Civil Rights Audit

Resolution Text

RESOLVED: That shareholders of United Natural Foods, Inc. (the “Company’ or “UNFI”), urge the Board of Directors to oversee a third-party audit analyzing the adverse impact of UNFI’s policies and practices on the civil rights of company stakeholders, above and beyond legal and regulatory matters, and to provide recommendations for improving the Company’s civil rights impact. Input from civil rights organizations, employees, customers, and other stakeholders should be considered in determining the specific matters to be analyzed. A report on the audit, prepared at reasonable cost and omitting confidential or proprietary information, should be publicly disclosed on UNFI’s website.

SUPPORTING STATEMENT:

Recently, the racial justice movement together with the disproportionate impacts of the COVID-19 pandemic have focused the public’s and policy makers’ attention on civil rights and gender and racial equity issues. In response to the racial justice protests, UNFI launched the “UCount” campaign, an initiative to refresh the Company’s demographic data, subsequently establishing the “UNFI Diversity and Inclusion Strategic Plan.” UNFI has stated goals for filling 50% of management roles, defined as “associates in supervisor roles and above/’ with associates from “underrepresented groups” by 2023 and increasing annual spend with diverse suppliers to 3% by 2023 (currently at 1%).

These efforts, and their associated disclosures, are commendable but insufficient. That is why we recommend an independent audit of the sort conducted in recent years at companies such as Starbucks and Airbnb. An independent audit conducted by persons with broad civil rights expertise, would examine not simply employment statistics, but any companies practices or policies that may unconsciously contribute to disparities and undercut achievement of UNFI ‘s stated goals of diversity and inclusion.

Moreover, current disclosures are inadequate for assessing the efficacy of the Company’s current practices and commitments. For instance, there is no explanation of how the Company came up with its 2023 diversity goal, why it appears to be aggregating ethnicity and gender representation in a single goal (covered by the term “underrepresented”) or why it excludes retail associates from its diversity metrics and goals. In addition, a breakdown of ethnic and gender diversity across the company is provided only at a high level of generality — a comparison between “associates in supervisor roles and above” and the overall workforce – and provides no breakdown for company executives.

Taken on their own terms, the statistics are nevertheless worrisome. For instance, almost half the U.S. workforce is racially diverse, yet three quarters of managers are white.

Against this backdrop, a third-party audit would help assess the effectiveness of the Company’s stated goals and examine more closely any practices that could affect racial and gender equity, inclusion, and diversity at various levels throughout the company.