Swedish Investor AP7 To Back Study On Mondelēz’s Russia Business

By Reuters
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Swedish Investor AP7 To Back Study On Mondelēz’s Russia Business

At least one Mondelēz International investor, Swedish pension fund AP7, will back a resolution calling for the Oreo cookie maker to conduct an independent study of the risks of continuing to do business in Russia, which faces a vote at the company's annual meeting this month.

McDonald's and Starbucks are among the brands that departed Russia after its 2022 invasion of Ukraine, while others such as Nestlé remained there. Food does not fall under international sanctions.

AP7, which holds roughly 1.7 million Mondelēz shares as of May, will support the resolution, said Johan Floren, the firm's chief environmental, social and governance and communication officer, in an email. AP7 is one of Mondelēz's top 75 shareholders, according to LSEG data.

The non-binding resolution, filed by investor Wespath, is the first on Mondelēz's business in Russia since that country's full-scale invasion. The meeting is scheduled for May 22.

Russia Presence

Mondelēz's Russian sales in 2023 accounted for about $1 billion, or 2.9% of overall net revenue.


The Chicago-based company last year faced corporate boycotts in the Nordic region over its Russian business and then pledged to make that business stand-alone with a 'self-sufficient supply chain' before the end of 2023.

"There is a lack of consistency and transparency in Mondelēz's actions," Floren said.

Reduce Risks

The resolution requests that the study assess whether the company should take steps to reduce the risks of doing business in Russia and other conflict-affected areas. Such risks include a Russian order that requires companies to facilitate the conscription of staff and consumer backlash, the resolution states.

In a statement, Mondelēz said its human rights standards, policies and disclosures to shareholders make an additional report unnecessary. The company also said it has ways for employees to submit grievances and conducted a third-party risk assessment on human rights in its value chain last year. The company's board recommends shareholders vote against it.


Wespath, a pension fund for the United Methodist Church, had discussed the Russia business with the company, said Jake Barnett, a managing director for sustainable investment strategies at the firm, in an email.

"These engagements did not leave us with confidence that the company is adequately disclosing how they are addressing the various risks," Barnett said.

Proxy advisory firm Institutional Shareholder Services backed the resolution, saying investors would benefit from an independent review.

"It is not clear from the company’s reports or statements that it has conducted heightened due diligence in Russia and Ukraine," ISS said.

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