Pizza Hut 2012 Annual Report Download - page 44

YUM! BRANDS, INC.-2013Proxy Statement26
Proxy Statement
ITEM5SHAREHOLDER PROPOSAL REGARDING PACKAGING RECYCLING
Management Statement in Opposition to Shareholder Proposal
What is the Company’s position regarding this proposal?
The Board of Directors recommends that
shareholders vote AGAINST this proposal.
YUM is committed to being a responsible global citizen and
developing a long-term strategy to reduce our impact on the
environment and in our communities. An important component
of our long-term strategy is providing environmentally-preferable
food packaging to our consumers, while maintaining our ability
to serve food safely, quickly and conveniently through the use
of disposable packaging. Our food packaging is consistent with
standardized packaging available in our industry; however, we want
to go even further. We recognize that addressing our packaging
impact is important to our shareholders and imperative for the
long-term sustainability of our business.
We have published Sustainable Sourcing and Waste Recovery
Principles that articulate our move toward sustainable sourcing
of paper and paper-based packaging products and increasing
the amount of recycled contents in our packaging, as permitted
by regulatory authorities and technical effi ciencies. To show our
commitment, we are working with the Food Packaging Institute
(FPI) on its paper recovery efforts. We are also a founding member
of the Paper Recovery Alliance (PRA) and in this role we have
the opportunity to infl uence the infrastructures of, and build
scale for, future paper recovery projects. We also work with key
waste providers on recovery/recycling market tests. Our Brands
continue to work with our suppliers on innovation in sustainable
packaging that, where allowable by law, would increase the amount
of recycled content.
In addition, our Brands inside and outside of the U.S. are developing
initiatives directed specifi cally toward sustainable food packaging and
including greater recycled content:
• Pizza Hut U.S.’s, packaging includes 95% fi ber sourced from
certifi ed forests or recycled sources by weight and, after its
packaging is used, 98% of the materials are capable of being
recycled.
• Our KFC United Kingdom team has increased the recyclability
of the KFC bucket by eliminating the bucket’s plastic coating,
moved to napkins that are made from 100% recycled fi ber
sources and changed foil wrappers for certain food products to
paper wrappers that are 100% recyclable and biodegradable.
• KFC U.S., in 2011, reduced plastic packaging in the KFC U.S.
system from 40% to 28% by weight, purchased 78% of all new
wood fi ber products from third–party certifi ed sources and made
25% of all paper packaging from recycled content.
More information on our recycling, packaging and other
sustainability and corporate social responsibility efforts in general
may be found in our 2012 Corporate Social Responsibility report
at www.yum.com/CSR.
Why does the Company oppose the proposal?
The proponent’s shareholder proposal requests a comprehensive
on-premises recycling strategy for packaging as well as aggressive
recycling and recycled content goals. YUM does not believe in
“green washing” and, unfortunately, there is currently insuffi cient
infrastructure to support recycling of food-service packaging.
FDA regulations limit the amount of recycled content within food
packaging in the U.S. and in some of our large foreign markets
recycled content is not permitted in food service packaging. In
addition, there is insuffi cient education within the U.S. around
proper recycling. The waste within our restaurants has to be
properly sorted by consumers to prevent contamination and the
product mix of restaurant waste has a level of contamination
that most material recovery facilities cannot process currently.
YUM is actively doing its part to work through these challenges
but, ultimately, proper food-service recycling is an industry-wide
challenge that we believe needs to be worked on collectively. As
a founding member of Paper Recovery Alliance, YUM is helping
shape that conversation. We oppose this proposal because as
described above YUM already is developing goals and implementing
initiatives related to recycling as part of its long-term strategy.
Adoption of the proponent’s proposal will cost the Company
money and resources but would be duplicative of YUM’s continued
efforts and will not further YUM’s strategy in any meaningful way.
What vote is required to approve this proposal?
Approval of this proposal requires the affi rmative vote of a majority of the shares present in person or represented by proxy and entitled
to vote at the Annual Meeting.
What is the recommendation of the Board of Directors?
The Board of Directors Recommends That You Vote AGAINST This Proposal.