<SEC-DOCUMENT>0001214659-17-003648.txt : 20170530
<SEC-HEADER>0001214659-17-003648.hdr.sgml : 20170529
<ACCEPTANCE-DATETIME>20170530060338
ACCESSION NUMBER:		0001214659-17-003648
CONFORMED SUBMISSION TYPE:	PX14A6G
PUBLIC DOCUMENT COUNT:		2
FILED AS OF DATE:		20170530
DATE AS OF CHANGE:		20170530
EFFECTIVENESS DATE:		20170530

SUBJECT COMPANY:	

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			KROGER CO
		CENTRAL INDEX KEY:			0000056873
		STANDARD INDUSTRIAL CLASSIFICATION:	RETAIL-GROCERY STORES [5411]
		IRS NUMBER:				310345740
		STATE OF INCORPORATION:			OH
		FISCAL YEAR END:			0203

	FILING VALUES:
		FORM TYPE:		PX14A6G
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-00303
		FILM NUMBER:		17875509

	BUSINESS ADDRESS:	
		STREET 1:		1014 VINE ST
		CITY:			CINCINNATI
		STATE:			OH
		ZIP:			45201
		BUSINESS PHONE:		5137624000

FILED BY:		

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			AS YOU SOW
		CENTRAL INDEX KEY:			0001086462
		IRS NUMBER:				000000000

	FILING VALUES:
		FORM TYPE:		PX14A6G

	BUSINESS ADDRESS:	
		STREET 1:		311 CALIFORNIA STREET
		STREET 2:		SUITE 510
		CITY:			SAN FRANCISCO
		STATE:			CA
		ZIP:			94104
		BUSINESS PHONE:		415-391-3212

	MAIL ADDRESS:	
		STREET 1:		311 CALIFORNIA STREET
		STREET 2:		SUITE 510
		CITY:			SAN FRANCISCO
		STATE:			CA
		ZIP:			94104
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</font> PROXY MEMORANDUM</div>

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<div style="FONT-SIZE: 14pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: center">Report on Benefits of Adopting Renewable Energy Targets</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: center">Kroger Company Annual Meeting June&#160;22, 2017<br>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Notice of Exempt Solicitation Pursuant to Rule 14a-103</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">Name of the Registrant: <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">The Kroger Company</font></div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">Name of persons relying on exemption:&#160;<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; FONT-STYLE: italic">As You Sow</font></div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">Address of persons relying on exemption: <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">1611 Telegraph Ave., Suite 1450, Oakland, CA 9461</font>2</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">Written materials are submitted pursuant to Rule 14a-6(g)(1) promulgated under the Securities Exchange Act of 1934.&#160;Submission is not required of this filer under the terms of the Rule, but is made voluntarily in the interest of public disclosure and consideration of these important issues.</div>

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<div style="FONT-SIZE: 14pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">SUMMARY</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">The Kroger Company is the 3rd largest global retailer, exceeding $109 billion in revenue. Based on its 2016 Carbon Disclosure Project (CDP) reporting, Kroger&#8217;s greenhouse gas emissions are larger than the emissions of nearly one hundred countries.<sup style="vertical-align: text-top; line-height: 1; font-size: smaller;FONT-FAMILY: 'Times New Roman', serif">1</sup> Investors are concerned that Kroger is not adequately addressing its globally significant carbon emissions. To mitigate carbon risk, reduce costs, and add long term value, a growing number of corporations are sourcing their own renewable energy, forty-nine of which have committed to move toward 100% renewable energy sourcing. In contrast to its peers, Kroger Corporation continues to make little significant forward progress on reducing the scope and intensity of its carbon emissions or in improving shareholder value through renewable energy adoption. This shareholder resolution requests Kroger take a first step toward renewable energy adoption by assessing the climate change risk reduction benefits of adopting renewable energy targets. Proponents urge a &#8220;Yes&#8221; vote on the proposal.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left; MARGIN-LEFT: 18pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">RESOLVED CLAUSE: </font>Shareholders request Kroger produce a report assessing the climate change risk reduction benefits of adopting quantitative, enterprise-wide targets for increasing its renewable energy sourcing. The report should be produced at reasonable cost and exclude proprietary information.</div>

