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Kroger outlines updated ESG action plan
Builds on Progress to Date to Drive Positive Impact
September 13, 2022
7 Min Read
The Kroger Co. ( NYSE: KR), America's largest grocery retailer, today outlined an updated Environmental, Social and Governance (ESG) action plan to support the company's comprehensive ESG strategy and published its annual ESG report.
"We live our purpose – to feed the human spirit – through Kroger's commitments to advance positive impacts for people and our planet and create more resilient global systems," said Rodney McMullen, Kroger's chairman and CEO. "We are proud to report that Kroger continues to make progress toward key ESG goals. I am especially proud of the Kroger team's collective effort to create communities free from hunger and food waste. Through Zero Hunger | Zero Waste, Kroger has donated billions of meals to help end hunger and millions of pounds of surplus fresh food to avoid waste. We are committed to expanding food access, affordability, and choice for all our customers."
As the centerpiece of its ESG strategy, Kroger's signature Zero Hunger | Zero Waste social and environmental impact plan emphasizes the unique role Kroger plays across the food system and its many stakeholders as an employer, food processor, retailer, healthcare provider and more. This month, Kroger is marking the fifth year of this signature initiative. To date, the company has directed 2.3 billion meals to communities, including $1 billion in charitable support and 500 million pounds of surplus fresh food rescued from Kroger stores to help end hunger.
Kroger's 2022 ESG Report: Nurturing Shared Values and other resources can be found at the ESG Hub, ESG Strategy: Thriving Together.
ESG Action Plan Updates
In addition to Zero Hunger | Zero Waste, Kroger continues to make progress toward key goals and strengthen commitments in several areas, most notably in climate impact, packaging, human capital management, human rights and animal welfare.
"With this updated action plan, we are seeking to address a wide range of complex social and environmental challenges, and setting ambitious impact targets," said Keith Dailey, Kroger's group vice president of corporate affairs and chief sustainability officer. "These commitments express Kroger's aspiration to make affordable fresh food even more accessible while advancing positive impacts for our communities and the planet. Our progress and commitments reflect our efforts to operationalize and integrate ESG performance into lines of business and develop a shared-value framework that creates positive outcomes for all stakeholders."
Climate Impact
Kroger formally committed to set a more aggressive greenhouse gas (GHG) reduction target aligned with the requirements of the Science Based Targets initiative (SBTi). The company's current 2030 goal is aligned with a well-below 2°C climate scenario; however, given the urgency for greater climate action, the goal will be strengthened to support a 1.5°C climate scenario. Kroger will also set a new Scope 3 goal for supply chain emissions reduction as part of its SBTi commitment.
The company will share a detailed project roadmap for achieving the current GHG reduction goal by the end of the 2022 fiscal year.
Packaging
Kroger completed an initial packaging baseline assessment to establish a plan to achieve its 2030 sustainable packaging goals, which include 100% recyclable, reusable and/or compostable Our Brands packaging by 2030. The baseline focused on grocery and fresh food products, as well as health, beauty, household supplies and cleaning items. Baseline findings show that 40% of in-scope Our Brands product packaging meets the company's definition of recyclable today when measured by weight.
Human Capital Management
Kroger's family of companies continues to offer accessible employment and economic advancement opportunities for more than 400,000 people across the U.S. Kroger has invested an incremental $1.2B in associate compensation and benefits since 2018, raising the average hourly rate to over $17/hour, and over $21/hour when comprehensive benefits like health care and pensions are included.
Human Rights
Kroger recently updated its Human Rights Policy to align with the United Nations Guiding Principles on Business and Human Rights (UNGPs). The company is in the process of developing a comprehensive human rights due diligence framework and implementation roadmap aligned with the UNGPs. This work will continue through 2022. The company also recently launched its first human rights impact assessment.
Animal Welfare
Kroger updated its Animal Welfare Policy and shared a detailed Animal Welfare Update to outline progress to date and roadmaps for future milestones.
