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Crocs Sustainability Report 2012

WHEREAS: Investors increasingly seek disclosure of companies’ social and environmental practices in the belief that they impact shareholder value. Many investors believe companies that are good employers, environmental stewards, and corporate citizens are more likely to generate stronger financial returns, better respond to emerging issues, and enjoy long-term business success.
 
We believe reporting on significant environmental, social, and governance (ESG) factors makes a company more responsive to the global business environment characterized by global supply chains, finite natural resources, changing legislation, and heightened public expectations for corporate accountability. Reporting helps companies better integrate and gain strategic value from existing sustainability efforts, identify gaps and opportunities in products and processes, publicize innovative practices, and receive constructive feedback.
 
Mainstream financial companies are continuing to recognize the links between sustainability performance and shareholder value. Companies such as Bloomberg and MSCI provide information on ESG performance to investors, and firms including Goldman Sachs, Black Rock, and Morgan Stanley use ESG information when making investment decisions.
 
The United Nations’ Principles for Responsible Investing, with over 900 signatories representing more than $30 trillion in assets, encourages investors to incorporate ESG issues into their investment analysis and decisionmaking process.
Company disclosure of sustainability factors is on the rise. According to a 2011 KPMG report on sustainability reporting, 95% of the 250 Global Fortune companies produce reports compared to 52% in 2005. Of the 100 top U.S. companies by revenue, 83% produced reports in 201 l compared to 32% in 2005.
 
Companies in the footwear industry have significant impacts related to supply chain management — especially labor and human rights issues — and enviromnent. Companies such as Nike and Adidas have taken the lead in addressing these key impacts through comprehensive sustainability reporting. In contrast, Crocs, Inc. does not report details on its sustainability efforts and has declined requests from shareholders to provide additional information or to discuss corporate sustainability issues.
 
A well defined and executed sustainability strategy, accompanied by robust sustainability reporting, can help to drive business growth, build better relations with consumers and communities, and enhance shareholder value.
 
Currently, it is difficult for investors to evaluate any work that Crocs may be pursuing related to corporate sustainability and managing environmental, social, and governance issues.
 
RESOLVED: Shareholders request that the Board issue a sustainability report describing the company’s ESG performance, including a discussion on vendor standards and mechanisms for ensuring vendor compliance. The report should be prepared at reasonable cost, omitting proprietary information, by November 1, 2012.
 
SUPPORTING STATEMENT: We recommend that the report include a company-wide review of policies, practices, and metrics related to ESG performance and that Crocs, Inc. commit to continuous improvement in reporting. We encourage using the Global Reporting Initiative’s (GRI) Sustainability Reporting Guidelines (G3). The GRI (www.globalreporting.org) is a globally accepted reporting framework considered the gold standard of reporting. The G3 provide a flexible reporting system that promotes incremental improvement over time.