Dr Pepper Snapple resolution: “green” v. speed…
While for many, spring heralds the arrival of tulips and daffodils, we also look forward to the bloom of proxies and shareholder proposals. One new proposal that’s interesting is in the proxy that Dr Pepper Snapple Group (DPS) filed on March 29.
This measure is one of more than a dozen shareholder proposals that the non-profit group, “As You Sow”, submitted to a variety of high-profile companies in 2012. In Dr Pepper Snapple’s case, As You Sow submitted the resolution on behalf of a Boston-based group that owns 210 shares, The Unitarian Universalist Association.
The crux of the group’s proposal can be found in the company’s 2011 Corporate Social Responsibility update, where CEO Larry Young stated that, “At Dr Pepper Snapple Group, we understand that an investment in sustainability is an investment in our business.” And yet, As You Sow contends that Dr Pepper Snapple – unlike its competitors – hasn’t publicly set any quantitative goals for “container recovery or the use of recycled content in its bottles and cans.”
The resolution asks the directors to:
“…adopt a comprehensive recycling strategy for beverage containers sold by the company and prepare a report by September 1, 2012 on the company’s efforts to implement the strategy. The strategy should include aggressive quantitative recycled content goals, and container recovery goals for plastic, glass and metal containers….”
The group cites data from the non-profit Container Recycling Institute, noting that about $2.4 billion worth of beverage containers – that’s roughly 2/3 of an estimated 224 billion containers generated annually in the U.S. – are discarded in landfills or are incinerated or littered rather than recycled. Simply recycling those containers would eliminate 15.6 million metric tons of greenhouse gases, it adds. Finally, it states that competitors such as The Coca-Cola Co. (KO), PepsiCo., Inc. (PEP), and privately-held Nestle Waters North America, Inc. had all – “as a result of engagement with As You Sow and other stakeholders” – established container recovery goals.
Dr Pepper Snapple’s board of directors opposes shareholder resolution 5, but not because it’s against recycling. On the contrary, the company states that what it opposes is being forced to adopt a comprehensive recycling strategy on an expedited basis. It’s not fair to compare its strategies to those of larger competitors, the company contends, because they have “substantially more resources” and have been “operated as public companies for a significant number of years.” We’re not sure what being public (or not) has to do with the ability to recycle, but we’re also not the ones making the point. Dr Pepper Snapple does plan to unveil a national recycling strategy by 2015, it said, and it argued that it reduced plastic waste by approximately 30 million pounds through the end of 2011 (a goal it hopes to double by 2015); and is currently recycling 75% of its manufacturing solid waste (with a goal of 90% by 2015).
Three years seems like a long time to craft a comprehensive recycling strategy, especially if other major soft drink companies have already done it. On the other hand, we note that in its 2010 Corporate Social Responsibility Report, Dr. Pepper Snapple disclosed that it (along with its industry peers) had joined the American Beverage Association’s “Full Circle Recycling Initiative,” a program designed to push the industry to use “100 percent recyclable containers” and encourage consumers to recycle them once they’re empty.
So, shareholders: Half full or half empty? Cast your vote at the May meeting (or before). But unless the measure fails overwhelmingly, we expect that we’ll see it again next year — that’s the beauty of recycling.
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