Reduce Water Pollution from Supply Chain

Resolution Text

Whereas:
 
                                                                                  
Meat production is the leading source of water pollution in the U.S., exposing 5.6 million Americans to nitrates in drinking water and many more to toxic algal blooms.[1]
                                                                                   
The cultivation of feed ingredients for the 45 million chickens[2] produced weekly by Pilgrim’s is a primary source of water pollution due to nitrates and phosphates washing off fields if improperly managed. Animal waste from over 5,300 poultry farms[3] may contain nutrients, antibiotic-resistant bacteria, and pathogens. These contaminants and poor manure disposal practices pollute local waterways, endangering public health, workers, and the environment.
                                                                                   
At the same time, there is a growing trend toward increased state regulation and oversight of pollution from the meat industry. Pilgrim’s notes that its feed mills are “strategically located in the areas where we have processing operations.”[4] Several states where Pilgrim’s has processing operations[5] have tightened requirements related to nutrient management plans, manure disposal, field application of manure, and groundwater monitoring for animal agriculture.[6]

Pilgrim's competitors are working to reduce supply chain pollution: Smithfield met its target to purchase 75% of its grain from farms managed to reduce water pollution; Perdue has invested $80 million in a poultry litter recycling operation to prevent nutrient pollution; Hormel adopted a sustainable agriculture policy addressing fertilizer and manure management; and Tyson committed to support improved fertilizer practices on two million acres of corn by the end of 2020. Walmart, a Pilgrim’s customer, uses a Sustainability Index to assess suppliers, which includes indicators on manure management and fertilizer use.

Proponents acknowledge the company’s efforts to reduce the quantity of the water it uses, and the company’s environmental policy requiring “vendors” to comply with all applicable environmental laws and regulations, and encouraging vendors to “use best efforts to meet industry best practices and standards and responsibly manage the environmental impact of their operations.”[7] However, neither the company’s disclosures nor its environmental policies specifically address the primary drivers of the company’s supply chain water pollution, including manure from contracted facilities and nutrient runoff from animal feed crops. The company’s reporting and policies therefore lack sufficient detail to assure investors that it is adequately managing the risks associated with water pollution within its supply chain.

RESOLVED: Shareholders of Pilgrim’s Pride Corporation request a report assessing if and how the company plans to increase the scale, pace, and rigor of its efforts to reduce water pollution from its supply chain. This report should omit proprietary information, be prepared at reasonable cost, and be made available to shareholders by December 1, 2020.

Supporting statement:

Although we defer to management for the precise contents, investors believe that meaningful disclosure within the report could include:

  • requirements for manure management practices intended to prevent water pollution        
  • requirements for leading practices for nutrient management and pollutant limits throughout contract farms and feed suppliers, with a focus on verifiably reducing nitrate contamination
  • plans to verify suppliers’ compliance with Pilgrim’s policies

 

[1] https://www.epa.gov/nutrientpollution/sources-and-solutions

http://www.fao.org/3/CA0146EN/ca0146en.pdf

https://ehjournal.biomedcentral.com/articles/10.1186/s12940-018-0442-6

[2] http://ir.pilgrims.com/static-files/1ca44dcf-df55-4c55-9039-3c886e92ef41

[3] Ibid.

[4] https://www.pilgrimsusa.com/our-chickens/

[5] https://www.epa.gov/toxics-release-inventory-tri-program/tri-basic-data-files-calendar-years-1987-2017

[6] https://www.opb.org/news/article/washington-dairy-pollution-regs/

https://www.environmentalintegrity.org/wp-content/uploads/2017/02/Shenandoah-Report.pdf

https://www.jsonline.com/story/news/politics/2017/01/07/state-wants-jump-start-manure-project/96212456/

https://www.nytimes.com/2018/07/09/us/algae-blooms-florida-nyt.html

https://www.flgov.com/wp-content/uploads/2019/01/EO-19-12-.pdf

[7] https://sustainability.pilgrims.com/stories/supplier-code-of-conduct/

Lead Filer

Mary Minette
Mercy Investment Services

Co-filer

Mary Minette
Adrian Dominican Sisters