Vital Farms - 1792 Exchange

Rating Overview

Vital Farms is Medium Risk.

Vital Farms is Medium Risk. The company often yields to political activism in shaping corporate governance, potentially alienating consumers, dividing employees, and harming shareholders. The company implements race and identity-based policies that replace merit, excellence, and integrity with preferential treatment and outcomes. The company occasionally embraces corporate initiatives that redirect its central focus from business goals to partisan policies and divisive issues at times. This approach fails to safeguard free exercise, free speech, and free enterprise.

Rating Criteria

Corporate Weaponization Risk Levels
Criteria	Risk Level
Cancellations	Medium Risk
Discriminatory Philanthropy	Lower Risk
Employment Protection	High Risk

Corporate Weaponization ⓘ

Corporate Governance and Public Policy Risk Levels
Criteria	Risk Level
Advocacy Bias	High Risk
Funding	Lower Risk
Political Actions	N/A

Corporate Governance and Public Policy ⓘ

Rating Criteria Detail

Criteria Risk Level Rationale

Corporate Weaponization

Criteria:

Has canceled customers, suppliers, or vendors due to their political views or religious beliefs OR corporately boycotts, divests, or sanctions regions, people groups, or industries.

Risk Level:

Medium

Rationale:

Vital Farms integrates ESG into its business practices. From its 2023 Impact report: “Our ESG work is embedded into our business. This holistic approach enables us to avoid siloed or bolt-on programming that, we believe, compromises the real impact this work should have across our stakeholders” (1). The Company integrates DEI into its supply chain. From its Supplier Code of Conduct: “Suppliers shall provide opportunities to diverse suppliers and businesses
when supplying goods to Vital Farms” (2). The Company promotes divisive sex and gender policies. Its Supplier Code of Conduct require international vendors to include sexual orientation in their nondiscrimination policy (3). However, the Company has not canceled customers, suppliers, or vendors based on political views or religious beliefs (4).

Criteria:

Charitable giving (including employee matching programs) policies or practices discriminate against charitable organizations based on views or religious beliefs.

Risk Level:

Lower

Rationale:

Vital Farms does not appear to discriminate against charitable organizations based on views or beliefs (1)(2).

Criteria:

Employment policies fail to protect against viewpoint or other discrimination and/or are ideological in nature.

Risk Level:

High

Rationale:

Vital Farms appears to prioritize diversity over merit in its leadership composition. From its Corporate Governance Guidelines: “The Board reviews candidates for director nomination in the context of the current composition of the Board, the Company’s operating requirements, and the long-term interests of the Company’s stakeholders. In conducting this assessment, the Board considers diversity (including diversity of gender, ethnic background and country of origin), age, skills and other factors that it deems appropriate to maintain a balance of knowledge, experience, and capability on the Board” (1). The company appears to prioritize diversity over merit in its supply chain. From its 2023 Impact report: “We are also focused on taking meaningful action in diversifying our supply chain. Through partnerships with National Young Farmers Coalition (NYFC), Farmer Veteran Coalition, and the National Black Farmers Association (NBFA), we are connecting with and supporting farmers from historically underrepresented groups” (2). The Company does not provide viewpoint protections for its employees (3).

Corporate Governance and Public Policy

Criteria:

Uses corporate reputation to support causes, organizations, or policies hostile to freedom of expression.

Risk Level:

High

Rationale:

Vital Farms supports DEI within its business practices, hosting a DEI Council (1). The Company supports ESG within its business practices. From its 2023 Impact report: “At Vital Farms, we define Impact as a holistic ambition and active strategy that includes our ESG approach, our B Corp certification, DEI, risk mitigation, and purpose-driven program development” (2). However, in 2024 the Company removed the language surrounding DEI and ESG from their Impact report. To date, the company has not publicly addressed this change, leaving shareholders without clarity regarding the company’s reasoning or future direction (3).

Criteria:

Uses corporate funds to advance ideological causes, organizations, or policies hostile to freedom of expression.

Risk Level:

Lower

Rationale:

Vital Farms has not used corporate funds to advance ideological causes, organizations, or policies (1).

Criteria:

Uses corporate political actions and/or financial contributions for ideological, non-business purposes.

Risk Level:

N/A

Rationale:

Vital Farms does not operate a PAC or report on its lobbying at this time (1)(2)(3).