Kroger 2013 Annual Report Download - page 60

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58
•฀ Prohibits฀bribes฀and฀conduct฀that฀appears฀improper฀or฀may฀result฀in฀a฀conflict฀of฀interest;
•฀ Requires฀compliance฀with฀the฀U.S.฀Foreign฀Corrupt฀Practices฀Act;฀and
•฀ Requires฀maintenance฀of฀records฀(that฀must฀be฀furnished฀to฀us฀upon฀request)฀evidencing฀compliance฀
with the code.
Kroger’s฀code฀of฀conduct฀does฀more฀than฀simply฀reporting฀on฀human฀rights฀risks฀in฀its฀supply฀chain;฀it฀
prohibits฀those฀that฀do฀business฀with฀us฀from฀engaging฀in฀the฀type฀of฀conduct฀of฀concern฀to฀the฀proponents.฀
Those฀that฀violate฀our฀code฀will฀not฀be฀permitted฀to฀do฀business฀with฀us฀until฀they฀comply฀with฀our฀code.฀
As฀such,฀we฀do฀not฀believe฀that฀human฀rights฀violations฀in฀our฀supply฀chain฀pose฀a฀substantial฀risk,฀that฀the฀
requested฀report฀would฀serve฀little฀benefit฀to฀shareholders,฀and฀preparation฀of฀a฀report฀would฀divert฀resources฀
that฀otherwise฀could฀be฀more฀appropriately฀used฀in฀the฀best฀interests฀of฀shareholders.
This฀proposal฀covers฀the฀same฀subject฀matter฀as฀one฀submitted฀to฀a฀vote฀at฀the฀last฀three฀years’฀annual฀
meetings฀and฀was฀soundly฀defeated฀by฀shareholders.
SH A R E H O L D E R P R O P O S A L
( I T E M N O. 6 )
We฀have฀been฀notified฀by฀two฀shareholders,฀the฀name฀and฀shareholdings฀of฀which฀will฀be฀furnished฀
promptly฀to฀any฀shareholder฀upon฀written฀or฀oral฀request฀to฀Kroger’s฀Secretary฀at฀Kroger’s฀executive฀offices,฀
that it intends to propose the following resolution at the annual meeting:
“WHEREAS,฀post-consumer฀packaging฀and฀printed฀paper฀comprises฀nearly฀half฀of฀U.S.฀landfill฀waste฀and฀is฀
a฀significant฀consumer฀of฀natural฀resources,฀energy฀and฀source฀of฀greenhouse฀gas฀emissions.฀Half฀of฀printed฀
paper฀and฀packaging฀is฀landfilled฀or฀burned฀rather฀than฀recycled.฀Plastic฀packaging฀debris฀migrates฀to฀oceans฀
where฀ it฀ damages฀ fisheries,฀ tourism฀ and฀ marine฀ life.฀ There฀ is฀ a฀ growing฀ link฀ between฀ ineffective฀ waste฀
management฀and฀plastic฀debris฀piling฀up฀in฀Earth’s฀oceans฀and฀waterways,฀where฀it฀·injures฀and฀kills฀marine฀
animals,฀transports฀invasive฀species฀and฀poses฀a฀threat฀to฀human฀health.฀California฀spends฀nearly฀$500฀million฀
annually฀to฀prevent฀trash,฀much฀of฀it฀packaging,฀from฀polluting฀beaches,฀rivers฀and฀ocean฀frontage.
The฀estimated฀market฀value฀of฀wasted฀packaging฀that฀could฀be฀recycled฀is฀$11.4฀billion.฀Increased฀recycling฀
provides฀more฀efficient฀use฀of฀valuable฀resources.฀It฀generates฀less฀pollution,฀and฀requires฀less฀energy฀than฀
using฀ virgin฀ raw฀ materials.฀ In฀ the฀ U.S.,฀ taxpayers฀ pay฀ to฀ recycle฀ packaging,฀ but฀ poor฀ infrastructure฀ and฀
strapped฀municipal฀budgets฀have฀yielded฀lagging฀recycling฀rates:฀38%฀for฀aluminum;฀34%฀for฀glass,฀and฀only฀
12%฀for฀plastic.฀Further,฀Kroger’s฀house฀brands,฀among฀other฀products,฀are฀recently฀increasing use฀of฀non-
recyclable฀flexible฀plastic฀packaging,฀such฀as฀pouches.
More฀than฀40฀countries฀have฀shifted฀some฀or฀all฀costs฀of฀packaging฀recycling฀onto฀producers.฀U.S.฀producers฀
of฀packaging-intensive฀brands฀can฀expect฀to฀be฀asked฀to฀take฀more฀responsibility฀for฀recycling฀of฀packaging฀
in฀the฀future.฀We฀believe฀some฀measure฀of฀responsibility฀for฀packaging฀is฀a฀key฀component฀of฀a฀corporate฀
environmental฀sustainability฀policy.
Extended฀Producer฀Responsibility฀(EPR),฀a฀corporate฀and฀public฀policy฀that฀shifts฀accountability฀for฀financing฀
recycling฀ of฀ materials฀ from฀ taxpayers฀ to฀ producers,฀ is฀ a฀ promising฀ potential฀ solution.฀ Two฀ major฀ brands,฀
Coca-Cola฀Co.฀and฀Nestle฀Waters฀NA,฀have฀called฀for฀producers฀to฀adopt฀EPR฀programs฀in฀the฀U.S.฀Legislation฀is฀
pending฀in฀several฀states.฀Taking฀an฀active฀role฀in฀planning฀for฀mandated฀producer฀responsibility฀for฀packaging฀
will฀reduce฀risk,฀ensure฀continued฀high฀quality฀packaging,฀reduce฀wasted฀resources,฀and฀increase฀program฀
efficiencies. The company has not moved decisively to lead or participate in such an effort nor addressed its
responsibility฀for฀post-consumer฀packaging฀for฀its฀brands.
BE฀IT฀RESOLVED฀THAT฀shareowners฀of฀Kroger฀request฀that฀the฀board฀of฀directors฀issue฀a฀report,฀at฀reasonable฀
cost฀and฀omitting฀confidential฀information,฀developing฀a฀policy฀position฀on฀the฀company’s฀responsibility฀for฀
post-consumer฀ product฀ packaging฀ recycling฀ of฀ its฀ private฀ label฀ brands,฀ and฀ assessing฀ whether฀ alternative฀
approaches฀could฀lead฀to฀substantially฀increased฀packaging฀recycling.