THE KROGER CO. | Report on adopting a third-party mandated framework on U.S. farmers at THE KROGER CO.

Status
Filed
AGM date
Previous AGM date
Proposal number
5
Resolution details
Company ticker
KR
Resolution ask
Report on or disclose
ESG theme
  • Social
ESG sub-theme
  • Decent work
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Consumer Staples
Company HQ country
United States
Resolved clause
Shareholders request that Kroger report on how implementing worker-driven social responsibility (WSR) principles would impact the Company’s ability to identify and effectively prevent actual and potential human rights abuses, such as forced labor, in the agricultural supply chain.
Whereas clause
Kroger has developed corporate social responsibility (CSR) systems, partnerships, and voluntary responsible sourcing initiatives in response to heightened scrutiny over human rights risks in its agricultural supply chains. These risks include forced labor, human trafficking, gender-based violence, wage theft, and climate-related heat stress.1 Failure to effectively address these risks can create supply chain disruption, legal risks, or loss of customer trust and reputational harm for Kroger.2



CSR approaches like Kroger’s are designed to provide efficient human rights risk assessment and oversight in vast supplier networks. However, where abusive conditions are systemic, as is the case in agriculture, voluntary CSR regimes and social audits often fail to address persistent rights abuses.3 Kroger’s human rights partner, Ethical Food Initiative, certified berry farms in Mexico despite workers describing abusive practices that constitute forced labor, and the voluntary scheme was found to mask violations, hinder worker voice, and enable retaliation against workers.4



WSR is a more effective model that is led by workers, binding, responsive to emerging risks, and effective at prevention; it also includes independent monitoring and has grievance mechanisms and timely remediation.1 WSR models permit buyers to make decisions about sourcing and price directly with suppliers, as long as suppliers adhere to human rights standards and take corrective actions when needed. Companies incorporating WSR may benefit from supply chain resilience and labor force stabilization,2 and quicker identification and resolution of human rights risks.3



Kroger has been connected to recent major criminally prosecuted forced labor cases in the United States involving its supply chain.4 Kroger’s expansion of voluntary initiatives, whose structural flaws actually undermine Kroger’s ability to carry out its stated human rights objectives, is especially concerning in light of these revelations. When forced labor has been publicly linked to Kroger, it has not explained how its programs addressed these risks or outlined the consequences for violations. In contrast, when Safeway (Albertsons) was linked to violations of federal labor laws by a shared supplier, it publicly stated it ceased sourcing from them.5



WSR models, such as the Fair Food Program (FFP), are available in Kroger’s agricultural supply chain.6 The FFP is active in 23 states and dozens of crops and is expanding with support from the U.S. government and demand from supermarkets participating in the FFP including Kroger peers Walmart, Whole Foods, Giant, and Stop & Shop.7



An analysis evaluating the advantages and disadvantages of Kroger’s existing voluntary programs compared with WSR models would give shareholders confidence that Kroger is effectively managing its human rights responsibilities to mitigate legal, reputational, and human rights risks in its agricultural supply chain.”

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