US Foods Holding Corp. | Managing Climate Risk Through Transition Planning at US Foods Holding Corp.

Status
AGM passed
AGM date
Previous AGM date
Resolution details
Company ticker
USFD
Resolution ask
Set targets or plans
ESG theme
  • Environment
ESG sub-theme
  • Climate change
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Consumer Staples
Company HQ country
United States
Resolved clause
RESOLVED : Shareholders request that US Foods publish a Climate Transition Action Plan, detailing how it will achieve its GHG reduction targets. This plan should: Exceed current disclosures, Be published at reasonable expense while excluding confidential information, Include progress updates and revisions on a regular basis.
Whereas clause
WHEREAS : The Intergovernmental Panel on Climate Change (IPCC) advises that greenhouse gas (GHG) emissions must halve by 2030 and reach net zero by 2050 to limit global warming to 1.5°C. The global food system contributes one-third of global GHG emissions, and unmitigated emissions threaten to derail efforts to meet this target. [1] US Foods Holding Corp. (US Foods) has set near-term GHG reduction targets with the Science Based Targets initiative, recognizing the business imperative of transitioning to a low-carbon economy. However, US Foods? 10-K highlights significant climate-related risks, including supply chain vulnerabilities, operational disruptions from evolving environmental regulations, and reputational risks tied to sustainability performance. A comprehensive Climate Transition Action Plan (transition plan) is essential to mitigate these risks, align with the company?s goals, and respond to increasing stakeholder expectations. While US Foods has made progress, gaps in ESG disclosures remain. For instance, detailed accounting of Scope 3 emissions?such as those within its supply chain?is lacking, and operational GHG data is insufficient. These gaps hinder the company?s ability to target reductions effectively and address emissions holistically. The absence of a clearly defined strategy aligned with a low-carbon economy underscores the need for a robust and prioritized transition plan, with governance mechanisms to monitor progress and ensure accountability. In contrast, competitors such as UNFI have taken proactive steps to support suppliers and address Scope 3 emissions. UNFI?s pilot program, "Climate Action Hub," aids farmers in transitioning to regenerative agriculture through financial and educational assistance. This includes offering three-year contracts to secure ingredient supply and generate off-take agreements, alongside hosting working groups on sustainable agriculture. These initiatives empower suppliers to adopt low-carbon practices and enhance resilience across the supply chain?an area where US Foods currently lags. [2] Additionally, Sysco has implemented programs such as Integrated Pest Management to reduce emissions and improve environmental practices across its supplier network. By adopting similar measures, US Foods can move beyond setting Science Based Targets and showcase tangible actions to support suppliers and drive sustainability at scale. [3] RESOLVED : Shareholders request that US Foods publish a Climate Transition Action Plan, detailing how it will achieve its GHG reduction targets. This plan should: Exceed current disclosures, Be published at reasonable expense while excluding confidential information, Include progress updates and revisions on a regular basis. SUPPORTING STATEMENT : To ensure the plan?s effectiveness, we recommend management consider frameworks and guidance from organizations such as: Task Force for Climate-Related Financial Disclosures (TCFD), CDP (formerly Carbon Disclosure Project), Transition Plan Taskforce, Climate Action 100+, We Mean Business Coalition. [1] https://www.ipcc.ch/sr15/ [2] https://discover.unfi.com/climateactionhub/ [3] https://investors.sysco.com/~/media/Files/S/Sysco-IR/documents/sustainability-reports/2023-Sustainability-Report.pdf

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