CBIS co-filed a resolution asking Kraft to issue a report describing the company’s goals, strategies, and performance on environmental, supply chain, and human rights issues. The 30% support vote at the company’s May 5th annual meeting showed strong shareholder interest in having Kraft create a more transparent reporting framework around sustainability. “Kraft has not made sufficient progress during more than two years of engagement efforts,” said Dan Nielsen, Director of Catholic Responsible Investing at CBIS. “Shareholder resolutions are important tools that can be an effective means of getting the attention of a company’s senior leadership,” he said. “This strong vote result demonstrates that the concerns addressed in our resolution are shared by a significant number of fellow Kraft shareholders.”
The company has an extensive global supply chain, and its size creates an opportunity to influence suppliers and impact how agricultural ingredients are sourced. Failure to sustainably produce ingredients can have negative impacts on the environment and on people’s lives, both workers and local communities that also depend on sufficient and healthy natural resources; it can also impact Kraft’s long-term growth and sustainability and pose reputational risks if problems arise. “We are looking for Kraft to publish a corporate sustainability report and to meet with CBIS and the other co-filers to review the company’s goals and performance. Kraft should use the report as a tool to develop a strategy for managing sustainability issues, particularly in the company’s agricultural supply chain, and for monitoring and communicating that strategy and its implementation to investors and other stakeholders,” said Nielsen.
CBIS has a particular concern with the sustainable use of water by Kraft’s suppliers, recognizing that the availability of sufficient clean water is a requirement for Kraft’s success and for the health of local communities and the environment on which they depend. The merger later this year between Kraft and Heinz will result in a significantly expanded global supply chain and market. Managing sustainability issues include water resources will become even more critical for the combined company.