Kroger 2014 Annual Report Download - page 60
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TH E B O A R D O F D I R E C T O R S R E C O M M E N D S A V O T E A G A I N S T T H I S P R O P O S A L F O R T H E
FO L L O W I N G R E A S O N S :
Krogerrecognizestheimportanceofensuringbasichumanrightsarerecognizedbythoseseekingto
dobusinesswithus.Inthepast12months,wehaveundertakenanumberofstepstoimproveoursocial
responsibilityandcomplianceprograms.AninternalteamofKrogerleadershasbeenworkinginthepastyear
toevaluateandassessourcurrentandfutureeffortswithregardtosocialresponsibilityandcompliance.We
lookedatoursupplychainandidentifiedkeyareaswherewebelieveadditionalsupplychainaudits,especially
withregardtosocialresponsibility,wouldbebeneficial.Thespecificitemswehaveundertakenare:
• We have revised and updated our Vendor Code of Conduct. It will be published in our 2015
SustainabilityReport.
• We have updated our existing social audit protocol to better align with industry best practices and
recommendedstandards.ThisauditwillberequiredforKrogersuppliersthatarebeingaudited.Wewill
choosewhichsupplierstoauditbasedonvariousriskvariablessuchascountry,productandindustry.
• Wearesignificantlyincreasingthenumberofsocialcomplianceauditsthatwewillconductinfuture
years,beginningwith2015.Ourstrategyincludesaddingnewcomplianceauditmanagerstoourteam.
Thisteamwillberesponsibleforreviewingsocialcomplianceaudits,assessingrisksasdescribedabove,
anddevelopingareportingstructurethatinformsourbusinessdecisions.
• Our2015SustainabilityReportwillincludeamorein-depthreportonoursocialcomplianceactivities.
This will include our revised Vendor Code of Conduct, a description of our 2015 and beyond social
complianceauditstrategy,andourapproachtoidentifyingrisks.
These are theinitial steps that we willbe taking and weexpectour programtocontinuetoevolve
and develop based on new trends, input from suppliers, customers, government, and non-governmental
organizations.Webelievethattheseeffortsrepresentsignificantandpositivestepsforwardforourcompany’s
social compliance program.
Assuch,wedonotbelievethattherequestedreportwouldservetobenefitourshareholdersandthat
preparationofareportdifferentfromwhatwillbeincludedinoursustainabilityreportwoulddivertresources
thatotherwisecouldbemoreappropriatelyusedinthebestinterestofourshareholders.
Thisproposalcoversthesamesubjectmatterasonesubmittedtoavoteatthelastfouryears’annual
meetingsandwasdefeatedbyourshareholders.
SH A R E H O L D E R P R O P O S A L
( I T E M N O. 5 )
Wehavebeennotifiedbyfourshareholders,thenameandshareholdingsofwhichwillbefurnished
promptlytoanyshareholderuponwrittenororalrequesttoKroger’sSecretaryatourexecutiveoffices,that
theyintendtoproposethefollowingresolutionattheannualmeeting:
“WHEREAS:AportionofKrogerhousebrandproductpackagingisunrecyclable,includingplastics,which
are a growing component of marine litter. Authorities say that marine litter kills and injures marine life,
spreadstoxics,andposesapotentialthreattohumanhealth.
Plasticisthefastestgrowingformofpackaging;U.S.flexibleplasticsalesareestimatedat$26billion.Dried
fruit,frozenmeat,cheese,anddogfoodaresomeoftheKrogerhousebranditemspackagedinunrecyclable
plastic pouches. Private label items account for a quarter of all sales- nearly $20 billion annually. Using
unrecyclable packaging when recyclable alternatives are available wastes valuable resources. William
McDonough,aleadinggreendesignadvisor,callspouchpackaginga“monstroushybrid”designedtoendup
either in a landfill or incinerator.
Recyclabilityofhouseholdpackagingisagrowingareaoffocusasconsumersbecomemoreenvironmentally
conscious, yet recycling rates stagnate. Only 14% of plastic packaging is recycled, according to the.
Environmental Protection Agency (EPA). Billions of pouches and similar plastic laminates, representing