Organization: Smithfield Foods, Inc.

Year: 2010

Description: WHEREAS: In 2007, the Intergovernmental Panel on Climate Change's Fourth Assessment Report states it is "very likely" that anthropogenic greenhouse gas emissions have heavily contributed to global warming.
 
The 2006 Stern Review on the Economics of Climate Change, led by the former chief economist at the World Bank, "... estimates that if we don't act, the overall costs and risks of climate change will be equivalent to losing at least 5% of global GDP each year, now and forever."
 
In 2008, the United States Department of Agriculture reported that, "No matter the region, weather and climate factors such as temperature, precipitation, CO2 concentrations, and water availability directly impact the health and well-being of plants, pasture, rangeland, and livestock." Specifically, "Climate change affects average temperatures and temperature extremes; timing and geographical patterns of precipitation...; the frequency of disturbances, such as drought, insect and disease outbreaks, severe storms, and forest fires...; and patterns of human settlement and land use change," which directly impact crop yields and meat production.
 
Increasingly investors believe that there is an intersection between climate change and corporate financial performance. Goldman Sachs reported in May, 2009, "We find that while many companies acknowledge the challenges climate change presents ... there are significant differences in the extent to which companies are taking action. Differences in the effectiveness of response across industries create opportunities to lose or establish competitive advantage, which we believe will prove increasingly important to investment performance."
 
In 2006, the United Nations Food and Agriculture Organization reported that "livestock are responsible for 18 percent of greenhouse gas emissions, a bigger share than that of transport."
 
In 2010, the Environmental Protection Agency reported that methane emissions-a GHG "more than 20 times more potent that carbon dioxide"-from manure management have increased by 54 percent since 1990, where "the majority of this increase was from swine and dairy cow manure."
 
Smithfield, the world's largest producer of pork, does not currently disclose the climate change impact of its total operations, as it does not report levels of emissions from animal-related sources, such as manure management.
 
Non-animal-related emissions data (derived from fuel burning activities) currently reported by Smithfield show an overall increase of 17 percent in GHG emissions, including 14 percent increase in methane, 76 percent increase in nitrous oxide, and 17 percent increase in carbon dioxide levels relative to 2007.
 
Major food product companies, such as Walmart, Heinz, and other members of the CDP Supply Chain project, are beginning to take into account the total emissions footprint of their suppliers.
 
Information from corporations on their greenhouse gas emissions and reduction strategies is essential to investors as they assess the strengths of corporate securities in the context of climate change.
 
RESOLVED: Shareholders request that within six months of the 2010 annual meeting, the company adopt quantitative goals for reducing total greenhouse gas emissions from its operations, including animal-related sources, and report to shareholders on its plans to achieve these goals, omitting proprietary information and prepared at reasonable cost.