PepsiCo, Kraft Heinz face off with shareholder activists on sustainable packaging
Shareholder resolution season is well underway with numerous proposals targeting packaging usage by CPG, food service and hotel companies.
These groups have focused on plastic packaging for years, and that theme continues. This time, categories such as flexible and reusable packaging also came up. Companies have the option to challenge resolutions with the Securities and Exchange Commission, though so far multiple proposals have made it through for a potential vote. Groups have also reached agreements to withdraw proposals at multiple companies.
Flexibles
As You Sow, a shareholder advocacy group, chose to make flexibles a focal point this year following the relative lack of achievement on 2025 plastics targets set via groups such as the U.S. Plastics Pact and Ellen MacArthur Foundation.
“We think there needs to be some level of accountability when the deadline is missed,” said Conrad MacKerron, senior vice president at As You Sow. “When you look at the continued struggle just to recycle the easy stuff, like the PET bottles, it makes you wonder how they're going to achieve much flexible recycling at scale any time soon.”
Flexibles and films often come up as a challenge for companies looking to make their packaging portfolios more recyclable, due to their multimaterial design and other factors.
As You Sow’s language requests that companies develop reports about the “reputational, financial and operational risks” from using non-recyclable packaging, evaluate actions such as eliminating this packaging, research reusable substitutions and “describe opportunities to pre-competitively work with peers to research and develop reusable packaging as an alternative to single-use packaging.”
PepsiCo unsuccessfully requested that the SEC disqualify an As You Sow proposal and is now recommending that shareholders vote against it. According to the company, “flexible films made up only approximately 5% of our total packaging portfolio by weight” in 2023 and “have been optimized to safely deliver certain snack products with a relatively low GHG and water footprint.”
Kraft Heinz also recommended that shareholders vote against the proposal, while noting that “the recycling in many countries where we sell our products is not yet advanced enough to efficiently collect, recycle and convert these materials into viable end products at scale.”
Both companies cited their involvement in various voluntary initiatives to fund and study recycling for the material, as well as their involvement in upcoming state EPR programs. Both also noted investments in compostable packaging. PepsiCo said it had seen some success with paper-based packaging, but not in cases where it needs to use high barriers.
In some cases, companies are hoping to see chemical recycling become a solution for flexible packaging, both in terms of qualifying flexibles as recyclable and using recycled content from the process, but the technology is not yet active at scale. MacKerron is unconvinced that it’s a solution, because in some cases “the actual yield is low” and it’s hard to know how much material is being turned into plastic versus fuel. “We just don't know because most of them aren't disclosing,” he said.
MacKerron noted some initial progress in standardizing risk disclosure and reporting via a group of CPG, packaging and petrochemical companies working on “responsible production guidelines” with the U.S. Plastics Pact. Participating companies have not yet identified themselves in the process.
Reuse
Driving greater adoption of reusable packaging is an ongoing focus for shareholder advocacy groups.
The Coca-Cola Co. recently drew criticism for walking back its pledge for 25% reusable packaging by 2030 in favor of different recycling-related goals. Green Century Funds said it recently reached an agreement to withdraw a resolution at the company after Coca-Cola agreed to “disclosing its ongoing investments in reusable bottles and the outcomes of these efforts.”
“Though Coca-Cola regrettably abandoned its plastic reduction and reuse goals, this new commitment to disclosing reusable packaging investments and results will help investors track the company’s efforts to mitigate plastic-related risks,” said Green Century President Leslie Samuelrich in a statement.
“We have been investing and remain committed to expanding our refillable packaging options, and this work will continue as part of our consumer-centric strategy,” said Daniel Hughes, Coca-Cola’s director of sustainability of communications, via email. Hughes noted that glass bottles accounted for 1.6 billion unit cases in the company’s overall volume during 2024 and grew at a rate that “outpaced overall company volume.”
Green Century also announced a similar agreement with Starbucks, in which the company “agreed to share actions and plans to increase adoption of reusable cups by early 2026.” The coffee chain recently scaled up its encouragement of reusable ceramic mugs in store and has also participated in other trial programs.
Starbucks did not respond to a request for comment.
Recyclability
Green Century’s Starbucks proposal touched on another key theme this year: recyclability labeling and pledges.
According to the group, Starbucks also “agreed to internally assess customer-facing recyclability claims” in relation to the Federal Trade Commission’s Green Guides and “remove any misleading labels.”
The fund also announced a related agreement with Sealed Air, the only known converter to have a packaging-related shareholder resolution targeting it so far this year.
The company, which makes plastic protective packaging and other products, has been in the midst of a business shift recently. Green Century reached an agreement with Sealed Air to phase out its use of “store drop-off” recycling labels by the end of the year. Environmental groups have previously questioned the efficacy of these store drop-off systems and whether they’re misleading to consumers.
The group also said Sealed Air agreed to “disclose its total plastic and fiber footprint by 2026 as well as its investments in non-plastic packaging options.”
Sealed Air’s latest sustainability report didn’t disclose a breakdown of substrates. As of December 2023, it noted that “recycled content derived from plastic or fiber accounted for 14% of the material weight sold” and “content derived from virgin fiber or other newly produced biobased materials accounted for 3% of the material weight sold.”
Sealed Air did not respond to a request for comment.
Nonprofit The Last Beach Cleanup also targeted Kraft Heinz with a proposal asking that the company issue a report by the end of the year “including the factual basis for legitimacy of all recyclability and recycled content claims on plastic packaging.” Kraft Heinz opposed the proposal for various reasons, including a statement that it has “stringent internal measures in place, designed to help provide that our on-pack claims are not misleading consumers.”
Additionally, The Last Beach Cleanup filed what it describes as a first-of-its-kind proposal asking Mondelēz to issue a report by December “including the factual basis for legitimacy of all recycled content claims made on plastic packaging.” The proposal cited Mondelēz’s recent decision to source plastics linked to chemical recycling via the mass balance accounting approach for certain Triscuit packaging. Mondelēz opposes the proposal.
Recyclability also showed up in other 2025 proposals from As You Sow. They include resolutions asking hotel chains Wyndham and Hyatt about their plans for plastics reduction, both of which were withdrawn following agreements with the companies. The hotel sector has seen a push toward refillable or larger format toiletry bottles in recent years, driven in part by state legislation.
Similar proposals targeted Home Depot, which has phased out certain types of plastic in recent years and opposes the resolution, and Wendy’s, which noted in a prior sustainability report that it uses fiber alternatives in select markets.
See below for a full list of packaging-related shareholder resolutions at key companies. Do you know of others? Email us at [email protected].
Editor’s note: This story has been updated to include an additional proposal filed at Mondelēz.
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