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<div style="TEXT-ALIGN: left; MARGIN-LEFT: 18pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">Supporting Statement:</font> Shareholders request the report also include discussion of the business risk Kroger faces from climate change; the potential for renewable energy procurement to reduce such risk; and options for increasing renewable energy adoption.<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"><br>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left"><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">1</sup>&#160;<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">2016 Sustainability Report: Improving Today to Protect Tomorrow</font>, (Kroger Corporation, 2016), p.81, http://sustainability.kroger.com/pdfs/kroger-2016-csr.pdf<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #0000ff"><u>. </u></font>(emissions data)<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #0000ff"><u>; </u></font>&#8220;International Energy Statistics,&#8221; U.S. EIA, accessed May 26, 2017, http://www.eia.gov/cfapps/ipdbproject/IEDIndex3.cfm?tid=90&amp;pid=44&amp;aid=8.| <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">Raw data, sorted, based on 2014 emissions, the most recent year of data available, to show all countries below 6.6 million mtCO2e</font><br>
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<div style="FONT-SIZE: 14pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">RATIONALE FOR YES VOTE</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">Climate change poses risks to Kroger that remain insufficiently addressed; increasing renewable energy adoption will reduce those risks and benefit the company. </font>Despite commitments to sustainability, Kroger's carbon footprint remains enormous and the Company's actions to address its climate impact have been meager in comparison to other companies. Accelerating renewable energy adoption offers the Company an important means by which it can reduce risk and protect shareholder value into the future.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">Kroger significantly trails peers on reducing climate impacts and renewable energy adoption. </font>Kroger&#8217;s carbon emissions have continued to rise since 2012, its carbon reduction measures have been anemic, and Kroger&#8217;s renewable energy adoption is negligible compared to its peers. The Company&#8217;s lack of substantial action on this issue suggests Kroger&#8217;s underestimates the serious risks its environmental underperformance poses to the Company&#8217;s reputation, relevance, and ongoing competitiveness.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">Kroger fails to disclose information allowing shareholders to assess how, or whether, the Company is adequately addressing carbon risk or developing a renewable energy portfolio into the future. </font>The Company&#8217;s recent Sustainability and Carbon Disclosure Project (CDP) reporting remain confusing and unclear, providing data with moving baselines and targets that, while appearing to be significant, actually encompass only slight improvements. The only discussion of future renewable energy adoption is a statement that three Fry&#8217;s stores will be adopting solar.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">DISCUSSION</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">Climate change poses risks to Kroger that remain insufficiently addressed; increasing renewable energy adoption will reduce those risks and benefit the company. </div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">In contrast to most companies today, neither Kroger&#8217;s 2017 annual report, nor its proxy statement mention climate change, climate risk, or consider the risk related to its energy sourcing. In contrast, retailers like Walmart, Target,<sup style="vertical-align: text-top; line-height: 1; font-size: smaller;FONT-FAMILY: 'Times New Roman', serif">2</sup> and Costco have recognized the material costs that climate change has on their business. In Costco&#8217;s 2016 10-K, Costco acknowledged that <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">&#8220;climate change could affect our ability to procure needed commodities at cost and in quantities we currently experience.&#8221;</font><sup style="vertical-align: text-top; line-height: 1; font-size: smaller;FONT-FAMILY: 'Times New Roman', serif">3</sup></div>

