Outcome: Successfully withdrawn in recognition of the company’s recent progress in reducing food waste, its intention to report on its efforts, and a commitment to continued dialogue on the issue.
40% of food produced in the U.S. goes uneaten every year, costing the U.S. economy $218 billion, or 1.3% of GDP.
Approximately 23% of U.S. methane emissions (a greenhouse gas 80 times as potent as CO2) result from food decomposing in landfills. Production of uneaten food consumes 21% of freshwater, 19% of fertilizer and 18% of cropland. Globally, if food waste were a country, its emissions would rank 3rd. Food recovery programs can help feed the nearly 50 million food insecure Americans.
Wasted food presents financial opportunities; various retailers are implementing programs to save some of the $57 billion lost by consumer facing businesses each year. Stop & Shop saved an estimated $100 million annually by reducing losses of perishables while providing items that were 3 days fresher on average. Price Chopper reduced bakery item losses by $2 million in one year, while increasing sales by 3%.
The 400 members of The Consumer Goods Forum have committed to halve food waste by 2025. Safeway, Publix and Kroger have joined the Food Waste Reduction Alliance and have provided meaningful disclosure on their food waste management efforts. Costco briefly introduced the organic waste and rotisserie oil that it recycled in 2013, yet the opportunity remains for Costco to report on company-wide food waste diversion and management programs and set reduction goals.
The political landscape is shaping to favor companies that mitigate their food waste, too. Several states have laws that commonly require retailers to divert food waste from landfills, creating regulatory risk for those who lack adequate diversion strategies. At the federal level, food waste related bills have been introduced to Congress and the EPA announced a target to reduce food waste 50 percent by 2030.
Since 85% of food waste occurs at consumer facing businesses and in consumer’s homes, companies like Costco are positioned to benefit from working towards food waste prevention and strategic diversion that can cut costs, provide competitive advantage, strengthen brand reputation, save resources, alleviate hunger and reduce greenhouse gas emissions.
In light of these political and industry trends we believe Costco and its shareholders stand to benefit by taking advantage of these opportunities and managing associated risks.
Resolved: Shareholders request Costco issue a report, at reasonable cost and omitting proprietary information, on current company-wide efforts (above and beyond existing reporting) to assess, reduce, and optimally manage food waste.
Supporting Statement: Items to be covered in the report can include:
• Results of audits to determine the causes, quantities and destinations of food waste
• Estimated cost savings from optimized food purchasing, handling, and disposal
• Identification of additional revenue streams and possible tax benefits from new uses of previously wasted food
• Prioritization of strategies based on EPA’s Food Recovery Hierarchy
• Time bound targets to reduce waste and progress towards meeting these targets.