36.9% of shareholders who voted on a similar resolution at YUM! in 2023.

In our 2024 shareholder season, running from July 2023 – June 2024, our Circular Economy team engaged approximately two dozen companies on several initiatives to reduce plastic packaging pollution, including transitioning to reusables, taking financial responsibility for packaging recycling at its end of life through EPR, and reducing plastic microfiber shedding from clothing. We also continued to challenge the petrochemical industry to prepare for a future with reduced production of plastic.

Seventeen of these engagements escalated to shareholder resolution filings in order to expand the conversation to all shareholders, board members, and employees. Shareholder resolutions are an important mechanism for shareholders to expand internal and external dialogue on issues of material importance to the company. While every shareholder has an opportunity to vote on resolutions, they are non-binding, meaning the company is not obligated to carry out the request even if a majority of shares support a proposal. However, it is in a company’s best interest to respond to significant shareholder concern and align action accordingly. To delineate shares owned and voted by management – which regularly oppose all shareholder resolutions – from shares voted by independent investors, As You Sow calculates and reports the independent shareholder vote. We are showing both the total vote and independent votes for our consumer goods companies below to demonstrate the significant support of independent shareholders in many cases.

In addition to the highlighted action with Hormel and Yum! Brands, below are additional 2024 Circular Economy engagements that most moved the needle toward using fewer resources, designing for longevity, and circulating plastics and packaging to a second use – not dumped into the environment.

Less & More Recyclable Packaging. The focus of these corporate engagements was on the design of packaging – using less packaging overall, especially plastic, and ensuring that any packaging used can be recycled.

Amazon – Fourth consecutive vote of authoritative shareholder support for sustainable packaging

28.6% of all shareholders and more than 33% of independent shareholders at Amazon supported our 2024 resolution asking the company to, in part, evaluate opportunities to reduce plastic and make all packaging recyclable, continuing the strong support demonstrated by shareholders on similar proposals put forward by As You Sow in 2023 , 2022 and 2021, which have resulted in plastic use decreases at the company.

Restaurant Brands International (RBI) – 40% independent shareholder support

Continuing a trend of high shareholder votes on sustainable packaging in 2023, 27.3% of all shares and more than 40% of independent shareholder votes supported As You Sow’s 2024 resolution with RBI asking the company to evaluate opportunities to set a plastic packaging reduction goal, an operating objective already held by most of the company’s quick-service restaurant peers.

Extended Producer Responsibility (EPR). Extended Producer Responsibility is a rapidly growing policy concept wherein producers – the manufacturers of products – are financially responsible for ensuring that their package and/or product is collected and recycled at its end of life, relieving local governments and taxpayers of this financial burden. The following engagements were focused on encouraging companies to adopt internal EPR policies and support EPR policies as they are introduced at state and national levels.

The Hershey Company – Majority independent shareholder support

Our 2024 resolution asked Hershey’s to outline opportunities for the company to take responsibility for the recyclability and sustainability of its end of life packaging. As a closely held company, most shares are controlled by shareholders aligned with the company so the total vote result was just 5.5%, yet the proposal received the support of a whopping 54.2% of independent shareholder votes! This sends a clear message to Hershey’s that independent shareholders want its iconic chocolate wrappers to be recyclable and stay out of landfills and the environment.

Constellation Brands – Second year of strong shareholder support

For the second consecutive year, more than a quarter of independent shareholder votes supported our 2024 resolution with Constellation encouraging the company to study enhanced action towards ensuring a sustainable end of life for its packaging. Our 2023 resolution received 25.3% overall support and 29.6% independent support; when the company did not sufficiently address investor concerns, As You Sow and Warren Wilson College re-filed in 2024 to receive 24.6% of overall support and 28.4% of independent shareholder support.

Plastic Microfiber Shedding. Unbeknownst to many, fiber shedding from our clothes – especially exercise or outdoor gear which is often made from plastic – is one of the leading causes of microplastic pollution. Our engagements below centered on the best-known solution: investigating alternative garment design, handling, solutions, and the state of the problem.

                Nike, VF Corp, and Lululemon – Agreements for microfiber research & transparency

In our first year of engagement on plastic microfibers we filed with Nike and Lululemon and co-filed at VF Corp with Green Century Capital Management asking each company to further research the implications of plastic microfiber shedding into waterways that occurs from the intended wear of their clothing. After dialogue with each company, we withdrew all three resolutions in exchange for new actions to prevent microfiber shedding, including pre-competitive collaboration, reporting on product shedding and solutions, and research into setting a new microfiber shedding reduction goal.

Petrochemicals. This initiative looks all the way upstream of the plastic pollution crisis to the manufactures of plastic themselves, asking each company to evaluate the risks of continuing to produce high amounts of plastic.

Dow, ExxonMobil, Phillips 66, Chevron, & Westlake – Investors seek action on plastic production

We continued to file proposals with global petrochemical companies asking them to plan for a future of reduced plastics production by assessing how transition toward reduced demand for plastics would impact their operations. We also asked companies to disclose concerns regarding chemical recycling production processes and, at Westlake, asked the company to set a plastic recycling production goal. We maintained fairly strong second year vote results at Dow (26% overall) and third year results at ExxonMobil (20.8% overall). We received lower results at Phillips 66 (11.7% overall) and Chevron (7.5% overall) as some investors appeared satisfied with opaque estimates of future demand provided by the companies, which shareholder proponents rejected as not responsive to the proposals. Our recycling proposal at Westlake, where more than 70% of shares are held by management, received 6.6% overall support and 27.2% support from independent shareholders.