Kroger* Faces Shareholder Pressure Over Risks Associated with Deforestation
Press Release Contact: Katherine Kroll, Green Century Capital Management
CINCINNATI, OH, June 28, 2017 – Twenty-three percent of The Kroger Co.’s shareholders supported Green Century’s proposal asking the company to report on and address the risks of deforestation across its global supply chains, according to vote results released at the company’s annual meeting last week. This vote exceeds the average vote for environment-related shareholder proposals and the proposal received recommendation from the non-biased proxy-advisor group ISS (Institutional Shareholder Services), reflecting substantial shareholder concern.
Deforestation is one of the most urgent risks facing global agricultural production because it leads directly to high rates of soil erosion, declines in local rainfall, land conflicts with local communities, and climate change, all of which pose material risks to Kroger’s business and shareholder value.
Industrial agriculture is the primary driver of deforestation. Kroger sources several forest risk commodities including soy and beef. Yet the company does not disclose commodity-wide policies or procedures that would actively monitor and reduce its impact on deforestation.
“Clearing forests to grow crops destroys the very ecosystem that agriculture depends on, and is a short-term business model that poses long-term risks to global food security and shareholder value” said Katherine Kroll, Shareholder Advocate at Green Century. “Kroger both contributes to and is highly exposed to the adverse impacts of deforestation on global agriculture, but is also uniquely positioned to tackle this issue if it chooses to do so.”
Recent shifts in the marketplace show a favoring for sustainable agriculture. Consumers are demonstrating increased attention to and concern about where their food comes from and how it is produced.
Kroger’s competitors and industry peers, such as Walmart* and McDonald’s,* have responded to the threats associated with the impacts of deforestation and have implemented and reported on the methods used to assess and establish comprehensive deforestation-free supply chains.
Further inaction by Kroger could create competitive pressure potentially resulting in significant market share loss.
To learn more about Green Century’s sustainable investment strategy, advocacy efforts, and how you can make an impact with the power of your investments, please visit our website or call 1-800-934-7336.
About Green Century Capital Management: Green Century offers three environmentally and socially responsible mutual funds. Through fossil fuel free investing and our three-pronged approach of sustainable investing, active shareholder advocacy, and support of environmental and public health non-profits, we work to curb climate change, improve environmental policies, and limit environmental impacts of company supply chains
*As of March 31, 2017, McDonald’s Corporation comprised 0.00%, 1.24%, and 0.00% of the Green Century Balanced Fund, the Green Century Equity Fund, and the Green Century MSCI International Index Fund, respectively. Other securities mentioned were not held in the portfolios of the Green Century Funds as of March 31, 2017. 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.
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