KROGER OUTLINES ITS PRIORITIES, IMPROVEMENTS IN 2020 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
Aug. 19, 2020
Source: Kroger news release
Cincinnati - The Kroger Co. (NYSE: KR) today released its 2020 Environmental, Social and Governance (ESG) Report, highlighting progress toward its sustainability goals and confirming the company's commitment to creating communities free of hunger and waste.
Kroger's 2020 report leads with an updated materiality assessment, outlining the ESG topics most meaningful to the company's key stakeholders. The in-depth assessment, conducted in partnership with an external consultancy in early 2020, resulted in an updated list of priority topics.
"Our annual ESG report underpins Kroger's vision to serve America through food inspiration and uplift," said Rodney McMullen, Kroger's chairman and CEO.
"We are committed to continuing to integrate ESG metrics into our business strategy, driving shared value for our associates, customers, communities and company. We're pleased to share Kroger's latest performance on key topics, including our 2020 sustainability goals and Zero Hunger | Zero Waste metrics. We also look to what lies ahead, and we're proud to announce the first of several new priorities and commitments that will help affirm Kroger's sustainability leadership through the next decade and beyond," said McMullen.
Kroger's 2020 ESG Report Highlights
"As the largest grocery retailer in America, Kroger is committed to being a force for good in the communities we serve," said Keith Dailey, group vice president of corporate affairs and chief sustainability officer. "Our Purpose-to Feed the Human Spirit-continues to guide how we operate our business, care for our communities and deliver value to all our stakeholders. We're proud of our progress in 2019 and remain committed to our vision of a future with Zero Hunger | Zero Waste."
Among the several topics highlighted in the company's 2020 materiality assessment, 12 emerged as the most meaningful to Kroger's key stakeholders. These important issues shaped the content of Kroger's annual ESG report and will continue to guide the company's management approach in the year ahead.
• Food Waste
In 2019, Kroger reduced retail food waste generated by 4% and improved food waste diversion from landfills by 5%. Since introducing Zero Hunger | Zero Waste in 2017, the company has reduced total retail food waste generated by 13% through strategic ordering best practices, item markdown programs and innovative supply chain initiatives.
Since 2017, Kroger's store associates have also improved food waste diversion from landfills by 18% through increased food waste recycling, including (in order of priority) animal feed, anaerobic digestion and composting programs for food that is no longer edible. The company's goal is to achieve zero food waste by 2025.
For more on the impact of Kroger's regional food waste recycling programs, visit here.
Kroger continues to bring sustainable packaging solutions to customers through collaborative partnerships in the retail sector and beyond. In 2019, Kroger became the exclusive U.S. grocery retail partner for Loop, TerraCycle's revolutionary reusable packaging platform.
As part of Kroger's commitment to phase out single-use plastic shopping bags in its stores by 2025, the company recently became the Grocery Sector Lead Partner for Closed Loop Partners' Beyond the Bag Initiative-a multi-year collaboration across retail sectors to identify, test and implement alternatives to the traditional single-use plastic retail bag.
• Climate Impact
Kroger continues to manage its climate impacts through strategic investments in energy efficiency, refrigerant emissions reductions and renewable energy. In 2019, the company activated its largest solar array to date at Kroger's automated distribution center in Paramount, Calif., and installed a 2,900-solar-panel array at La Habra Bakery in California that will offset 20% of the facility's electricity needs.
• Food Safety
In 2019, Kroger announced its plan to standardize date labels for Our Brands food products, providing simpler, easier-to-understand product quality and safety information as part of its Zero Hunger | Zero Waste social impact commitment.
Kroger's manufacturing plants and co-packing suppliers are now aligned with the standardized date labeling practice of "Use by" to indicate food safety and "Best by" to indicate quality for Our Brands products.
• Food Access
Kroger's Zero Hunger | Zero Waste social impact plan is committed to creating communities free of hunger and waste by bringing attention and resources to the complex issues surrounding food insecurity and increasing the availability of affordable and nutritious food for all.
In 2019, Kroger directed the equivalent of 493 million meals to improve food security in the communities it serves, including food and funds donated to Feeding America and its affiliated local food banks and other key hunger-relief partners. This brought the company's total to 1.1 billion meals, surpassing its three-year target.
• Health & Nutrition
Kroger Health's Food as Medicine strategy aims for 20x5by2025: 20% improvement in five critical dimensions of population health: obesity, diabetes, food insecurity, cost and product assortment by 2025.
• Diversity, Equity & Inclusion
Kroger invested nearly $3.4 billion with minority- and women-owned businesses in 2019-a 12% increase from the prior year and a 30% increase since 2017. The company also received a perfect score of 100 on the Human Rights Campaign's Corporate Equality Index for the second consecutive year.
To learn more about the steps Kroger is taking to advocate for racial equity, visit the company's Better Together page.
• Associate Health & Safety
Managing health and safety is critical to the company's success. Each part of the business-Retail Operations, Manufacturing and Supply Chain-has its own management structure to help minimize incidents in its operations.
