The Kraft Heinz Company | Report on group housed pork at The Kraft Heinz Company

Status
21.29% votes in favour
AGM date
Previous AGM date
Proposal number
5
Resolution details
Company ticker
KHC
Lead filer
Individual
Resolution ask
Report on or disclose
ESG theme
  • Environment
  • Social
ESG sub-theme
  • Animal welfare
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Consumer Staples
Company HQ country
United States
Resolved clause
RESOLVED: Shareholders ask KHC to disclose its percent of group-housed pork in each main geographic region and establish measurable targets for “phasing out the purchase of pork from suppliers who use gestation stalls.”



Since it’s fair to infer that knowing the global percentage (which KHC reports) would require knowing the requested data, this strikes us as exceedingly straightforward. And given a decade of promises from Kraft/KHC, reestablishing targets seems reasonable.
Supporting statement
SUPPORTING STATEMENT: Dear fellow shareholders,



The 2023 “Transparency Trends” report from FMI (an industry trade group with a Kraft Heinz officer on its Board) found it’s “extremely important” to the vast majority of shoppers “that brands or manufacturers…are transparent,” with 74% saying that specifically means providing “values-based information such as [about] animal welfare.”



This proposal seeks such transparency.



As background: In 2012, Kraft Foods announced Oscar Mayer would move away from gestation stalls by 2022. These cages lock pregnant pigs into solitary confinement, keeping them from even turning around, whereas alternatives use group housing. Then, a shareholder proposal praising that commitment won 80% of the vote.



Since then, Kraft Heinz (KHC) has been promoting its own pledge.



● Its 2017 ESG report and 2018 proxy statement touted the “elimination of gestation stalls globally by 2025” and a 2018 “Post-Integration Update” referenced “100% gestation stall-free housing” by 2025.



● Elsewhere, from 2017 to 2021, KHC claimed it was working with suppliers in North America, giving preference to those that could help achieve its goal.



● And its 2023 ESG Report assures shareholders it’s “phasing out the purchase of pork from suppliers who use gestation stalls.”



Doing so would make sense, since (in addition to the substantial ethical implications) animal welfare poses material risks that can jeopardize the delivery of durable financial returns. Since 2016, KHC’s even been doing animal welfare “risk assessments.” Its 2021 proxy statement called animal welfare one of the ESG “issues that matter most” to its business and stockholders. And “animal welfare” appears 30 times in its 2017 ESG report, nearly 50 in the 2020 report, almost 70 in the 2021 report, and nearly 100 in the 2022 and 2023 reports.
But when examining KHC’s progress reporting, concerns arise.



● From 2017 to 2021, KHC touted: “In Europe, our supply has already met [our group housing] goal.” And its 2023 ESG Report boasts 98% compliance in Europe and 24% globally.



● What KHC doesn’t mention is that since 2013, E.U. law has mandated group housing; it also doesn’t disclose what portion of its global 24% is from the E.U.



● Further, no measurable progress whatsoever is disclosed for any other geographic operating region—including North America (despite KHC’s yearslong purchasing preference there).

Filed by the Accountability Board.

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