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<div>Kroger&#8217;s carbon-equivalent emissions (CO2e or &#8220;carbon&#8221;) are increasing.<sup style="vertical-align: text-top; line-height: 1; font-size: smaller;FONT-FAMILY: 'Times New Roman', serif">4</sup> As its absolute emissions increase, its carbon risk increases, creating escalating risks to shareholders and the potential for limiting of future returns. Customers are increasingly preferential to companies that are pro-active on climate and on measures such as renewable energy adoption; in choosing companies at which to shop, environmental reputation matters. Regulatory risk also increases for companies that are not proactive. State and local governments, which bear the brunt of climate impacts are increasingly adopting carbon reduction measures. As climate impacts increase, the likelihood of more stringent regulations increases. Kroger&#8217;s significant contributions to global warming also amplify risk factors for physical assets and supply chain access.<sup style="vertical-align: text-top; line-height: 1; font-size: smaller;FONT-FAMILY: 'Times New Roman', serif">5</sup> From heat waves, to stronger and more frequent storms, to greater numbers of pests and droughts, Kroger&#8217;s own plant, operations, and employees are subject to these types of harms. Kroger&#8217;s worldwide supply chains, which are often less resilient, are increasingly at risk of disruption from climate change.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left"><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">2</sup> Fred Bedore, &#8220;How We&#8217;re Staying On Track to Fight Climate Change,&#8221; Wal-Mart Stores, Inc., February 16, 2017, http://blog.walmart.com/sustainability/20170216/how-were-staying-on-track-to-fight-climate-change; <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">Climate Change 2016 Information Request Target Corporation</font>, (CDP, May 17, 2016), section 2.2a, https://corporate.target.com/_media/TargetCorp/csr/pdf/CDP-Response-ClimateChange-2015.pdf.</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left"><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">3</sup>&#160;<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">2016 10-K</font>, (Costco Wholesale Corporation, 2016), p.12, http://investor.costco.com/mobile.view?c=83830&amp;v=200&amp;d=3&amp;id=9848129.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left"><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">4</sup> see: <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">Kroger Sustainability Reports</font>&#160;<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">2013</font> to <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">2016</font>, GRI Sustainability Disclosure Database. Available at: http://database.globalreporting.org/organizations/4022/ | <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">Kroger&#8217;s emissions have increased from approximately 6.1 million to 6.6 million mtCO2e between 2012 and 2015</font></div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left"><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">5</sup> Richard Gledhill et al., <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">Business-not-as- usual: Tackling the impact of climate change on supply chain risk</font>. (PwC, 2013), http://www.pwc.com/gx/en/governance-risk-compliance-consulting-services/resilience/publications/pdfs/issue3/business_not_as_usual.pdf.<br>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">Proactively managing carbon risk yields improved financial performance according to research from CDP&#8212;when corporations track, manage, and reduce carbon impacts, various financial indicators improve, including improved return on equity, stronger dividends, lower earnings volatility, reduced emissions, and reduced regulatory risk.<sup style="vertical-align: text-top; line-height: 1; font-size: smaller;FONT-FAMILY: 'Times New Roman', serif">6</sup> The same report identifies business benefits of carbon reduction through renewable power including power price certainty, responsiveness to customer demand for low carbon solutions, and reduced overhead.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">Benefits of installing renewable energy include permanent energy price stability, enhanced reputation among customers, and reduced regulatory uncertainty from climate change regulations that are likely to impact operations and/or future fossil fuel energy costs.</font> It comes as no surprise that major brands including Whole Foods, GM, Coca-Cola, Walmart, Nestle, Nike, Johnson &amp; Johnson, and Starbucks have made commitments toward 100% Renewable Energy.<sup style="vertical-align: text-top; line-height: 1; font-size: smaller;FONT-FAMILY: 'Times New Roman', serif">7</sup> The Executive Chairman of Google, Eric Schmidt, explained: &#8220;Much of corporate America is buying renewable energy [...] not just to be sustainable, because it makes business sense, helping companies diversify their power supply, hedge against fuel risks, and support innovation in an increasingly cost-competitive way.&#8221;<sup style="vertical-align: text-top; line-height: 1; font-size: smaller;FONT-FAMILY: 'Times New Roman', serif">8</sup></div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">Kroger, which generates large carbon emissions, significantly trails its peers on reducing climate impacts and renewable energy adoption.