Green Century has just filed another plastics-focused resolution for the company’s annual meeting scheduled for later this year. — Reuters
New York: General Mills Inc is facing growing criticism from a shareholder after failing to respond to calls for the company to bolster its sustainable-packaging efforts.
Almost two years ago, Green Century Funds received majority support from General Mills shareholders for a resolution requesting the company set goals to reduce its plastic waste and provide regular progress reports.
Green Century says little headway has been made. As a result, the investment firm, which oversees roughly US$1bil, has just filed another plastics-focused resolution for the company’s annual meeting scheduled for later this year.
“Investors want General Mills to take their concerns seriously,” said Douglass Guernsey, a shareholder advocate at Green Century, which has been in discussions with the company about its packaging plans.
General Mills, known for brands such as Haagen-Dazs ice cream and Betty Crocker, remains focused on “advancing our commitment to design 100% of our packaging to be recyclable or reusable by 2030, and today, 93% of General Mills’ packaging is recyclable by weight,” said company spokesperson Jamie Bastian.
In the initial shareholder proposal, Green Century argued that General Mills’ plastic policy was trailing those of industry peers, making it “vulnerable to a changing regulatory landscape.”
At the time, the company’s board of directors recommended voting against the proposal, citing plastic efforts the company had already made.
While General Mills’ 2030 goal is hopeful, “the reality is it’s just wishful thinking” given the consumer-goods company’s plastic usage, Guernsey said.
Part of the company’s plastic strategy involved an investment in a now non-operational Minnesota-based plastic facility called Myplas.
The flexible-film recycling plant, which recently stopped work, according to a report in the Star Tribune, received funding from companies including General Mills.
General Mills referred to Myplas as a plastics solution in its 2023 responsibility report.
The company, which called the plant’s partnership “groundbreaking”, planned to use Myplas “for both food-grade and potential non-food-grade film”.
The 2022 shareholder proposal, however, was specific in asking for a report related to plastic use.
“It’s concerning, frankly,” that General Mills hasn’t taken action, Guernsey said, adding that “it raises certain governance issues” because recycling is clearly an issue that investors care about.
General Mills plans to release its latest responsibility report today, which the company says will include information about progress related to its packaging strategy.
The General Mills vote of 2022 is a standout because it’s rare for a shareholder proposal to win majority support.
Last year in the United States, just 5.4% of all shareholder proposals received approval from more than half of those voting, and even fewer environmental and social proposals – only 2% – got more than 50%, according to Bloomberg Intelligence.
Shareholder proposals that receive 20% to 30% support typically lead to some action at companies, said Heidi Welsh, director of the Sustainable Investments Institute, which tracks organised attempts to influence corporate behaviour on social and environmental issues.
When companies fail to address requests from the majority of investors, it represents a “a failure of the board’s primary responsibility, which is to represent the shareholders”, said Rob Du Boff, senior environmental, social and governance analyst at Bloomberg Intelligence.
General Mills does disclose some plastic information in its sustainability report, but it isn’t what investors have asked for, Guernsey said.
Green Century decided to file another proposal, as General Mills didn’t make enough changes in response to the 2022 majority vote, he said. — Bloomberg
