||Boston Common Asset Management
||Vote: 9.1%; company provided partial disclosure
- Scotts-Miracle-Gro (hereafter Scotts) established an Environmental Stewardship Program in 2000 and named a Chief Environmental Officer in 2004 who reports directly to the Chief Executive Officer.
- Scotts introduced a full line of environmentally friendly products--Scotts Ecosense--in Canada, where the Province of Quebec and major cities have restricted pesticide use for lawn care.
- Scotts recently introduced environmentally friendly products in the United States, such as Nature’s Care® Insect Killer. These are marketed alongside toxic lawn care products whose ingredients have been registered by the U.S. Environmental Protection Agency. However, in the opinion of the proponents, the EPA program does not sufficiently address scientific concerns about pesticide safety. For example, EPA’s program does not contain screens and tests for hormone disrupting chemicals, as mandated by Congress in 1996. Moreover, lawn care experts have stated roughly half of homeowners admit they do not read or follow label directions when applying pesticides and synthetic fertilizers to lawns, leading to overuse and hazardous misuse of toxic chemicals.
- Recognizing the shortcomings of federal pesticide regulation, local governments in the United States are increasingly considering following Canada’s example and enacting their own limitations. State and local governments are also adopting programs to reduce pesticide use in parks and public spaces.
- Scotts’ Chief Environmental Officer Rick Martinez serves on the Board of Directors of RISE, Responsible Industry for a Sound Environment. RISE aggressively opposes local restrictions on pesticide use. RISE Executive Director Allen James stated in 2005 that the organization is focusing particularly on six states—New York, Connecticut, Maine, Wisconsin, Minnesota and Washington—and in 2006 hired a new “grassroots manager” to work on these issues. RISE also filed suit to challenge restrictions enacted in the City of Madison and Dane County, Wisconsin on “weed and feed” products. Scotts and RISE also support “Project Evergreen”, a nonprofit organization established to oppose local pesticide and fertilizer restrictions.
- Wal-Mart provided approximately 17% of Scotts’ revenues in 2005. Recognizing the business benefits from adopting safer chemicals policies, Wal-Mart stated it will create product safety scorecards and provide incentives for its buyers to purchase environmentally-preferable products. Wal-Mart wishes to spur competition among its suppliers to produce such products.
- In the opinion of the proponents, Scotts’ opposition to local environmental health policies on pesticides may be an unduly costly activity which may cause reputational damage to the Scott’s brand and compromise its retail relationships.
RESOLVED: Shareholders request that the Board of Directors report by 10/01/07, at reasonable cost and excluding confidential information, the company's annual expenditures by category for each year from 1993 to 2005, for attorneys' fees, expert fees, lobbying, and public relations/media expenses, relating to efforts to oppose local policies to limit lawn care product use.
Among other things, proponents urge that the report disclose contributions to RISE, Project EverGreen, and other trade associations, business organizations, and individuals, that may be directed towards lobbying against local legislation or in favor of state preemption of local legislation.