Investors To Chipotle: Show Us Your Sustainability Report

Shareholders Trillium Asset Management and Domini Social Investments file a proposal for the chain to start generating annual sustainability reports, which will be up for a vote at Chipotle’s annual meeting in May.

Chipotle Mexican Grill Inc., the restaurant chain that makes anti-industrial farming movies and the one that touts its natural ingredients and humanely raised meat, is being asked to show whether it practices what it preaches.

Up for a vote at the company’s annual meeting in May will be a proposal forcing Chipotle to create a yearly sustainability report with information on its Food With Integrity program, energy use, waste management and labor standards. The 1,550-store burrito chain founded by Co-CEO Steve Ells has for more than a decade touted its sustainable-farming initiative and recently created an Internet show called “Farmed And Dangerous” that criticizes industrial agriculture.

“They’ve really put their brand behind this message of sustainability and better farming techniques and cleaner agriculture,” said Adam Kanzer, managing director at Domini Social Investments LLC in New York, one of the resolution’s filers. “We want to understand: Is it true? How is it done? How do you manage it?”

Chipotle failed to reach an agreement on the additional disclosures with Domini and Boston-based Trillium Asset Management LLC, the proposal’s other filer. That means a sustainability-reporting resolution will go on Chipotle’s proxy statement. Domini owned 5,835 shares of Chipotle as of Sept. 30, according to data compiled by Bloomberg.

While Denver-based Chipotle doesn’t produce such a report, its website has facts about its food standards. About 56 percent of Standard & Poor’s 500 Index companies provide a corporate sustainability report, according to GMI Ratings, which evaluates governance risks at public companies. GMI’s latest report on Chipotle said the company “has been flagged for disclosure weakness relative to peers” in terms of its environmental reporting.

“We have never done formal sustainability reporting quite simply because we have finite resources,” Chris Arnold, a Chipotle spokesman, said in an e-mail. “We’d rather invest those resources in doing things that actually drive change, than in talking about that change.”

Trillium and Domini are asking that Chipotle, along with more disclosure about the company’s farming standards, give shareholders more information on its carbon footprint, such as food packaging and store water use, as well as labor practices.

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