A resolution asking Coca-Cola to disclose its plans on discontinuing use of bisphenol-A (BPA) in beverage can linings won support yesterday from 26% of the company's shares.
One out of four Coke shareholders is concerned about BPA, representing a 20% increase from last year when one of five supported this resolution.
"Coke has become the industry laggard on BPA and that's a bad message to send to investors," says Michael Passoff, Senior Strategist at As You Sow. "Usually 10% is enough to move a company to take action, but Coca-Cola's refusal to address this issue last year is why it is the only company targeted with a BPA container shareholder resolution again this year. Unlike other major can users who are starting to phase out of BPA, Coca-Cola has shown no evidence that it is actively searching for alternatives."
The resolution was introduced by the shareholder advocacy group As You Sow; socially responsible investment firms Domini Social Investments and Trillium Asset Management Corporation; and several religious institutional investors.
In 2010, the first filing focused solely on BPA was supported by 22% of Coca-Cola investors representing strong support from mainstream investors and proxy analysts.
The resolution was supported by ISS and Glass Lewis- the nation's two largest proxy advisors - and institutional investors including the world's largest pension fund, CalPERS. The ISS recommendation states, "Coca-Cola does not make sufficient disclosure on the steps it is taking to address concerns over the use of BPA in the linings of its canned beverages and its role in the efforts to develop alternatives given the growing awareness of potential effects of BPA by consumers and regulatory agencies."
The 2010 annual study Seeking Safer Packaging, published by As You Sow and Green Century Capital Management, gave Coca-Cola an "F" grade in their ranking of 20 packaged food companies on their efforts to eliminate BPA from products and mitigate BPA-related risk.
Shareholders are concerned that Coca-Cola's use of BPA in cans exposes the company to significant financial and regulatory risks by ignoring recent advances in scientific research, newly stated regulatory agency reviews and concerns about BPA as a health risk, and the proposed federal legislative bills looking to ban BPA.
BPA is known to mimic estrogen in the body and numerous animal studies link BPA, even at very low doses, to potential changes in brain structure, immune system, male and female reproductive systems, and changes in tissue associated with increased rates of breast cancer. Exposure to BPA by the very young, as well as pregnant women, are among the greatest concerns to experts.