Outcome: Successfully withdrawn in light of the company's commitment to publish a CSR Report in FY 2019
Shareholders request Acuity Brands, Inc. (Acuity) issue an annually updated sustainability report describing the company’s environmental, social, and governance (ESG) management strategies, quantitative performance, and improvement targets, including a discussion of climate change impacts and greenhouse gas (GHG) emissions. This report should be prepared at reasonable cost and omit proprietary information.
Proponents believe tracking and reporting on ESG strategies and performance strengthens a company’s ability to compete and adapt in today’s global business environment characterized by changing legislation and heightened public expectations for corporate accountability.
Acuity has not disclosed the strategies it uses to manage its ESG impacts or to capitalize on related market opportunities; quantitative metrics conveying the Company’s operational ESG performance; or goals to improve ESG performance.
A Sustainability Policy does not provide the level of information shareholders seek – last year this proposal received a vote of 49.8%.
In contrast, Assa Abloy, Cabot Corporation, Minerals Technologies, Cytec Solvay Group, Osram, Cree, Rockwell Automation, Lennox International, USG Corporation, and Lincoln Electric are examples of the numerous small- to mid- sized industrial companies publishing sustainability metrics alongside qualitative supporting details. Acuity compares itself to several of these companies for compensation purposes; proponents believe it should for reporting purposes as well.
Support for the practice of sustainability reporting continues to grow:
• The Governance & Accountability Institute reports 85% of Acuity’s peers in the S&P 500 published corporate sustainability reports in 2017.
• In 2017, KPMG found 75% of 4,900 global companies had ESG reports and 67% of the world’s largest 250 companies had GHG emissions reduction targets.
• CDP, representing over 650 institutional investors globally with approximately $87 trillion in assets, calls for company disclosure on climate change management programs. Seventy percent of the S&P 500 reported to CDP in 2015.
Transparent, substantive reporting allows companies to better integrate and capture value from existing sustainability efforts, identify gaps and opportunities in policies and practices, enhance company-wide communications, and recruit and retain employees. Importantly, the link between strong sustainability management and value creation has become clear. A 2012 Deutsche Bank review of 100 academic studies, 56 research papers, two literature reviews, and four meta-studies on sustainable investing found 89% of the studies demonstrated that companies with high ESG ratings showed market-based outperformance. Similarly, a report published by WWF, CDP, and McKinsey & Company, found that companies with GHG targets achieved an average of 9% better return on invested capital than companies without targets.
Proponents believe Acuity should review the resources and recommendations made by the Global Reporting Initiative, CDP, Sustainability Accounting Standards Board, and the Taskforce on Climate-related Financial Disclosures in identifying topics to be discussed in this report.
These widely accepted platforms suggest disclosure on topics such as operational environmental impacts (including energy and water use and air emissions), product safety, hazardous materials waste management, business ethics, labor management (including health & safety), and supply chain management.