</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"><br>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">Kroger is significantly behind other companies in addressing and meaningfully curbing carbon emissions, reducing its carbon footprint, and adopting renewable energy. Kroger&#8217;s management appears to be taking slow and relatively minor action in response to climate change imperatives&#8212;in contrast to peers that are setting records on renewable energy installation. In fact, Kroger&#8217;s Scope 1 &amp; 2 emissions to gross energy consumption (its carbon efficiency) has become <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic"><u>more</u></font> inefficient since 2012.<sup style="vertical-align: text-top; line-height: 1; font-size: smaller;FONT-FAMILY: 'Times New Roman', serif">9</sup> By comparison, Kroger&#8217;s competitor Walmart <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic"><u>decreased</u></font> its emissions in 2015 and <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic"><u>lowered</u></font> its emissions per megawatt to 20% below that of Kroger while increasing the number of locations.<sup style="vertical-align: text-top; line-height: 1; font-size: smaller;FONT-FAMILY: 'Times New Roman', serif">10</sup> Alarmingly, Kroger fares even worse when considering its carbon intensity,<sup style="vertical-align: text-top; line-height: 1; font-size: smaller;FONT-FAMILY: 'Times New Roman', serif">11</sup> which totals 32.9 metric tons CO2e per 1,000 sq. ft. In comparison, <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">Target reports a carbon intensity of 10.4 metric tons CO2e per 1,000 sq. ft&#8212;more than 3 times lower Kroger&#8217;s carbon intensity.</font><sup style="vertical-align: text-top; line-height: 1; font-size: smaller;FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">12</sup><br>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left"><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">6</sup>&#160;<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">Climate action and profitability: CDP S&amp;P 500 Climate Change Report 2014</font>, (CDP, 2014), https://www.starwoodhotels.com/Media/PDF/Corporate/CDP-SP500-climate-report-2014.pdf.</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left"><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">7</sup> &#8220;The Companies,&#8221; RE100, accessed May 26, 2017, http://there100.org/companies.</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left"><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">8</sup> &#8220;Google's commitment to sustainability,&#8221; Google Green Blog, Sept 24, 2014, http://googlegreenblog.blogspot.com/2014/09/googles-commitment-to-sustainability.html<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #0000ff"><u>.</u></font></div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left"><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">9</sup>&#160;<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">Climate Change 2016: Information Request Kroger Corporation, (CDP, 2016), https://www.cdp.net/sites/2016/31/10331/Climate Change 2016/Pages/DisclosureView.aspx</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic"><u>.</u></font> | <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">Kroger&#8217;s energy consumption in 2012 and 2015 were, respectively, 7.38 million MWh and 7.73 million MWh, and its emissions were 6.1 and 6.6 million mtCO2e between 2012 and 2015. This represents an energy efficiency of 0.83 vs. 0.85 mtCO2e/MWh between 2012 and 2015</font></div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left"><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">10</sup> &#8220;Walmart Unit Counts and Square Footage,&#8221; Wal-Mart Stores, Inc., Q4 Fiscal Year 2014 and Q4 Fiscal Year 2015, http://stock.walmart.com/investors/financial-information/unit-counts-and-square-footage/default.aspx; <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">Climate Change 2016 Information Request: Wal-Mart Stores, Inc.</font>, (CDP, 2016), https://www.cdp.net/sites/2016/02/20402/Climate Change 2016/Pages/DisclosureView.aspx. | <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">Wal-Mart&#8217;s emissions per megawatt were 0.66 mtCO2e/MWh, Wal-Mart&#8217;s Scope 1 &amp; 2 emissions were 21 million mtCO2e, and its power consumption was 31.5 million MWh</font></div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left"><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">11</sup> Kroger at times interchanges &#8220;carbon footprint&#8221; with &#8220;carbon intensity.&#8221; Carbon intensity is defined as the average emission rate of carbon (or carbon equivalents) relative to the intensity of a specific activity. In this paper we refer to carbon intensity in reference to square foot of operations.</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left"><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">12</sup>&#160;<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">Climate Change 2016: Information Request Target Corporation</font>, (CDP, 2016), section 12.4. | <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">Target reports 0.01042 metric tons CO2e per sq. ft., which equals 10.4 metric tons CO2e per 1000 sq. ft.</font><br>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">With regard to renewable energy, Kroger again falls significantly below its peers. Walmart has made a commitment to source 100% of its power from renewables, joining 94 other companies, including Whole Foods Market, IKEA, GM, and Starbucks.<sup style="vertical-align: text-top; line-height: 1; font-size: smaller;FONT-FAMILY: 'Times New Roman', serif">13</sup> Kroger, has made no such commitment and has instead introduced renewable power at only 12 of its 3,656 stores, plants, and distribution centers&#8212;a strikingly low 0.3% (see chart). This is especially minimal compared to Target and Walmart as set forth below:</div>

