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RPC, Inc. Sustainability Report 2014

Shareholders request that RPC, Inc. issue a sustainability report describing the company’s environmental, social and governance (ESG) risks and opportunities including greenhouse gas (GHG) emissions reduction targets and goals. The report should be available by year end 2014, prepared at reasonable cost, omitting proprietary information.

We believe tracking and reporting on ESG business practices makes a company more responsive to a transforming 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, recruit and retain employees, and receive feedback.
Sustainability reporting is on the rise globally. In 2011, there was a 46% increase in the number of organizations worldwide using the Global Reporting Initiative’s (GRI) Guidelines for their ESG reporting according to G&A Institute. Likewise, there is a growing demand by investors for meaningful disclosure on ESG matters.  For example:
(1)   The Principles for Responsible Investment (PRI) is a United Nations initiative whose members seek the integration of ESG factors in investment decision making. Members collectively hold over $34 trillion of assets under management and seek ESG information from companies to be able to analyze fully the risks and opportunities associated with existing and potential investments.
(2)   Carbon Disclosure Project (CDP), representing over 722 institutional investors globally with more than $87 trillion in assets, calls for disclosure from companies on their Greenhouse Gas emissions and climate change management programs. Over two thirds of the S&P 500 now report to CDP.
Climate change is one of the most financially significant environmental issues currently facing RPC’s investors and customers. Occupational safety and health, vendor and labor standards, waste and water reduction targets and product related environmental impacts are particularly important ESG considerations in RPC’s sector and may have the potential to pose significant regulatory, legal, reputational and financial risks.
We are concerned that RPC, Inc. may be falling behind peers in disclosure and management of ESG issues.  RPC’s competitors like Baker Hughes Inc. and Halliburton already offer shareholders much of this important information through annual, GRI-based sustainability reports and by responding to CDP.  In contrast, RPC does not report on its sustainability efforts nor disclose GHG data.
RPC recognizes in its 10-k that the company may be materially affected by “environmental laws and other regulations” and “subject to claims for personal injury and property damage due to the generation of hazardous substances in connection with our operations.” However, shareholders currently have no access to substantial information on how the company is managing its environmental footprint, hazardous releases, worker and community safety, or other business factors and risks.
We recommend that the report include a company-wide review of policies, practices and metrics related to ESG performance employing the GRI index and checklist for guidance.