Boston, MA //October 8, 2019:
Lamb Weston (NTSE: LW) spun out of Conagra in 2016 to become a leading global distributor of frozen potatoes, sweet potatoes and other vegetable products. The company’s sustainability efforts are comprehensive in their reach across its entire supply chain, but with the exception of setting a water reduction goal, we found that the company had very few meaningful metrics for assessing its sustainable agriculture performance.
In fall 2018, we asked management to describe and report on any plans to strengthen sustainable agriculture reporting, specifically related to pesticide use. Our concern comes at a time when food companies are exposed to rising business risks from raw material sourcing. For example, shifts in consumer preferences based on how food is grown and its impacts on human health and the environment, including pollinators, necessitates strong commitments to sustainability strategies and goal setting. Lamb Weston was agreeable to dialogue with us but after negotiations stalled Trillium and co-filer Green Century Capital Management filed a shareholder proposal in March, 2019. Noting that potatoes rank high on lists for pesticide residue, the proposal asked the company to disclose metrics pertaining to its sustainable agriculture programs and how pesticide use impacts pollinator health.
In the week leading up to the Annual meeting we were pleased to read a letter from Lamb Weston to stockholders in which management stated that it plans to ‘incorporate pesticide use measures’ in its 2020 Corporate Responsibility report. While there had been some earlier suggestions that the company would do this, the statement was a clear expression of their growing awareness that they needed to address this issue. This statement and the 34% support from voting shareholders (a high vote for proposals filed on this topic) signals demand for accountability to pesticide risk in corporate sustainability strategies. The future of food and farming depends on the success of food producers like Lamb Weston to address public scrutiny of pesticide use. We will continue to monitor its progress.
For more information: Susan Baker, Trillium Asset Management, 617-532-6681, firstname.lastname@example.org
Important Disclosure: This is not a recommendation to buy or sell any of the securities mentioned. It should not be assumed that investments in such securities have been or will be profitable. The specific securities were selected on an objective basis and do not represent all of the securities purchased, sold or recommended for advisory clients.