General Mills Shareholders Reject Producer Responsibility Recycling Strategies

A resolution that would have required General Mills to reassess its post-consumer waste strategies and possibly to pay recycling fees for plastics and fiber has been rejected by stockholders.

The environmental organization As You Sow submitted the resolution, which was heard at the company’s 85th annual meeting in Minneapolis, MN on September 24. Clean Yield Asset Management co-filed the resolution. Approximately 6 percent of votes were in favor of the resolution.

According to As You Sow’s Vice President, Conrad MacKerron, the aim of the resolution was to increase the use of what is called extended producer responsibility (EPR) in which the company pays a fee for the future recycling of its post-consumer product waste. In many cases, this fee is then accounted for in the marketed cost of the product.

MacKerron said that while EPR is only one aspect of a sustainable production policy, it’s a big one when it comes to decreasing landfill waste because it requires the company to network with its peers – those companies that provide goods and services within its supply chain.

“It has to be done as a much broader industry program,” said MacKerron, and one which encourages consumers to use recycling programs that, in turn, reduce the dependence on landfills and other methods that contribute to carbon emissions. By getting larger companies like General Mills to spearhead and support an EPR program, he said, As You Sow is able to encourage other industries to take up the lead as well.

EPR was first introduced in Sweden in the 1990s. Since then, it has been adopted in dozens of countries around the world. More than 20 states in the U.S. support EPR in the recycling of electronic products and components. It’s also used in the recycling of tires, mattresses and soft drink bottles, for which consumers pay a fee, either directly or as part of the cost of the product, to ensure the materials are diverted from landfill.

General Mills’ Sustainability Officer, Jerry Lynch, said that the shareholders’ decision to not support EPR practices at this time shouldn’t be taken as an indication of the company’s stance on increasing sustainable practices in the industry. He said that the company has been a leader in recycling since the 1930s when it “pioneered” its first recycling procedures and proved it could be done. He said he saw the company’s goal to source 100 percent of its packaging from recycled fiber or wood from regions that do not contribute to deforestation by 2020 was an indication of its commitment to sustainable production methods.

“We work closely with all of our suppliers,” said Lynch.

Shelley Alpern, who serves as the director of social research and advocacy for Clean Yield Asset Management, said she welcomes the recent news about General Mills’ plan to increase recycling of fiber content.

“But it still leaves a problem with plastics. So there is clearly more work to be done,” Alpern said.

MacKerron said that General Mills continues to set “an ambitious set of goals” when it comes to sustainability, that are “laudatory” and acknowledged that the company is already a leader in recycling post-consumer fiber content.

However, he said that one of the reasons the organization submitted the resolution was to encourage a higher recycling rate for certain Yoplait yogurt containers. The polypropylene used in such containers – what is commonly known in the recycling world as #5 plastic – is not accepted at all recycle programs and thus has a much higher chance of ending up in the landfill. According to the Environmental Protection Agency data, said MacKerron, #5 plastics only have a recycle rate of about 15 percent.

“We know that about 50 percent of the population doesn’t have access to [#5 recycling options]. You can’t [always] put the #5s in your curbside bin, so that is a huge problem,” MacKerron said.

Lynch said that the company recognizes the need for the recycling of #5 plastics, but feels that the answer remains in finding ways to change consumer behavior and for cities to improve their recycling services. A few years ago, partly due to As You Sow’s encouragement, General Mills partnered with Waste Management to conduct a pilot recycling program in Denver. The goal was to see if they could improve the recycling rate of #5 Yoplait containers. Lynch said they used consumer education to meet their goals.

“We saw some very nice increases in the materials that were collected during that period.”

He said the pilot proved that “education (that gets) consumers to change their behaviors (is) what really drives recovery in recycling.”

At the same time, he said General Mills remains committed to finding new ways to support sustainable business practices.

“We are always looking at options,” Lynch said.

From MacKerron’s point of view, the takeaway lesson of the pilot program was that viable recycling programs work best when there is leadership and synchrony between participating companies – as well as educated consumers. He said that having General Mills at the forefront spearheading a recycling program that increases both education and willing participants is what made the program.

“The idea is to get (companies) to join with other peers and make this a priority, to really push the whole issue of waste and recycling of post-consumer waste, (and) elevate that as an issue within the company to make it a priority issue.”

Alpern said she saw General Mills’ latest announcement as a positive sign of its continued effort to expand recycling programs.

“I think the pressure they are getting from shareholders, from multiple sources, is definitely driving them in this direction, and we have to keep it up. Even though we’re not exactly getting what we asked for in the time frame that we’re asking for it, I do feel confident,” said Alpern.

MacKerron said that this is the second year that the organization has submitted a resolution to the shareholders, and still sees EPR as a goal that with General Mills’ support, would help improve recycling statistics across the U.S.

Both As You Sow and Clean Yield said they will continue to encourage companies to increase the use of EPR strategies.

Images courtesy of theimpulsivebuy