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<td style="BORDER-TOP: #bfbfbf 2px solid; BORDER-RIGHT: #bfbfbf 2px solid; WIDTH: 15.8%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #bfbfbf 2px solid; BORDER-LEFT: #bfbfbf 2px solid">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Total<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"><br>
</font> properties</div>
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<td style="BORDER-TOP: #bfbfbf 2px solid; BORDER-RIGHT: #bfbfbf 2px solid; WIDTH: 27.47%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #bfbfbf 2px solid; BORDER-LEFT: #bfbfbf 2px solid">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Properties powered by<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"><br>
</font> renewables</div>
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<td style="BORDER-TOP: #bfbfbf 2px solid; BORDER-RIGHT: #bfbfbf 2px solid; WIDTH: 18.86%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #bfbfbf 2px solid; BORDER-LEFT: #bfbfbf 2px solid">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Percent of<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"><br>
</font> properties</div>
</td>
<td style="BORDER-TOP: #bfbfbf 2px solid; BORDER-RIGHT: #bfbfbf 2px solid; WIDTH: 26.94%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #bfbfbf 2px solid; BORDER-LEFT: #bfbfbf 2px solid">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">Renewable power</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"><br>
</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">produced </font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">(MWh)</font></div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Walmart</div>
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<td style="BORDER-TOP: #bfbfbf 2px solid; BORDER-RIGHT: #bfbfbf 2px solid; WIDTH: 15.8%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #bfbfbf 2px solid; BORDER-LEFT: #bfbfbf 2px solid; BACKGROUND-COLOR: #f2f2f2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">11,723<sup style="vertical-align: text-top; line-height: 1; font-size: smaller;FONT-FAMILY: 'Times New Roman', serif">14</sup></div>
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<td style="BORDER-TOP: #bfbfbf 2px solid; BORDER-RIGHT: #bfbfbf 2px solid; WIDTH: 27.47%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #bfbfbf 2px solid; BORDER-LEFT: #bfbfbf 2px solid; BACKGROUND-COLOR: #f2f2f2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">&gt; 1,400<sup style="vertical-align: text-top; line-height: 1; font-size: smaller;FONT-FAMILY: 'Times New Roman', serif">15</sup></div>
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<td style="BORDER-TOP: #bfbfbf 2px solid; BORDER-RIGHT: #bfbfbf 2px solid; WIDTH: 18.86%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #bfbfbf 2px solid; BORDER-LEFT: #bfbfbf 2px solid; BACKGROUND-COLOR: #f2f2f2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">&gt;11.9%</div>
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<td style="BORDER-TOP: #bfbfbf 2px solid; BORDER-RIGHT: #bfbfbf 2px solid; WIDTH: 26.94%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #bfbfbf 2px solid; BORDER-LEFT: #bfbfbf 2px solid; BACKGROUND-COLOR: #f2f2f2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">450,810<sup style="vertical-align: text-top; line-height: 1; font-size: smaller;FONT-FAMILY: 'Times New Roman', serif">16</sup></div>
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<td style="BORDER-TOP: #bfbfbf 2px solid; BORDER-RIGHT: #bfbfbf 2px solid; WIDTH: 10.94%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #bfbfbf 2px solid; BORDER-LEFT: #bfbfbf 2px solid">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Target</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">1,838<sup style="vertical-align: text-top; line-height: 1; font-size: smaller;FONT-FAMILY: 'Times New Roman', serif">17</sup></div>
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<td style="BORDER-TOP: #bfbfbf 2px solid; BORDER-RIGHT: #bfbfbf 2px solid; WIDTH: 27.47%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #bfbfbf 2px solid; BORDER-LEFT: #bfbfbf 2px solid">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">193<sup style="vertical-align: text-top; line-height: 1; font-size: smaller;FONT-FAMILY: 'Times New Roman', serif">18</sup></div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">10.5%</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">62,174<sup style="vertical-align: text-top; line-height: 1; font-size: smaller;FONT-FAMILY: 'Times New Roman', serif">19</sup></div>
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<td style="BORDER-TOP: #bfbfbf 2px solid; BORDER-RIGHT: #bfbfbf 2px solid; WIDTH: 10.94%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #bfbfbf 2px solid; BORDER-LEFT: #bfbfbf 2px solid; BACKGROUND-COLOR: #f2f2f2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">Kroger</div>
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<td style="BORDER-TOP: #bfbfbf 2px solid; BORDER-RIGHT: #bfbfbf 2px solid; WIDTH: 15.8%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #bfbfbf 2px solid; BORDER-LEFT: #bfbfbf 2px solid; BACKGROUND-COLOR: #f2f2f2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">3,656<sup style="vertical-align: text-top; line-height: 1; font-size: smaller;FONT-FAMILY: 'Times New Roman', serif">20</sup></div>
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<td style="BORDER-TOP: #bfbfbf 2px solid; BORDER-RIGHT: #bfbfbf 2px solid; WIDTH: 27.47%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #bfbfbf 2px solid; BORDER-LEFT: #bfbfbf 2px solid; BACKGROUND-COLOR: #f2f2f2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">12<sup style="vertical-align: text-top; line-height: 1; font-size: smaller;FONT-FAMILY: 'Times New Roman', serif">21</sup></div>
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<td style="BORDER-TOP: #bfbfbf 2px solid; BORDER-RIGHT: #bfbfbf 2px solid; WIDTH: 18.86%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #bfbfbf 2px solid; BORDER-LEFT: #bfbfbf 2px solid; BACKGROUND-COLOR: #f2f2f2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">0.3%</div>
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<td style="BORDER-TOP: #bfbfbf 2px solid; BORDER-RIGHT: #bfbfbf 2px solid; WIDTH: 26.94%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #bfbfbf 2px solid; BORDER-LEFT: #bfbfbf 2px solid; BACKGROUND-COLOR: #f2f2f2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">9,991<sup style="vertical-align: text-top; line-height: 1; font-size: smaller;FONT-FAMILY: 'Times New Roman', serif">22</sup></div>
