Sprouts Farmers Markets Earns AAA MSCI Rating for ESG

After major improvements, Sprouts Farmers Market Inc., has raised its BBB rating from last year to AAA for 2021’s MSCI ESG Ratings assessment. The AAA rating represents the highest on the scale and signifies a company leading its industry in managing the most significant environmental, social and governance (ESG) risks and opportunities.

“Over the last two years, we’ve further refined our sustainability focus by partnering with third-party ESG advisors and conducting materiality assessments to understand the issues most important to our stakeholders,” said Brandon Lombardi, Spouts’ chief legal officer and head of ESG. “At Sprouts, we’re proud of the positive impact our business has on the environment, our team members and the communities we serve.”

Acosta’s new “Sustainability Impact on Purchase Behavior” report shows 65% of shoppers want retailers to invest more in sustainability. According to its research, 59% of shoppers are making it a priority to live a more environmentally conscious lifestyle. The findings demonstrate how consumers plan to take more actions with sustainability in mind.  

Sprouts’ 2020-21 ESG highlights include:

• Committed to sourcing 100% RSPO-certified palm oil for its Our Brands product portfolio
• Expanded board oversight of ESG initiatives
• Continued focus on food safety within stores and the supply chain
• Expanded sourcing of less carbon-intensive products such as local, plant-based and organic
• Opened produce distribution centers in Aurora, Colo., and Orlando, Fla., to drive network efficiencies reducing transportation emissions and to support a fresh, local and organic assortment

Sprouts strengthened local food systems by providing communities with access to fresh, nutritious food via the Sprouts Healthy Communities Foundation. The organization recently provided $3 million in grants to 115 nonprofit organizations to improve school garden learning and nutrition education.

MSCI ESG Research provides MSCI ESG Ratings for global public and a few private companies on a scale of AAA (leader) to CCC (laggard), according to exposure to industry-specific ESG risks and the ability to manage those risks relative to peers.

Meanwhile, for its third quarter ended Oct. 3, Sprouts reported that sales fell 4% to $1.5 billion and same-store sales declined 5.4%, compared with a prior-year comp increase of 4.2%. The company began the year forecasting a full-year comp decline in the low to mid-single digits, but when customer traffic failed to rebound earlier this year, guidance was reduced to a decline of 5% to 7% at the end of the second quarter. Now the company expects a full-year comp decline of 7% to 7.5%, including a fourth-quarter decline of 3% to 5%.

Phoenix-based Sprouts, which employs about 35,000 associates and operates more than 360 stores in 23 states nationwide, is No. 48 on The PG 100, Progressive Grocer’s 2021 list of the top food and consumables retailers in North America.