Shareholders request The J.M. Smucker Company Board of Directors, issue a public report, at reasonable cost and excluding confidential information, by January 2017 analyzing and proposing how the company can increase its renewable energy sourcing and/or production.
In order to mitigate the worst impacts of climate change, the IPCC estimates a U.S. greenhouse gas (GHG) reduction requirement of 80 percent by 2050.
The private sector is critical for driving the change in the demand and consumption of clean energy necessary to meet these targets. Although energy efficiency is crucial for reducing emissions, there is a limit to how far operational efficiencies can carry a company relative to the reductions needed to mitigate the worst impacts of climate change. Sourcing renewable energy is essential to achieve the greatest emissions reductions.
Sourcing renewable energy can make our company more responsive to a global business environment characterized by heightened public expectations and volatile energy prices. We believe investing in renewable energy will diversify our company’s energy sources, reducing the company’s exposure to fluctuating energy prices and move it closer to achieving GHG reductions.
A growing number of companies with strong GHG targets are turning to renewable energy to power their operations and meet these targets. Eric Schmidt of Google recently stated: “Much of corporate America is buying renewable energy in some form or another, not just to be sustainable, because it makes business sense, helping companies diversify their power supply, hedge against fuel risks, and support innovation in an increasingly cost-competitive way.”
A report by the Carbon Disclosure Project found that four out of five companies earn a higher return on carbon reduction investments than on their overall corporate capital expenditures. While generating savings, investing in renewable energy enhances a company’s role as a corporate citizen and strengthens its license to operate – a proactive response to reputational risk associated with climate impacts.
Smucker does not currently have renewable energy targets. However, the company currently operates in several states with strong renewable portfolio standards and incentives for renewable energy investment including Ohio, Pennsylvania, New York, California and Louisiana.
We are concerned our company may be lagging behind peers with renewable energy goals. For example, Campbell’s Soup will source 40% of electricity needs from renewable sources by 2020 and Mars will use renewable sources to meet 100% of its energy needs by 2020. These companies have already demonstrated the feasibility of investing in renewable energy to reduce emissions and power their businesses.
By making a renewable energy commitment, the company may enjoy significant advantages associated with reduced exposure to volatile energy prices; high returns on carbon reduction savings; and reputational benefits associated with contributing positively to U.S. climate and energy security efforts.