Contact: Lucia von Reusner, Green Century Capital Management, 617-482-0800, email@example.com
May 14, 2015: Concerned that Kraft Foods is failing to manage deforestation and community exploitation taking place across its supply chains, a shareholder proposal urging the company to disclose how it is managing these controversial issues received support from nearly a third of shares voted at the giant food manufacturer’s annual shareholder meeting last week.** Kraft Foods Group is one of the largest consumer packaged food companies in North America, and a significant buyer of key commodities that have been linked to deforestation and human rights violations.
Green Century Capital Management joined Domini Social Investments and Calvert Investment Management in filing the shareholder proposal that was voted on at Kraft’s annual shareholder meeting last week, urging the company to adopt policies that would curb these risks in its supply chain. The shareholder proposal received support from 30.3% of the shares voted in favor and against the proposal, according to data just released by the company.
“Consumers are increasingly concerned about how the food they purchase to feed their families was produced, and don’t want to buy food that was made by destroying rainforests and exploiting workers and local communities,” noted Lucia von Reusner, Shareholder Advocate for Green Century Capital Management, which co-filed the shareholder proposal urging Kraft to adopt responsible sourcing policies. “Kraft is lagging competitors and the industry as a whole in taking responsibility for upholding strong sustainability standards across its supply chain, putting the company’s reputation and shareholder value at risk.”
Kraft purchases many ingredients for its products known to drive deforestation and human rights violations, including palm oil, soy, sugar, beef, and paper. Global demand for these commodities is the single leading driver of deforestation, and is also associated with land grabs from local communities as well as child and forced labor. Responding to concerns from consumers and investors, major companies have adopted stricter sourcing policies aimed at curbing these controversies in their supply chains. Competitors General Mills,* Kellogg’s,* ConAgra,* and Mondelez* are among just some of the companies that have adopted strict ‘no-deforestation’ sourcing policies for the palm oil used in their products.
“This proposal is an invitation to Kraft to join other leading companies in taking meaningful steps to eradicate deforestation and human rights abuses from their global supply chains,” said Adam Kanzer, Managing Director, Domini Social Investments LLC, the lead filer of the proposal. “Investors need to understand how Kraft is managing these known risks, which threaten to tarnish the company’s good name.”
“Institutional investors need corporations they own to report their raw material supply chain risks and opportunities. Corporations must decrease their carbon pollution emissions from deforestation and forest degradation caused by their consumption of raw materials,” said Gabriel Thoumi, CFA, Calvert Investment Management, Inc.
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Green Century Capital Management is the investment advisor to the Green Century Funds and offers two environmentally and socially responsible funds, the Green Century Equity Fund and the Green Century Balanced Fund. Green Century works to curb climate change through fossil fuel free investing, reinvestment in sustainable companies, and advocating with companies to improve their environmental policies and supply chains. Green Century also is the only U.S. mutual fund company owned by environmental non-profits, the Public Interest Research Groups (PIRGs).
*As of March 31, 2015, Kraft Foods Group, Inc., General Mills, Inc., Kellogg Company, and Mondelez International, Inc. comprised 0.00% and 0.69%, 0.00% and 0.46%, 0.00% and 0.24%, and 0.00% and 0.81% of the Green Century Balanced Fund and the Green Century Equity Fund, respectively. Other securities mentioned were not held in the portfolios as of March 31, 2015. References to specific securities, which will change due to ongoing management of the Funds, should not be construed as a recommendation by the Funds, their administrator, or their distributor.
**The percentage in favor was calculated by (i) dividing the number of votes in support of the proposal by (ii) the sum of the number of votes voted in support of and against the proposal. Abstentions and broker non-votes were not included in the calculation.
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