DEAR FELLOW SHAREHOLDERS:

Food waste is highly material: Loblaw’s own materiality assessment placed it as a top issue years ago,1 BlackRock says the need to lower food waste “has never been greater,” ISS has called it “a growing area of concern,” and Glass Lewis says it causes “significant expense” for companies.

Further, SASB’s article titled Wasted Food is Wasted Money reported that “[d]ata across 700 companies in food manufacturing, food retail, hospitality, and food services in 17 countries found that 99% of sites saw a positive return on investment in preventing food waste, with a median benefit-cost ratio of 14:1.” That is, “for every dollar spent to prevent waste, the site recognised $14 in avoided costs.”2

However, concerns arise about Loblaw’s reporting—particularly, that it doesn’t disclose how much food waste it generates. In fact, we emphasize here Loblaw’s annual responses to SASB’s “Amount of Food Waste Generated” metric:

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By contrast, for example, METRO has already been disclosing baseline totals (from corporate/franchised stores, and distribution centers) for several years.3

Moreover, Loblaw’s failure to do so is especially troubling given its goal of sending “zero food to landfill by 2030” from all locations, “including franchise and associate-owned store operations.”

Further, although Loblaw does disclose various food waste diversion data—it does so by weight (not percentage), and without an overall baseline. To analogize: Imagine a company touting a goal to pass 100% of safety audits, but reporting only the number passed without the number conducted.

Indeed, disclosing diversion data with no baseline just highlights the absence of this fundamental information needed to assess Loblaw’s reduction performance and the effectiveness of its food waste management.

We recognize this issue’s complexity; but it’s also highly financially material. And whatever Loblaw may claim about the status of its baseline data, given its repeated annual promises that the information is forthcoming but failure to actually produce it, we think the time has come for shareholders to now weigh in. Thank you.

www.bit.ly/LoblawMaterialityAssessment
Study conducted by Champions 12.3, whose leadership includes several leading CEOs and the United Nations Food & Agriculture Organization’s Chief Economist.
www.bit.ly/MetroFoodWasteData