August 26, 2013
Animal Protection, Financial and Religious Leaders Co-File Shareholder Proposal
August 22, 2013 — Shareholders of Tyson Foods, Inc.* have submitted a resolution asking that the meat giant disclose the financial and operational risks associated with its use of controversial gestation crates, tiny cages that so severely restrict pigs’ movement, the animals essentially spend their lives unable to even turn around.
The proposal — filed jointly by The Humane Society of the United States and socially-responsible investment firm Green Century Capital Management, and co-filed by the United Methodist Church Benefit Board, Inc. — suggests that Tyson may be in danger of losing market share if the company doesn’t respond to rising customer demand for higher animal welfare standards. It is the latest move in a decade-long effort to modernize the pork industry by seeing it shift from gestation crate confinement to more up-to-date production systems that allow animals greater freedom of movement.
“Rising concerns over these cages have rapidly shifted the marketplace, with dozens of top global food brands—including Tyson customers—demanding change,” notes the proposal. “Tyson’s failure to disclose the risks associated with the indefinite inclusion of gestation crates in its supply chain is of concern to shareholders.”
Gestation crates have come under fire from veterinarians, animal welfare advocates, legislators, religious leaders, scientists, consumers and food retailers. Nearly 60 of the world’s largest pork buyers—Burger King*, Costco*, Oscar Mayer* and dozens more—have made commitments to eliminate the crates from their supply chains. Meanwhile, many family farmers have been raising pigs without the use of gestation crates for generations.
Matthew Prescott, Food Policy Director of the Humane Society of the United States, stated: “Gestation crates are cruel, outdated, and unnecessary. Americans simply don’t support locking animals up in cages barely larger than their own bodies and letting them languish for months on end.”
“With virtually every leading pork buyer in the nation having publicly committed to eliminating gestation crates from their supply chains, investors are extremely concerned about the implications of Tyson’s refusal to meet its buyers’ needs,” said Leslie Samuelrich, Senior Vice President at Green Century Capital Management. “Tyson may be at risk of losing its market if it continues to ignore the changed economic landscape. Investors expect the company to act ethically and demand that it act sensibly.”
Tyson’s major competitors have responded to consumer demand and have begun moving away from this practice. Smithfield Foods* (the world’s largest pork producer) and Hormel Foods* (maker of SPAM, and also a leading pork producer) have announced that their company-owned facilities will be gestation crate-free by 2017, and pork producer Cargill* is already 50 percent gestation crate-free at its operations. In a 2013 survey by the National Pork Board, 53 percent of pork producers said they do not use gestation crates or plan to stop using them in favor of group housing of sows.
An Iowa State University two-and-a-half year long economic comparison of gestation crates and group housing found that “reproductive performance can be maintained or enhanced in well-managed group housing systems . . . without increasing labor.” Overall, the study concluded that “group housing . . . resulted in a weaned pig cost that was 11 percent less than the cost of a weaned pig from the individual stall confinement system.”
The full text of the shareholder proposal is available upon request.
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The Humane Society of the United States is the nation’s largest animal protection organization, rated the most effective by its peers. Since 1954, The HSUS has been fighting for the protection of all animals through advocacy, education and hands-on programs. We rescue and care for tens of thousands of animals each year, but our primary mission is to prevent cruelty before it occurs. We’re there for all animals, across America and around the world. Celebrating animals and confronting cruelty — on the Web at humanesociety.org.
Green Century Capital Management is an investment advisory firm focused on environmentally responsible investing. Founded by a partnership of non-profit environmental advocacy organizations in 1991, Green Century’s mission is to provide people who care about a clean, healthy planet the opportunity to use the clout of their investment dollars to encourage environmentally responsible corporate behavior. Green Century believes that shareholder advocacy is a critical component of responsible investing and advocates for greater corporate environmental accountability. Green Century manages the environmentally responsible Green Century mutual funds.
Green Century Capital Management, the administrator of the Green Century Funds, occasionally buys positions in various companies that do not meet the Funds’ environmental standards, for the purpose of enabling Green Century to advocate for what it considers to be important reforms. As disclosed below, neither of the Green Century Funds (the “Funds”) owns any shares of Tyson Foods Inc., Burger King Worldwide, Inc., Smithfield Foods, Inc., Hormel Foods Corporation, or Cargill, Inc.
*As of June 30, 2013, Costco Wholesale and Kraft Foods Group Inc. (whole owner of Oscar Mayer) comprised 0.00% and 0.76%; and 0.00% and 0.52% of the Green Century Balanced Fund and the Green Century Equity Fund, respectively. Other securities mentioned were not held in the portfolios as of June 30, 2013. References to specific securities, which will change due to ongoing management of the Funds, should not be construed as a recommendation by the Funds, their administrator, or their distributor.
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