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Investors Call For Food Companies That Oppose Labeling to Stay Out of Washington State GMO Battle

Companies that donated funds to oppose ballot initiatives to require the labeling of products containing genetically modified organisms (GMOs) are facing new pressure from shareholders to stay out of future elections.

By Jennifer Elks | Published 11 years ago | About a 4 minute read

Leading up to the vote on Washington State’s ballot initiative to require GMO labeling, As You Sow (AYS), the Green Century Equity Fund, the Environmental Working Group (EWG), and the U.S. Public Interest Research Group (U.S. PIRG) are filing resolutions asking the top corporate donors to the opposition of last year's California GMO labeling ballot initiative (Prop 37) to refrain from using corporate funds to influence political elections. Investors note that many of the companies that contributed to anti-Prop 37 measures experienced significant consumer backlash on social media sites and were the subject of consumer boycotts.

"Companies that get involved in highly controversial public policy issues risk alienating their consumer base," noted Lucia von Reusner, shareholder advocate for Green Century Capital Management. "Using shareholder funds to publicly oppose transparency and the public’s right to know threatens to erode consumer trust and exposes the company to significant risks as a result."

Recent research revealed that nearly two-thirds of consumers worldwide seek out non-GMO food. In a 2010 Harris Poll, nearly half of respondents indicated that if alternative options were available, they would shop elsewhere if they learned that a business they patronized had contributed to a candidate or a cause that they opposed, and in a 2012 Bannon Communications poll, 79% of respondents said they would refuse to buy a company’s product or service to protest its political spending.

"By spending money to influence the outcome of ballot initiatives and other political issues, companies are sending a message to their customers," said Andrew Behar, CEO of As You Sow. "In the case of GMO labeling, they are saying ‘we don’t want you to know what is in our products.’ This creates material risk for investors based on negative brand reputation."

To date, As You Sow has filed shareholder resolutions at Monsanto, E.l. DuPont de Nemours and Dow Chemical, and intends to also file at General Mills and Abbott Laboratories, which combined gave over $17 million to defeat Prop 37, the CA labeling initiative (Abbott Labs also rejected a resolution from AYS requesting the elimination of GMOs from its products earlier this year). The Green Century Equity Fund plans to file at Kraft Foods Group, which gave $2 million, and Environmental Working Group plans to file at Coca-Cola and Pepsi, which combined donated $4.2 million. Other companies being contacted by investors include ConAgra Foods, Kellogg, Campbell Soup, J.M. Smucker, Hershey, Hormel Foods, Dean Foods, McCormick & Company, Mondelez International, Dole, Hillshire Brands, Mead-Johnson Nutrition, Bayer, Syngenta AG, Nestlé, Smithfield, Del Monte Produce, H.J. Heinz, Mars, Unilever, Grupo Bimbo, Bumble Bee Foods, Ocean Spray Cranberries, Sara Lee, Cargill, Welch’s, Land O’ Lakes, Sunny Delight Beverages, Wrigley and Tree Top.

"The polling is clear — citizens and consumers overwhelmingly approve of labeling GMOs and overwhelmingly disapprove of corporate money in elections," said Blair Bowie, Democracy Advocate at U.S. PIRG. "Any corporation that spends against this ballot initiative, whether directly or through a dark money group like the Grocery Manufacturers Association (GMA) risks its reputation and warrants the question, what could be so important to hide that it’s worth skewing our democratic process to do so?"

Scott Faber, Vice President of Government Affairs at EWG says, "American consumers simply want the same rights as consumers in 64 other nations that require GMO labeling. Smart companies increasingly recognize that the real cost of lost brand reputation and consumer loyalty far outweighs the imaginary costs of labeling." Faber is also the Executive Director of Just Label It, a national GMO labeling organization.

The top 50 corporate donors who supported the "No on 37" campaign in California will also receive a letter signed by 30 investors representing $11 billion in assets under management, urging the companies to stay out of elections on controversial public policy issues.

A record number of shareholders with triple-bottom-line interests are asserting their concerns more than ever.

Last week, Dr. Bronner’s Magic Soaps unveiled a special agitprop label for its quart-size liquid soaps in support of GMO labeling and Washington State's 522 initiative. The limited edition label will be available through November. Dr. Bronner’s is one of the top five contributors to the campaign.