Foundation agreed to do. Smithfield identifies this point in the relationship as the beginning of the partnership between the company and the Foundation.
The Foundation persisted in filing resolutions seeking greater disclosure of the environmental impacts of Smithfield’s operations, soon shifting its focus to both company-operated and contract hog farming operations. While Smithfield resisted the idea of reporting on operations at contract farms for legal reasons that are set out in the full report, the company continued to discuss the idea with the Foundation and to look for an innovative solution both for reporting on the impacts of hog farming and the metrics that could be used to support the reporting.
Ultimately, Smithfield offered to undertake a pilot program through which it would report on the environmental impacts of one of its largest corporate-owned hog farming operations. Smithfield suggested using a new reporting protocol, the Facility Reporting Project or FRP, developed by Ceres that Ceres had recently tested at several locations including a Smithfield Foods affiliated processing plant. The Foundation agreed to support the pilot project and withdrew its 2007 shareholder resolution and did not file a resolution in 2008 to allow the pilot project to proceed. The Foundation sees this point as the beginning of its partnership with Smithfield, although both the Foundation and Ceres prefer to use the term “working relationship.” The pilot project is currently underway and includes FRP reporting at a slaughtering facility and a processing plant in addition to the farming operation.
For Smithfield Foods, the motivation to engage in the partnership included its desire to work with critics to solve problems, to strengthen the company’s reputation with the public and with some of its key customers (including McDonald’s and Wal-Mart), and to improve the company’s internal operations by generating better information on its environmental impacts. For the Foundation, the principal motivation was encouraging the company to increase transparency through better reporting. The Foundation believes that increased transparency will result in better economic and better environmental performance. For Ceres, involvement with the project provides an important method of testing its facility reporting protocol across an entire supply chain.
The Smithfield/Nathan Cummings Foundation/Ceres partnership is still a work in progress. More will be known about the substantive success of the relationship at the end of the year when the FRP reports are completed and the Foundation must decide whether the report on the company-owned farm is an adequate surrogate for reporting on hog farming operations throughout the Smithfield system including contract farms. What the partnership already demonstrates is the possibility of a new form of sustainability partnership—between concerned shareholders and the company in