Constellation Brands Inc. | Producer responsibility for plastic packaging at Constellation Brands Inc.

Status
AGM passed
AGM date
Previous AGM date
Proposal number
6
Resolution details
Company ticker
STZ
Resolution ask
Report on or disclose
ESG theme
  • Environment
ESG sub-theme
  • Waste and pollution
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Consumer Discretionary
Company HQ country
United States
Resolved clause
RESOLVED: Shareholders request that the Board issue a report, at reasonable expense and excluding proprietary information, describing opportunities for Constellation to support a circular economy for packaging.
Whereas clause
WHEREAS: The growing plastic pollution and packaging waste crises pose increasing risks to Constellation Brands. Corporations could face an annual financial risk of approximately $100 billion should governments require them to cover the waste management costs of the packaging they produce.[1] Laws to this effect have significant momentum, having been recently adopted in four U.S. states, with additional introduced at the state and federal level.[2] The European Union has already enacted a $1 per kilogram tax on all non-recycled plastic packaging waste.[3] Additionally, consumer demand for sustainable packaging is increasing.[4]

Moreover, plastic pollution generates climate risk. A circular economy, whereby packaging is designed for reuse or recycling, keeping it in the economy and out of the environment, is critical to a net-zero emissions world. The Recycling Partnership (TRP), the leading recycling organization, has found that spending only $17 billion to modernize and expand recycling infrastructure would save the equivalent of 710 million metric tons of CO2 over ten years.[5]

Constellation states it is committed to emissions reductions, yet has taken virtually no action to ensure the circularity of its product packaging,[6] despite the fact that its sold products and packaging contribute significantly to Scope 3 emissions at their end-of-life (EOL).[7]

By contrast, more than 100 leading companies embrace circular packaging by acknowledging financial responsibility for the collection, sorting, and recycling of packaging at EOL, a policy known as Extended Producer Responsibility (EPR) and a key component of a circular economy.[8] TRP has encouraged companies to support EPR and to make voluntary financial contributions to recycling infrastructure.[9]

Competitors Diageo, Heineken, Molson Coors, and at least 26 other major companies make voluntary contributions to expand recycling infrastructure.[10] Constellation is not known to support EPR or voluntarily contribute financial resources to help ensure its packaging never becomes waste. Constellation earned an “F” grade on a recent As You Sow report evaluating corporate packaging sustainability.[11]

In 2023, more than 25% of Constellation shares voted were in favor of an investor proposal to support a circular economy for packaging.[12] Constellation announced plans to improve packaging design but has made no commitment to improve collection and recycling of packaging at EOL.[13]

Constellation could avoid regulatory, environmental, and competitive risks by adopting a circular economy approach to packaging, embracing EPR, and contributing to recycling infrastructure.
Supporting statement
SUPPORTING STATEMENT: The report should assess, at Board discretion:

The reputational, financial, and operational risks associated with failing to promote a circular economy for packaging; and

Opportunities to develop policies or goals to support extended producer responsibility and determine an appropriate level and frequency of voluntary financial contributions to recycling infrastructure.

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