Shareholder activism made a difference again with yesterday’s announcement that Lowe’s will phase out the sale of neonicotinoid pesticides. Also referred to as “neonics,” environmental watchdog groups said these chemicals have been a leading contributor to “colony collapse disorder.” As the populations of bees have declined worldwide, these chemicals are often still sprayed on nursery plants, and are also in pesticides sold on store shelves. According to a Friends of the Earth report published in 2014, over half of the garden plants purchased in 18 North American cities at Lowe’s, Home Depot and Walmart contained neonicotinoids at levels strong enough to harm or kill bees. Many of these plants were even labeled “bee friendly.”
To that end, Lowe’s has committed to phasing out of all products containing neonicotinoids by the spring of 2019. Of course, a complete elimination of neonicotinoids will require some regulatory changes: some states require the application of neonicotinoids on certain plants and gardening supplies. In addition to finding more suitable materials than the neonicotinoids, Lowe’s will implement an education program informing customers about bees and other pollinators. The company will also provide grants to fund pollinator gardens through its philanthropic and employee volunteer programs.
The shift in Lowe’s policy is the result of a two year campaign led by Friends of the Earth, Domini Social Investments and Trillium Asset Management. The three organizations worked with the Investor Environmental Health Network to approach retailers and food companies about the environmental risks neonicotinoids posed to the environment—and the resulting long-term threat to these companies’ business and long-term viability. In the case of Lowe’s, Domini and Trillium were making progress with the company, but then decided to submit a shareholder proposal in November 2014 to reinforce the urgency of this ongoing problem. Lowe’s then decided to make these new commitments, and in return the investor groups withdrew the shareholder announcement.
To some who are passionate about this issue, waiting four years until these products are phased out at Lowe’s may not seem fast enough. But considering these companies’ complex relationships with their suppliers, this is the reality, and Lowe’s move could nudge its competitors to follow the retailer’s lead. "Investors dislike uncertainty. So despite the seemingly long four year phase out, Lowe's time-bound public-facing commitment to restrict neonics’ use by Spring 2019 gives investors important clarity around its risk profile--both reputational and regulatory--concerning pesticide use reduction and specifically, exposure to bee toxic pesticides,” said Susan Baker, a Vice President of Trillium Asset Management. “By setting clear commitments and a target date, Lowe's is in essence committing to an environmentally preferable purchase program. Suppliers of live goods will have to comply unless exempt by state regulations. This precautionary approach lends itself to meaningful risk mitigation, in our view, and will benefit Lowe's customers, shareholders, the environment and our economy.”
As they say in business school, being a first mover could be an advantage for Lowe’s in terms of customer trust and brand loyalty, especially since more consumers have become aware of the global threat to bees and the havoc it could wreak on the global food supply. “Lowe’s is the second largest home improvement retailer in the world and it is the largest garden retailer to make time bound, public commitments to phase out neonics. We believe this will have a ripple effect throughout the entire industry to move plants and products in a direction that will be truly safe for bees and other pollinators,” said Tiffany Finck-Haynes, Food Futures Campaigner for Friends of the Earth. “An important aspect of Lowe’s program is its commitment to take a more comprehensive approach to tracking pesticide use on its live goods. We do not know of another non-food publicly traded retailer that has made such a commitment.”
North American companies are lagging on this problem when compared to what has occurred in Europe, where these chemicals have largely been restricted for over 15 years. Friends of the Earth has accused the leading neonicotinoid companies of hiding behind public relations spin while leading consumers to believe they are actually on the forefront of saving the global bee population. Yesterday’s announcement my Lowe’s should change the dialogue on this issue, and spur the company’s competitors to change their tune as well. Image credit: Muhammad Mahdi Karim
Leon Kaye has written for TriplePundit since 2010, and became its Executive Editor in 2018. He is also the Director of Social Media and Engagement for 3BL Media. His previous work can be found at The Guardian, Sustainable Brands and CleanTechnica. Kaye is based in Fresno, CA, from where he happily explores California’s stellar Central Coast and the national parks in the Sierra Nevadas. He's lived in South Korea, the United Arab Emirates and Uruguay, and has traveled to over 70 countries. He's an alum of the University of Maryland, Baltimore County and the University of Southern California.