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Gentex Corp Sustainability Report 2011

Internationally recognized index leader Dow Jones defines sustainable business as "encouraging long lasting social well being in communities where [companies] operate, interacting with different stakeholders (e.g. clients, suppliers, employees, government, local communities, and non-governmental organizations), and responding to their specific and evolving needs, thereby securing a long-term 'license to operate,' superior customer and employee loyalty, and ultimately superior financial returns."
We believe reporting on environmental, social and governance (ESG) business practices makes a company more responsive to the global business environment, characterized by finite natural resources, changing legislation, and heightened public expectations for corporate accountability. Reporting also helps companies better integrate and gain strategic value from existing sustainability efforts, identify gaps and opportunities in products and processes, develop company-wide communications, publicize innovative practices, and receive feedback.
Today, companies such as Bloomberg provide information on ESG performance that others including Goldman Sachs and Morgan Stanley utilize to assist in investment decisions. The Carbon Disclosure Project (CDP), currently representing 534 institutional investors globally with $64 trillion in assets, has for years requested greater disclosure from companies on their climate change management programs. The 2009 company response rate to the CDP for S&P 500 and the FTSE Global Equity Index Series 500 was 66% and 82%, respectively.
Furthermore, ESG disclosure is on the rise. According to a 2008 KPMG report on sustainability reporting, 79% of the 250 Global Fortune companies produce reports compared to 52% in 2005. Of the 100 top U.S. companies by revenue, 73% produced reports compared to 32% in 2005. Increasingly, small and medium capitalization companies are following this trend.
In contrast, Gentex Corporation (Gentex) does not report materially on its sustainability efforts and does not disclose specific greenhouse gas (GHG) data or management plans. Transparency on climate change abatement goals is one of the most financially significant environmental issues currently facing investors.
Environmental impact, occupational safety and health, and diversity are areas that can pose significant regulatory, legal, reputational and financial risks to business. Shareholders currently have no way to assess Gentex's performance in these areas. Moreover, significant Gentex customers like Ford Motor Company are increasingly requesting that suppliers expand disclosure of material ESG issues. In last year's annual meeting of shareholders, 33% of Gentex shares voted for a similar resolution, making a strong case by investors for sustainability reporting.
Shareholders request that Gentex issue a sustainability report describing the company's ESG performance including GHG reduction targets and goals. The report should be prepared at reasonable cost, omitting proprietary information, by December, 2011.
We recommend that the report include a company-wide review of policies, practices, and metrics related to ESG performance. We encourage the use of the Global Reporting Initiative's (GRI) Sustainability Reporting Guidelines (G3). The GRI ( is a globally accepted reporting framework considered the gold standard of reporting. The G3 provide a flexible reporting system that facilitates incremental reporting over time.