Outcome: Successfully Withdrawn
Chipotle has stated that “ ’Food With Integrity’ isn’t a marketing slogan. . . . It’s a philosophy that we can always do better in terms of the food we buy.” Yet, Chipotle has not systematically addressed the use of pesticides in its food sources. (http://www.chipotle.com/html/fwi.aspx)
Chipotle customers and shareholders have come to expect the company to provide leadership in product sustainability. The company has begun gathering important information on water treatment and pesticide management from its avocado suppliers, but Chipotle does not report on this information to the public. Reporting on such practices as those used in its avocado assessment tool, and extending similar techniques to other Chipotle produce suppliers is critical to the company’s brand in the U.S., Canada, and especially in stores opening in the U.K. in 2010.
The growth in organic food sales, which according to the USDA’s Agriculture Census, more than tripled to $1.7 billion in 2007 from $393 million in 2002, is evidence of strong public interest and demand for reduced pesticide use.
Providing further evidence of public interest, in November 2009, 85 advocacy groups launched a campaign opposing President Obama’s choice of a pesticide industry official to represent U.S. interests in agricultural trade negotiations.
Pesticides impose a heavy burden on farmworkers, adjacent communities, and the environment. In turn, a reduction in pesticide use can lessen these burdens and production costs. Reduced pesticide use and reduced worker exposure to pesticides can also yield reputational benefits.
Companies leading the way in pesticide use reduction include:
- Sysco Corporation, which supplies Wendy’s, Applebee’s, and other restaurant providers, has established an Integrated Pest Management (IPM) Program that in its first three years reduced pesticide use by nearly 900,000 pounds. Sysco’s program requires its suppliers to prepare IPM programs and employs third party auditors.
- McDonald’s, formerly Chipotle’s corporate parent, has begun a process of gathering and disseminating information on best management practices for pesticide use reduction in its potato supply chain.
Similarly, in Idaho, a multi-stakeholder collaborative demonstration project has shown that mustard greens can be used successfully as a “bio-fumigant” instead of chemical pesticides to control insects and plant diseases affecting potato crops, at reduced cost.
Shareholders request that within one year a committee of independent directors of the board publish a comprehensive report to shareholders discussing how the company is addressing pesticide use reduction in its supply chain, at reasonable expense and omitting proprietary information.
While the company has the discretion to determine the precise content of the report, we believe the following information would be useful to shareholders: identifying those fruit and vegetable supply chains where pesticide use education and farmworker and community benefits are most promising; key performance indicators; incentives, technical assistance mechanisms, and other methods; and timetables and future goals. We also believe the report should identify methods and best practices for monitoring farmworker and community health, treating and reducing farmworker exposure to pesticides, and reporting publicly on these activities.