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February 12, 2013
Shareowners Call for Sustainability Reporting by Emerson Electric
by Robert Kropp
For the fourth year in a row, a resolution filed by Walden Asset Management wins increased support
from shareowners who want the company to improve its reporting on its ESG performance.
Publishing a sustainability report, a laudable first step on a long path to genuinely sustainable
performance by corporations, has become increasingly common in large part due to engagement by
sustainable investors. The percentage of S&P 500 companies producing sustainability reports
increased from just 19% to more than half in the past year alone, according to a recent report from
the Governance & Accountability Institute.
"For the first time the non-reporters are in the minority," the report states.
The rapid uptake of the practice by major corporations might suggest that that the
decreasing number of laggards would be eager to join their peers. And although it is too early in
the 2013 proxy season to determine whether this is so, only two of the 11 resolutions filed by
members of the Interfaith Center on Corporate
Responsibility (ICCR) has been withdrawn thus far.
For the fourth year, Walden Asset Management and a host of
co-filers have requested that Emerson Electric produce a sustainability report. In 2012, Emerson
had the lowest Carbon Disclosure Project
(CDP) score of all responding companies in the Industrials Sector.
pointed out, "The company has not outlined targets and goals on greenhouse gas (GHG) emissions
reductions...investors have no access to evaluative" Emerson's claims to operate in an
environmentally responsible manner. Furthermore, the company "does not provide any specific
information about sustainability issues in its supply chain, especially in relation to GHG
Emerson's Annual General Meeting was held on February 5th, and for the fourth
year in a row shareowner support for Walden's resolution increased. Last year, 35% of shareowners
voted in favor of the resolution; this year, 38% supported it.
In its recommendation that
shareowners vote down the proposal, Emerson's board of directors stated, "A similar proposal was
presented to Emerson stockholders at last year’s annual meeting and was defeated, receiving only
approximately 29% of all votes cast on the proposal." In an email, Marcela Pinilla of Walden
observed, "Emerson elected to count abstentions to calculate its vote results. According to the SEC
the equation takes into account only votes in favor and against."
And for Emerson to
describe such a substantial vote in favor of the resolution is misleading at best. According to
ICCR's 2013 Proxy Resolutions and Voting Guide, "Votes in the double digits are generally
considered very successful in focusing investor and management attention on issues."
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