Approximately 18% of shareholders at drinks giant PepsiCo voted in favour of a resolution to disclose its biodiversity impacts on Wednesday, Carbon Pulse has learned.

The vote marked the first time a proposal requesting a comprehensive biodiversity report has been voted on by shareholders of a publicly traded company, bucking pushback from PepsiCo management, filer of the proposal, Green Century Funds, said.

Ahead of the vote, several institutional investors announced support for the proposal that PepsiCo assess and report its impacts on nature, including Norges Bank Investment Management, Allianz Global Investors, and Storebrand Asset Management.

“We’re gratified that a significant number of PepsiCo shareholders stood up for nature,” Leslie Samuelrich, president of Boston-based Green Century, said.

“PepsiCo relies on nature for all the products it sells. We hope they hear this clear message from shareholders: The company should account for its reliance on nature, it should disclose its impacts, and it should reduce those impacts wherever possible.”

Andrew Shalit, shareholder advocate at Green Century, said the 18% result figure is strong enough to keep biodiversity on the company agenda, even though it won’t force PepsiCo to act.

“Shareholder resolutions are advisory (non-binding), regardless of the number of votes they garner, and every shareholder who is willing to vote against management is significant,” Shalit told Carbon Pulse.

ISS and Glass Lewis had recommended voting against the PepsiCo proposal, maintaining a “recent trend of recommending ‘yes’ votes on fewer ESG proposals”, he said.

“We used to take nature for granted, but we don’t have that luxury anymore,” Shalit said. “Companies have to ensure their operations have a positive impact on nature. Investors need comprehensive biodiversity reporting through accepted frameworks to have confidence in a company’s behaviour.”

The result was unusually announced during the annual general meeting, rather than a few days later, he said.

The New York City Comptroller, Rothschild & Co Asset Management, and LocalTapiola Asset Management, also pre-announced support for the filing.

The resolution stressed that “failure to comprehensively assess its natural capital dependencies and ultimately mitigate their impacts on the company may expose PepsiCo to unnecessary risk”.

PepsiCo’s board had rejected the need for a biodiversity assessment, claiming it would not be in the best interests of the company or its shareholders while pointing out that the firm already engages in sustainability initiatives.

However, the resolution said that “while PepsiCo has developed a number of commendable sustainability initiatives, it has not undertaken a systematic review of its dependencies and impacts on biodiversity and natural capital”.

“Without a comprehensive assessment of the company’s biodiversity impacts, dependencies, risks, and opportunities to inform its policies, PepsiCo may subject itself to unnecessary systemic, regulatory, and financial risk.”

The filing is one of several this proxy season requesting companies file disclosures in line with the recommendations from the Taskforce on Nature-related Financial Disclosures.

On May 16, shareholders of the US-headquartered retail giant Home Depot are set to vote on a similar resolution.

Read Carbon Pulse analysis of investor interest in nature ramping up despite rising corporate resistance, published Thursday.

By Thomas Cox – t.cox@carbon-pulse.com

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