Lowes Sustainable Forestry 2012
|Company||Lowe's Companies Inc.|
|Filer||Domini Impact Investments LLC|
|Subject(s)||Climate Change; Forests; Biodiversity|
|Resolved Clause Summary||Sustainable forestry report|
|Status||Withdrawn; Company will address|
Forests are rapidly declining at a rate of 33 soccer fields per minute, according to the United Nations. Endangered forests are home to nearly 50% of the world’s species and 200 million indigenous people worldwide, and are critical to mitigating the effects of climate change.
The forest products industry is the largest industrial consumer of endangered forests. As the second largest home improvement chain, Lowe’s is a major retailer of wood products.
In 2000, LoWe’s adopted a policy that acknowledges its role in “determining Whether these [endangered] forests will remain for future generations.” Lowe’s policy also protects its ability to meet consumer demand for forest products for the long-term. The policy’s long-term goal is to “ensure that all Wood products sold in our stores originate from well-managed, non-endangered forests,” and includes commitments to:
0 Aggressively phase out wood products from endangered forests, including a ban on wood from the Great
Bear Rainforest of British Columbia.
Q Work with vendors to encourage the maintenance of natural forests and environmentally responsible forest
0 Give preference to Forest Stewardship Council (FSC) certified wood products, the highest certification
standard for sustainable forestry.
1 Increase procurement of recycled, engineered and alternative products.
Increasingly, companies’ forest products sourcing practices are coming under greater scrutiny. Home Depot, Dell, IKEA, and Staples have policies to avoid purchasing timber products from endangered forests, with FSC-certified wood procurement preferences. Forest Footprint Disclosure (FFD), backed by more than 60 financial institutions with over $6 trillion in assets under management, calls on global corporations to report on how their practices contribute to deforestation and how those impacts are being managed.
Lowe’s can mitigate reputational risk, enhance consumer loyalty and improve its purchasing practices by publicly reporting its wood purchasing practices. IKEA reports its yearly purchases of FSC-certified wood and wood policy audit results. Home Depot claims to sell more FSC certified Wood than any other retailer in America, among ten examples of their commitment to sustainable forestry. By comparison, Lowe’s does not disclose any information to allow investors to judge the company’s progress in meeting its forestry goals.
Upon releasing its wood policy in 2000, Lowe’s CEO said, "Our customers expect Lowe's to deliver the best quality lumber and wood products that have been responsibly harvested and produced by our suppliers." Ten years later, Lowe’s lack of disclosure on these issues threatens consumer loyalty and long-term shareholder value.
RESOLVED: Shareholders request that the Board of Directors issue an annual report to shareholders, at reasonable cost and omitting proprietary information, beginning December 1, 2012, reporting its progress toward implementing the company’s wood policy.
The report should include a company-wide review of company practices and indicators related to measuring Lowe’s long-term goal of ensuring that all wood products sold in its stores originate from well-managed nonendangered forests. Potential indicators include percentage of FSC-certified wood purchases, purchases of wood products from threatened and endangered forests, and purchases of recycled, engineered and alternative products.