In response to the COVID-19 pandemic, Kroger has reinforced the continued protection of frontline associates by making free COVID-19 testing available, based on symptoms and medical need. The following procedures and programs further reflect Kroger's commitment to protecting the safety and well-being of its team.
- Personal Protective Equipment (PPE) - Kroger has increased its investment in PPE to encourage a safer working environment. The company has supplied protective masks to all associates, enhanced daily sanitation practices, installed floor decals and protective partitions at check lanes to promote physical distancing, reduced customer capacity limits, and taken several other steps.
- Helping Hands Fund - Kroger's Helping Hands Fund continues to provide financial assistance to associates who are facing personal hardship due to COVID-19.
- Emergency Leave - Through the company's Emergency Leave Guidelines, associates most directly affected by the virus or experiencing related symptoms are provided paid time off.
• Community Engagement
Kroger and its affiliates directed more than $279 million in food and funds to local communities in 2019. Of this, $205 million aligned with the company's Zero Hunger | Zero Waste social impact plan and hunger relief programs.
In 2019, The Kroger Co. Foundation, the company's private foundation, directed more than $10.5 million in grants to its nonprofit partners. The Kroger Co. Zero Hunger | Zero Waste Foundation, an independent nonprofit public charity, also directed $10 million to catalyze change and innovation that helps create communities free of hunger and waste, including $1 million in grants to seven innovators with solutions to reduce food waste.
The 2019 Foundation reports are available at TheKrogerCo.com/Community.
• Responsible Sourcing
Kroger continues to make progress toward its goal to source 100% sustainable wild-caught and farm-raised seafood. In 2019, the company supported 25 Fishery Improvement Projects through sourcing or funding and, through its partnership with World Wildlife Fund (WWF), increased the amount of sustainable wild-caught seafood sourced by 198% between 2010 and 2019.
Learn more in the Kroger Seafood Sustainability Report.
• Supply Chain Accountability
Kroger actively manages its global supply chain through Supplier Hub, its vendor management system. The platform enables Kroger to more easily collect and maintain important information about its suppliers' compliance with company commitments, including U.S. food safety standards, facility audit outcomes, certifications and relevant company initiatives.
Kroger recently established a new business team to implement a more holistic approach to supplier lifecycle management. The cross-functional Supplier Solutions team is developing new ways to speed up suppliers' "time to market" with Kroger through seamless navigation of the company's supplier-facing portals and simplified vendor processes.
• Data Privacy & Cybersecurity
The Kroger Family of Companies operates in a highly competitive, increasingly complex and ever-changing business environment. To safeguard systems and information, it continually upgrades security governance and protocols to reflect changes in technology, potential risks and business needs.
Earlier this year, Kroger Technology & Digital was named to Computerworld magazine's Top 100 Best Places to Work in IT for the third consecutive year.
New & Updated Sustainability Commitments
As part of the company's 2020 ESG report, Kroger formalized and refined several key sustainability commitments that align with stakeholder priorities, including:
• Sustainable Packaging: For all Our Brands products, Kroger will improve packaging by 2030 in the following ways:
- Complete a baseline product packaging footprint to fully understand current packaging impacts.
- Seek to achieve 100% recyclable, compostable and/or reusable packaging for Our Brands products.
Increase recycled content in packaging so that the Kroger Our Brands portfolio - collectively contains at least 10% recycled content in packaging.
- Reduce unnecessary packaging.
- Increase awareness among Kroger customers about how to properly manage Our Brands product packaging at end of life.
• Greenhouse Gas Reduction: Kroger commits to reduce its absolute enterprise-wide greenhouse gas emissions by 30% by 2030, from a 2018 base year.
• No-Deforestation Commitment: Kroger is committed to eliminating tropical deforestation in the raw materials and products it sources into Kroger Manufacturing facilities and into its fresh meat case by 2025.
Kroger's Response to COVID-19
"Since the start of the COVID-19 pandemic, we have remained focused on our most urgent priority-to provide a safe environment for associates and customers with open stores, comprehensive digital solutions and an efficiently-operating supply chain so that our customers have access to fresh, affordable food and essentials," continued McMullen. "Kroger's response to the COVID-19 pandemic has uplifted our purpose, values and vision, and I'm confident we will emerge from this crisis even stronger."
The Kroger Family of Companies has invested more than $830 million to reward associates and safeguard associates, customers and communities so far in 2020. Key actions to support associates, customers and communities include:
• The company, The Kroger Co. Foundation and The Kroger Co. Zero Hunger | Zero Waste Foundation have committed more than $10 million in grants to support communities during the COVID-19 pandemic. The grants are funding local nonprofit partners that help ensure individuals and families have access to nutritious meals.
• Continuing to donate food and funds to local food banks and advance hunger-relief efforts like Kroger's Dairy Rescue Program.
• Offering free curbside pickup nationwide (a value of $4.95 per order) with no minimum order threshold and accepting SNAP/EBT benefits for grocery pickup service at across the Kroger Family of Stores.
• Temporarily waiving fees for prescription delivery via mail or courier.