The company published specific milestones to achieve its goal to source 100% of fresh pork sold in retail stores from suppliers that house sows in group housing systems by 2025. Kroger also outlined plans to invest $45 million in additional pricing, promotions and agreements to support the transition to a cage-free or higher-welfare egg supply, with specific milestones to reach 70% cage-free by 2030.
Following an announcement earlier this year, Kroger has partnered with Kipster Farms, the innovative egg production system founded in The Netherlands, to bring the world's first carbon-neutral, cage-free shell eggs to customers in the U.S. in 2023.
2021 Highlights
People: Help billions live healthier, more sustainable lifestyles
Increased the average wage for hourly store associates to over $17, bringing the rate to more than $22 per hour when comprehensive benefits are included.
Directed $343 million in charitable giving—including food and funds—to local and national non-profit organizations; of this, $210 million focused on improving food security in communities where we operate, reflecting the Zero Hunger | Zero Waste mission.
Directed 546 million meals to communities in food and funds in 2021, including 94 million pounds of surplus food donated through Kroger's Zero Hunger | Zero Waste Food Rescue program. Since introducing Zero Hunger | Zero Waste five years ago, the company has directed a total of 2.3 billion meals to communities toward its goal of 3 billion meals by 2025.
Delivered 1.1 million dietitian-approved meals to vulnerable populations.
Conducted research on how retailers can serve as important healthcare destinations, leveraging food and nutrition education to support shoppers and help them make healthful food purchases, resulting in a groundbreaking randomized controlled trial aimed at increasing diet quality and decreasing cardiovascular risk by promoting a heart-healthy diet through nutrition counseling provided by a registered dietitian.
Supported healthier lifestyles by offering a wide range of better-for-you and diet-aligned food options across retail stores and seamless experience, including our integrated OptUP app with nutritional ratings on thousands of items.
Increased access to fresh, affordable food for customers in existing and new geographies through the expansion of the Kroger seamless ecosystem and Kroger Delivery network.
Planet: Protect and restore natural resources for a brighter future
Achieved a 9.1% cumulative reduction in greenhouse gas (GHG) emissions from a 2018 baseline.
Installed infrared refrigerant leak-detection technology in 2,000 retail stores to date, to further reduce emissions.
Reduced total food waste generated in retail stores by 18.9% and improved food waste diversion rate by 21.7% since 2017.
Completed a comprehensive baseline product packaging footprint in 2022, finding that 40% of in-scope Our Brands product packaging is recyclable.
Sourced 16.9 million pounds of Fair Trade Certified™ ingredients for Our Brands products, up 4% from the prior year.
Sourced 94% of wild-caught seafood and 98% of farm-raised seafood in Kroger's seafood department from fisheries and farms meeting company's seafood sustainability requirements.
Systems: Build more responsible and inclusive global systems
Continued to operationalize the company's ESG strategy by integrating ownership and accountability for ESG goals into lines of business.
Increased the diversity and breadth of expertise on Kroger's board of directors and clarified board committee oversight of ESG topics.
Spent $4 billion with diverse suppliers and welcomed 230 new diverse-owned suppliers in 2021, an increase of 115% from the prior year, reflecting more than $500 million in incremental spend.
Offered extensive associate training on key governance topics, including business ethics and compliance; privacy; cybersecurity; food safety; diversity, equity and inclusion; and personal safety.
Secured Kroger's investment of $45 million in pricing, promotions and supplier agreements to achieve a sustainable transition to a cage-free or higher-welfare egg supply, with specific milestones to reach 70% cage-free by 2030.
About Kroger
At The Kroger Co. ( NYSE: KR), we are dedicated to our Purpose: to Feed the Human Spirit™. We are, across our family of companies, nearly half a million associates who serve over eleven million customers daily through a seamless digital shopping experience and 2,800 retail food stores under a variety of banner names, serving America through food inspiration and uplift, and creating #ZeroHungerZeroWaste communities by 2025. To learn more about us, visit our newsroom and investor relations site.
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