Outcome: Successfully withdrawn following commitments from the company that it will set quantitative goals for the reduction of greenhouse gas emissions in its products and operations.
RESOLVED: Shareholders request the Board of Directors adopt quantitative goals for reducing total greenhouse gas emissions from Church & Dwight Co., Inc. products and operations and issue a report by fall 2014, at reasonable cost and omitting proprietary information, on its plans to achieve these goals.
According to the National Oceanic and Atmospheric Administration, 2012 marked the 36th consecutive year that global temperature was above average. Climate scientists have long predicted that rising levels of CO2 in the atmosphere will cause an increase in extreme weather events, rising sea levels, and changes in agricultural production. In 2012, the U.S. experienced 11 extreme weather events resulting in an estimated $110 billion in total damages and 377 fatalities. Superstorm Sandy incurred losses projected at more than $65 billion. The 2012 Midwest drought affected 80 percent of agricultural land, costing approximately $30 billion.
In order to mitigate the worst impacts of climate change, the Intergovernmental Panel on Climate Change (IPCC) estimates that a50 percent reduction in greenhouse gas (GHG) emissions globally is needed by 2050 (relative to 1990 levels) to stabilize global temperatures, entailing a U.S. target reduction of 80 percent.
The costs of failing to address climate are significant and according to the Stern Review, could lead to a 5% loss of global GDP. Climate change could substantially impact a company’s business operations, revenue, or expenditure. Failure to address these risks and opportunities could have lasting negative impacts for investors and other stakeholders. According to the World Wildlife Fund, 79% of US companies in the S&P 500 that report to the Carbon Disclosure Project earn a higher return on their carbon reduction investments than on their overall corporate capital investments.
Major investors are seeking evidence that companies are managing climate risk. Investors with $87 trillion in assets have supported a request to 5,000 companies for disclosure of carbon emissions, reduction goals, and climate change strategies. Over 500 businesses, including General Motors, Microsoft, and Nike signed the Climate Declaration that states, “Tackling climate change is one of America’s greatest economic opportunities of the 21st century.”
Presently, a majority of the Fortune 100 and two-thirds of the Global 100 have GHG emissions reduction commitments, renewable energy commitments, or both. These goals enable companies to reduce costs, build resilient supply chains, manage operational and reputational risk, and create new products and services.
Currently, Church & Dwight Co. Inc. does not publicly set targets for carbon emissions reductions and we believe it should do so in light of IPCC guidance. In contrast, its peers Clorox, Unilever, and L’Oreal set intensity and/or absolute emissions reductions targets. Unilever states, “The business strategy of Unilever has been influenced deeply by climate change considerations.” The company sets absolute targets and has developed a strategy to reduce energy use and achieve financial returns.