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</font>At present Walmart and Target use renewables at over 10% of their locations (see chart), which in relative percentages is more than 35 times greater than that of Kroger.<sup style="vertical-align: text-top; line-height: 1; font-size: smaller;FONT-FAMILY: 'Times New Roman', serif">23</sup><br>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left"><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">13</sup> &#8220;The Companies,&#8221; RE100.</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left"><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">14</sup> &#8220;Unit count information as of April 30, 2017,&#8221; Wal-Mart Stores, Inc., accessed May 26, 2017, http://stock.walmart.com/investors/financial-information/unit-counts-and-square-footage/default.aspx.</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left"><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">15</sup>&#160;<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">Walmart: 2016 Global Responsibility Report</font>, (Wal-Mart Stores, Inc., 2016), p.63.</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left"><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">16</sup>&#160;<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">Climate Change 2016: Information Request: Wal-Mart Stores, Inc.</font>, (CDP, 2016), section 11.5.</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left"><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">17</sup> &#8220;Corporate Fact Sheet,&#8221; Target Corporation, accessed May 26, 2016, https://corporate.target.com/press/corporate.</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left"><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">18</sup>&#160;<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">2016 Target Corporate Social Responsibility Report</font>, (Target Corporation, 2016), p.20, https://corporate.target.com/_media/TargetCorp/csr/pdf/2015-Corporate-Social-Responsibility-Report.pdf - page=7.</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left"><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">19</sup>&#160;<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">Climate Change 2016: Information Request Target Corporation</font>, (CDP, 2016), section 11.5, https://www.cdp.net/sites/2016/20/18320/Climate Change 2016/Pages/DisclosureView.aspx.</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left"><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">20</sup> &#8220;Investor Relations,&#8221; Kroger Corporation, accessed May 26, 2016.</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left"><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">21</sup>&#160;<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">2016 Sustainability Report: Improving Today to Protect Tomorrow</font>, (Kroger Corporation, 2016), p.57.</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left"><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">22</sup>&#160;<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-STYLE: italic">Climate Change 2016: Information Request Kroger Corporation</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">, (CDP, 2016),</font> section 11.5, https://www.cdp.net/sites/2016/31/10331/Climate Change 2016/Pages/DisclosureView.aspx<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #0000ff"><u>.</u></font></div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left"><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">23</sup>&#160;<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">e.g. Walmart&#8217;s 11.9% adoption of renewables is 39.7 times larger than Kroger&#8217;s 0.3% adoption</font></div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">Kroger fails to disclose information allowing shareholders to assess how, or whether, the Company is adequately addressing carbon risk or developing a renewable energy portfolio into the future.</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">Kroger&#8217;s recent CDP reporting remains confusing and unclear, providing data with moving baselines and targets that, while appearing to be significant, actually encompass relatively small improvements. While <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">any</font> reduction effort by the Company is laudable, the Company&#8217;s &#8220;40%&#8221; energy reduction goal for 2020 (announced in 2016) relies on a <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">17 year old baseline </font>and not the current year. <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">This new goal will therefore only reduce the Company&#8217;s energy use by </font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; FONT-STYLE: italic"><u>3%</u></font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">, in total, between 2016 and 2020</font>, <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">an anemic 0.75% a year</font>&#8212;of which, the Company appears to have accomplished 0% reductions in the current reporting year.<sup style="vertical-align: text-top; line-height: 1; font-size: smaller;FONT-FAMILY: 'Times New Roman', serif">24</sup></div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">Similarly, Kroger&#8217;s 2020 goal of improving transportation fuel efficiency by 20% is little different from business-as-usual given current fuel economy standards. Kroger&#8217;s improvement goal tracks federal emissions requirements that require a 20% increase in fuel efficiency of heavy vehicles by 2020.<sup style="vertical-align: text-top; line-height: 1; font-size: smaller;FONT-FAMILY: 'Times New Roman', serif">25</sup> Kroger&#8217;s fuel efficiency goal appears to simply follow the Company&#8217;s vehicle replacement schedule.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">Lastly, the Company&#8217;s reporting on renewable energy describes 12 renewable energy projects it has implemented, but does not provide a cohesive, enterprise-wide renewable energy adoption program. Apart from renewable energy credits (RECs), the only other renewable energy discussed in Kroger&#8217;s most recent CDP report is the Company&#8217;s use of landfill sourced LNG and Kroger&#8217;s single biogas digester system, the carbon offsets of which, while important, are still insignificant against the billions of pounds of carbon resulting from Kroger&#8217;s massive energy consumption.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">Consistently higher caliber reporting from Kroger would assist shareholders in understanding the impact of its carbon reduction measures and in comparing them to other retail competitors. In both 2015 and 2016, rather than providing clear future-oriented reduction goals, Kroger identified goals with prior year baselines that the company had nearly accomplished, inflating the perceived future accomplishment. Although the Company&#8217;s efforts in previous years are steps in the right direction, this recent practice of moving goal posts back every reporting year confuses shareholders and likely decreases Kroger&#8217;s impetus to determine a meaningful way forward in achieving significant carbon reduction and renewable energy development.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">The reporting requested by this proposal, a study considering the feasibility of Kroger&#8217;s adopting a renewable energy target, is an important first step in assuring investors that our company is working to effectively remedy its climate risk.