Dive Brief:

• Green Century Capital Management and other investors want to know how much of the food Amazon handles in its grocery business goes to waste, according to The Wall Street Journal. They asked the Securities and Exchange Commission last week to compel Amazon to answer.
• Amazon responded in January, telling the mutual fund that it was working to reduce food waste. In addition, as food represented less than 1% of operating expenses and assets in 2017, the proposal was excluded under SEC rules.
• The management firm and investors asking Amazon for more information on food waste own a roughly $50,000 combined stake in the $732 billion company. Amazon has a history of fighting investor-led proposals.

Dive Insight:

Amazon has challenged shareholder-led resolution on everything from animal cruelty to environmental emissions in the past. Only Exxon Mobil Corp. has challenged more proxy resolutions, according to the Wall Street Journal article.

Food waste is staggering in the U.S., with more than 130 billion pounds of food lost or wasted every year. But for Amazon, it represents less than 1% of its business.

Food retailers are responsible for more than $18 billion worth of food waste each year, according to ReFED. Online grocery purchases only represents roughly 2% of the total market, but that percentage is expected to increase to 20% by 2025, which presents a unique challenge to reducing food waste.

Concerns have been raised that because online shoppers aren't picking out apples or artichokes, they feel less responsible for them and are not as concerned about throwing them away at home. The average family already tosses out $1,500 worth of food each year. If online grocery booms the way it’s expected to, the corresponding increased waste could be significant.

Amazon is not alone in having investors push for transparency about food waste and packaging practices. Retailers ranging from Walmart Inc. to Costco Wholesale Corp. are facing similar shareholder concerns.

Darden Restaurants was criticized for breadsticks getting tossed out at its Olive Garden restaurants in 2016 in a public proxy battle. Darden responded by limiting the number of free breadsticks served and made changes to its board of directors.

While Amazon is not likely to have an overnight change of heart, the potential consumer backlash to ignoring food waste could serve as motivation to act.

Whole Foods customers, who support the chain not just for organic food products, but also for its commitment to the environment, could be turned off by its new parent company ignoring questions about food waste.