Shareholders withdraw their proxy proposal as company begins a formal human rights due diligence process in line with UN Guiding Principles.
NEW YORK, NY, WEDNESDAY, MAY 5TH, 2021 – Members of the Interfaith Center on Corporate Responsibility (ICCR) have withdrawn a proposal asking Kraft Heinz Co (KHC) to publish a Human Rights Impact Assessment (HRIA) to “mitigate against significant operational, financial, and reputational risks associated with negative human rights impacts throughout its supply chain”. The company committed to conducting a HRIA consistent with the UN Guiding Principles on Business and Human Rights (UNGPs). The UNGPs, considered one of the leading global standards for best-practice corporate human rights performance, make clear a company’s responsibility to “know and show” its human rights risks.
Said Brother Robert Wotypka of the Province of St. Joseph of the Capuchin Order who filed the resolution, “While we look forward to the company publicly disclosing more details, we are encouraged that Kraft Heinz has adopted the UNGP methodology and is moving forward with the due diligence process to address its most salient human rights impacts.”
In its ESG materiality assessment, Kraft Heinz ranked human rights as among the issues with the greatest impact on the company and of most importance to its stakeholders. Know the Chain has identified tomatoes, cattle, and coffee being sourced by Kraft Heinz as having a high risk of human rights abuses. The company published a Global Human Rights Policy in response to an earlier shareholder proposal filed by the Capuchins. Kraft Heinz undertook a global human rights risk assessment last year with third-party assistance, assessing nearly all of its ingredient food purchases.
“To ensure its supply chain is free of forced labor, it is critical the company understand where its highest risks are in order to mitigate them,” said Natalie Wasek of Seventh Generation Interfaith Coalition for Responsible Investment who helps coordinate the engagement with Kraft Heinz. “We are encouraged that Kraft Heinz will undertake third-party due diligence audits prioritizing the most problematic countries and commodities identified in its risk assessment. It acknowledged that social audits are not designed to capture sensitive labor and human rights violations such as forced labor and harassment. Due diligence requires engaging workers in a meaningful way to determine root causes and address remediation and capacity building.”
“The UNGPs expect companies to know and show that they respect human rights,” said Camille Le Pors of the Corporate Human Rights Benchmark. “They cannot do so without having a robust human rights due diligence process in place and being transparent about it. Human rights due diligence, as the process companies are expected to follow to identify and manage their human rights risks and impacts, is at the heart of any good approach to managing human rights. It should be systematic and updated regularly, to account for changes to a company’s operations, business partners and environment.”
Said Rashida La Lande of Kraft Heinz, “The Kraft Heinz Company is committed to excellence in environmental social governance, continuous improvement and responsible corporate practices throughout our entire value chain, including our supply chain. Our Global Human Rights Policy is guided by the most credible internationally recognized standards and reflects our core values of deferential human rights for all people, and zero-tolerance for human rights violations. We are emboldened by values-driven partnerships to further effectuate positive change and transparency in this space, and appreciate the engagement we have had with the Interfaith Center on Corporate Responsibility.”
“We will continue to work with Kraft Heinz, particularly in the area of enhanced disclosures on its implementation plans and audit findings,” said Brother Wotypka. “We would like to see the company dramatically improve its Corporate Human Rights Benchmark score and become a leader among its peers in respecting human rights.”
About the Interfaith Center on Corporate Responsibility (ICCR)
Currently celebrating its 50th year, ICCR is the pioneer coalition of shareholder advocates who view the management of their investments as a catalyst for social change. Its 300-plus member organizations comprise faith communities, socially responsible asset managers, unions, pensions, NGOs and other socially responsible investors with combined assets of over $USD 4 trillion. ICCR members engage hundreds of corporations annually in an effort to foster greater corporate accountability. Visit our website www.iccr.org and follow us on Twitter, LinkedIn and Facebook.