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Simpson Sustainability Report 2014

Shareholders request that Simpson Manufacturing 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 November 3, 2014, prepared at reasonable cost, omitting proprietary information.
We believe tracking and reporting 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, and receive feedback. 
The Principles for Responsible Investment (PRI) is a United Nations initiative that seeks the integration of ESG factors in investment decision making. Members collectively hold over $34 trillion in assets and request information on ESG factors to analyze the risks and opportunities associated with existing and potential investments. 
Carbon Disclosure Project (CDP), representing over 722 institutional investors globally with more than $87 trillion in assets, has for years called for disclosure from companies on their climate change management programs. Over two thirds of the S&P 500 now report to CDP.
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. Smaller companies are proactively adopting sustainability reporting to report on progress as they grow and anticipate sustainability reporting requests from investors and customers. 
Companies such as 3M, Apple, Intel and Microsoft, among many others, increasingly require their suppliers to track and report key environmental and social factors. Home Depot, a Simpson Manufacturing customer, encourages sustainability improvement reporting from suppliers through its “Supplier Sustainability Program”. Competitors like Masco Corporation and United Technologies Group publish comprehensive sustainability reports. 
In contrast, Simpson Manufacturing does not report on its sustainability efforts or disclose GHG data. Climate change is one of the most financially significant environmental issues currently facing investors. Occupational safety and health, vendor and labor standards, waste and water reduction targets, and product related environmental impacts are important ESG considerations in Simpson Manufacturing’s sector and may have the potential to pose significant regulatory, legal, reputational and financial risks.
The company recognizes in its 10-k that “climate change” and “complying or failing to comply with environmental, health and safety laws could affect us materially and adversely.” Simpson notes climate change may, among other things, “increase the cost and reduce the availability of fresh water, destroy forests…[and] reduce the availability of raw materials and energy.” However, shareholders currently have no access to substantial information on how the company is managing these risks and business factors. 
We recommend that the report include a company-wide review of policies, practices and metrics related to ESG performance using the GRI index and checklist as a reference.