Mondelez International, Inc. | Third-party report on human rights policy at Mondelez International, Inc.

Status
AGM passed
AGM date
Previous AGM date
Proposal number
8
Resolution details
Company ticker
MDLZ
Lead filer
Wespath
Resolution ask
Report on or disclose
ESG theme
  • Social
ESG sub-theme
  • Conflict and/or violence
  • Human rights
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Consumer Staples
Company HQ country
United States
Resolved clause
Shareholders request the Board of Directors commission an independent third-party report, at reasonable cost and omitting proprietary information, assessing the effectiveness of the company’s implementation of its Human Rights Policy (HRP) for operations in conflict-affected and high-risk areas (CAHRA),(1) including Russia/Ukraine.
Whereas clause
Mondelēz commits to using the UN Guiding Principles on Business and Human Rights (UNGPs) to prevent and mitigate human rights risks.(2)The UNGPs call on companies to conduct heightened human rights due diligence (HRDD) in CAHRA due to widespread human rights abuses and violations of national and international law.(3) The European Union (EU) passed legislation on mandatory HRDD(4) and accounting standards bodies are calling on companies to report on material human rights risks.(5)The International Finance Corporation reports that companies in CAHRA “face business risks that are much greater than those in other emerging markets,” including destruction of assets, deaths and injuries, and supply-chain disruptions.(6) The Thinking Ahead Institute found 84 percent of the 26 largest investors named “geopolitical confrontation” as a top three systemic risk.(7)Mondelēz’s operations in Russia and Ukraine expose the company to material human rights risks. The United States and EU imposed an array of sanctions and export controls(8) against Russia and its state-owned businesses in response to the Ukraine invasion and associated credible accusations of war crimes.(9) Russia’s “partial mobilization” order requires companies to facilitate conscription of staff and provide support to the military upon request.(10) Mondelēz’s factory in Ukraine was damaged by a Russian military attack in March 2023(11) and the Ukrainian National Agency on Corruption Prevention designated Mondelēz an “international sponsor of war.”(12) The company faced backlash from customers,(13) employees,(14 )and civil society.(15) Mondelēz maintains exposure to other CAHRA, such as Brazil,(16) Côte D’Ivoire,(17) and Guatemala.(18)Mondelēz lags 200 American companies and industry peers in responding to the heightened risk of operating in Russia/Ukraine.(19) The Kyiv School of Economics estimates Mondelēz’s Russian operations generated $1.4 billion in revenue and $62 million in taxes in 2023.(20) Mondelēz sold 9,800 tons of Milka chocolate in Q1 of 2024, six times higher than the company’s projections,(21) and Mondelēz’s Russian consolidated net revenue slightly increased from 2023.(22) Despite claims Mondelēz made its Russian subsidiary “stand-alone with a self-sufficient supply chain,” the Russian entity allegedly remains connected to Mondelēz’s management system and Russian employees have access to staff in other regions.(23)Mondelēz’s activities in CAHRA may result in brand damage, violations of the company’s HRP and the UNGPs, and exposure to Russian sanctioned entities, warranting increased disclosure
Supporting statement
Shareholders seek information, at board and management discretion, through a report that: •Analyzes the effectiveness of the HRP’s assessment, mitigation, and reporting on human rights risks in CAHRA, including Russia and Ukraine.•Assesses if additional policies, practices, and governance measures are needed to mitigate risks.

How other organisations have declared their voting intentions

Organisation nameDeclared voting intentionsRationale
Rothschild & co Asset ManagementFor

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