<br>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left"><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">24</sup>&#160;<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-STYLE: italic">Climate Change 2016: Information Request Kroger Corporation</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">, (CDP, 2016), section 3.1a, Abs1 and section 3.1e, Abs1; &#8220;Our goal is to build on our current energy savings and continue to reduce an additional 5% consumption by the end of 2020,&#8221; </font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-STYLE: italic">Kroger 2016 Sustainability Report</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">, (Kroger Corporation, 2016), p.54; </font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">2015 Sustainability Report</font>, (Kroger Company, 2015), p.48, http://static.globalreporting.org/report-pdfs/2015/1ae742d64b8712edee81f40e8a66fc47.pdf<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000"> | </font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">Kroger will reduce 40% of 4.9 million MWh that was used in year 2000 for a total reduction of 1.96 million MWh by 2020. Of which, Kroger has already completed 87.5% of this goal or 1.7 million MWh, leaving only 243,766 MWh to cut between 2016 and 2020. In the current reporting year, Kroger used 7,734,010 MWh; therefore, Kroger will reduce its energy consumption by 243,765.6 / </font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-STYLE: italic">7,734,010 = 0.032, or </font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-STYLE: italic"><u>3.2%</u></font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-STYLE: italic">. In the last reporting year (2015) Kroger accomplished 100% of a 35% reduction from 2000, which is a reduction of 1.7 million MWh over 15 years (35% of 4.9 million MWh). Since Kroger has already reduced 1.7 million MWh in the previous reporting year, Kroger has in fact accomplished no energy reductions to meet its goals in the current reporting year.</font></div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left"><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">25</sup>&#160;<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">2017 and Later Model Year Light-Duty Vehicle Greenhouse Gas Emissions and Corporate Average Fuel Economy Standards</font>, (EPA, 2012), 40 CFR 85, 86, 600; &#8220;EPA and NHTSA Propose Greenhouse Gas and Fuel Efficiency Standards for Medium- and Heavy-Duty Trucks: By the Numbers,&#8221; EPA-420-F-15-903, 2015, https://www.nhtsa.gov/sites/nhtsa.dot.gov/files/by-the-numbers.pdf. | <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">CAFE Phase 1 regulations require improvements of about 16% by 2018, based on a 2010 baseline; Phase 2 require a 27% improvement from Phase 1 by 2027. Therefore, a 39% increase must occur between 2010 and 2027, or roughly 2.3% per year, which makes 16% + 2.3%*(2) = </font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic"><u>20.6% by 2020</u></font><br>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">Targeted efforts over the past 10 years have &#8220;resulted in a nearly 10% intensity reduction...&#8221;</div>
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<div style="TEXT-ALIGN: left"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">While a 10% carbon intensity reduction over 10 years is a step in the right direction, much more substantial reductions are necessary for Kroger to reduce its carbon-related regulatory risk and maintain its competitiveness against innovative peers. <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">Kroger&#8217;s reported carbon intensity of 32.9 metric tons per 1,000 sq. ft. is significantly larger than the carbon intensity of its peers</font>. Notably, Walmart reports a carbon intensity of 18.3 metric tons of carbon equivalent (tCO2e) per 1,000 sq. ft. of retail space, which is <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">half</font> that of Kroger&#8217;s,<sup style="vertical-align: text-top; line-height: 1; font-size: smaller;FONT-FAMILY: 'Times New Roman', serif">26</sup> and Target reports a carbon intensity of 10.4 tCO2e per 1,000 sq. ft. (at its U.S. locations), which is <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">a third</font> that of Kroger&#8217;s.<sup style="vertical-align: text-top; line-height: 1; font-size: smaller;FONT-FAMILY: 'Times New Roman', serif">27</sup> If Kroger were to catch up to Walmart or Target at Kroger&#8217;s prior pace of reduction&#8212;10% over 10 years&#8212;<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">it would take over 58 years to reach Walmart&#8217;s current carbon intensity and at least 115 years to catch up with Target</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">.</font><sup style="vertical-align: text-top; line-height: 1; font-size: smaller;FONT-FAMILY: 'Times New Roman', serif">28</sup> Further, Walmart plans to increase its renewables usage by 600% and Target will have installed solar power at over 300 locations (representing a third of its stores),<sup style="vertical-align: text-top; line-height: 1; font-size: smaller;FONT-FAMILY: 'Times New Roman', serif">29</sup> leaving Kroger very, very far behind its peers.<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"><br>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">10.4</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left; MARGIN-LEFT: 27pt; TEXT-INDENT: -27pt">114.6</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">&#8220;We are actively working to do more in both the short- and long-term,&#8221; with regard to renewable energy adoption at our &#8220;Turkey Hill Dairy&#8221; and &#8220;ten Kroger stores.&#8221;</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">Kroger&#8217;s entry into renewable energy at a dozen locations, while a start, contributes only 0.1% of total energy consumed by Kroger&#8217;s operations.<sup style="vertical-align: text-top; line-height: 1; font-size: smaller;FONT-FAMILY: 'Times New Roman', serif">30</sup>&#160;<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">Kroger offers no substantive discussion of how it plans to expand its renewable capacity beyond this dozen stores and the three additional Fry&#8217;s locations at which it hopes to install solar power.</font><sup style="vertical-align: text-top; line-height: 1; font-size: smaller;FONT-FAMILY: 'Times New Roman', serif; FONT-WEIGHT: bold">31</sup> By comparison, Walmart has installed solar power on over 1,400 locations and currently supplies at least 10 times the renewable power of Kroger.<sup style="vertical-align: text-top; line-height: 1; font-size: smaller;FONT-FAMILY: 'Times New Roman', serif">32</sup> Walmart also plans to increase its renewable energy usage by 600% over the next 4 years, which puts Walmart on track to achieve its goal of 100% renewable energy usage.<sup style="vertical-align: text-top; line-height: 1; font-size: smaller;FONT-FAMILY: 'Times New Roman', serif">33</sup> Similarly, Target has installed solar power at 193 locations, with a goal of reaching a total of 500 locations by 2020; Target also currently supplies 10 times the renewable energy of Kroger.<sup style="vertical-align: text-top; line-height: 1; font-size: smaller;FONT-FAMILY: 'Times New Roman', serif">34</sup></div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left"><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">26</sup>&#160;<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">Climate Change 2016: Information Request Wal-Mart Stores, Inc.</font>, (CDP, 2016), section 12.3.</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left"><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">27</sup>&#160;<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">Climate Change 2016: Information Request Target Corporation</font>, (CDP, 2016), section 12.4.</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left"><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">28</sup>&#160;<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">Found by using the compound interest formula, e.g. for Walmart: 32.9*(1 - 0.01)</font><sup style="vertical-align: text-top; line-height: 1; font-size: smaller;FONT-STYLE: italic">x </sup><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">= 18.3, where (x) is the number of required years and (0.01) is a 1% reduction per year from 10% over 10 years. Calculated as (# required years) = [LOG(18.3/32.9)] / LOG(0.99)</font></div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left"><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">29</sup>&#160;<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">Climate Change 2016: Information Request Wal-Mart Stores, Inc.</font>, (CDP, 2016), section 3.1d; <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">2016 Target Corporate Social Responsibility Report</font>, (Target Corporation, 2016), p.20.</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left"><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">30</sup>&#160;<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-STYLE: italic">Climate Change 2016: Information Request Kroger Corporation</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">, (CDP, 2016)</font>, section 11.5 | <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">9,991 MWh renewables vs. 7,734,011 MWh total energy consumed</font></div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left"><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">31</sup>&#160;<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">Kroger Sustainability Report 2016</font>, (Kroger Corporation, 2016), p.57.</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left"><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">32</sup>&#160;<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">Walmart: 2016 Global Responsibility Report</font>, (Wal-Mart Stores, Inc., 2016), p.63; <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">Climate Change 2016 Information Request: Wal-Mart Stores, Inc.</font>, (CDP, 2016), section 11.5.</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left"><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">33</sup>&#160;<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">Climate Change 2016 Information Request: Wal-Mart Stores, Inc.</font>, (CDP, 2016), section 3.1d &amp; 2.2a.</div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left"><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">34</sup>&#160;<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">2016 Target Corporate Social Responsibility Report</font>, (Target Corporation, 2016); <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">Climate Change 2016: Information Request Target Corporation</font>, (CDP, 2016), section 11.5.<br>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">&#8220;Kroger will reduce cumulative energy consumption by 40% by 2020, using 2000 as a baseline year.&#8221;</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">As discussed above, the use of a 17 year-old baseline makes Kroger&#8217;s 40% reduction statement misleading to shareholders. By 2016, when the target was adopted, Kroger had already accomplished 87.5% of the new energy reduction goal. <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">Using this goal, Kroger will reduce cumulative energy consumption between 2016 and 2020 by slightly more than 3%, not 40%</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">.</font><sup style="vertical-align: text-top; line-height: 1; font-size: smaller;FONT-FAMILY: 'Times New Roman', serif">35</sup> Similarly, in Kroger&#8217;s 2015 reporting, it used the same mechanism to announce accomplishments during the then-current reporting year that the Company had completed in <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">previous</font> years.<sup style="vertical-align: text-top; line-height: 1; font-size: smaller;FONT-FAMILY: 'Times New Roman', serif">36</sup> Kroger&#8217;s habit of moving the goal posts back every reporting year is confusing and tends to obscure the actual future goals the Company has put in place to reduce its energy use.</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">&#8220;Kroger will improve transportation efficiency by 20% by 2020, using 2010 as a baseline year.&#8221;</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">Kroger is not required to make any meaningful changes to business-as-usual in order to meet its 2020 transportation efficiency goal. <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">The Company&#8217;s transportation efficiency goal generally tracks federal vehicle emissions reduction requirements</font> that require a 20% increase in the fuel efficiency of heavy vehicles by 2020. Kroger&#8217;s fuel efficiency goal is easily accomplished by the Company&#8217;s regular vehicle replacement schedule.</div>

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<div style="FONT-SIZE: 14pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; TEXT-ALIGN: left">CONCLUSION</div>

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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left">The reporting requested by this proposal provides a first important step toward Kroger&#8217;s adoption of greater renewable energy resources as a means of reducing climate risk and accruing benefits that will add to the company&#8217;s value. Kroger&#8217;s current slow pace of carbon reduction suggests a failure to recognize the serious risks this underperformance poses to the Company&#8217;s reputation, brand, regulatory compliance costs, supply chain success, and ongoing competitiveness with more efficient, environmentally conscious peers. With supply chains that stretch across the globe, Kroger&#8217;s operations are extremely vulnerable to the risks of climate change. The Company has made little headway since the last four carbon-related proposals, which garnered an average of nearly 36% support from shareholders. <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">Proponents request a &#8220;YES&#8221; vote on this proposal.</font><br>
<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"><br>
</font><font style="FONT-STYLE: italic">For questions, please contact Danielle Fugere, As You Sow, dfugere@asyousow.org</font><br>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left"><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">35</sup> S<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">ee note 23</font></div>

<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: left"><sup style="vertical-align: text-top; line-height: 1; font-size: smaller">36</sup>&#160;<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic">ibid.</font></div>

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end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
