Wolverine World Wide Sustainability Report and Supply Chain Disclosure 2014
|Filer||Walden Asset Management|
|Subject(s)||Supply Chain; Sustainability Reporting; Worker Safety; Vendor standards|
|Resolved Clause Summary||Report on sustainability reporting and disclosure of supply chain|
RESOLVED: Shareholders request that Wolverine World Wide issues a sustainability report describing the company’s environmental, social, and governance (ESG) risks and opportunities including disclosure of supply chain monitoring and compliance programs. The report should be available by year end 2014, prepared at a 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 ESG reporting according to G&A Institute. Likewise, there is a growing demand by investors for meaningful disclosure on ESG matters. For example:
(1) Investors with over $34 trillion of assets under management are members of the United Nations Principles for Responsible Investment (PRI), an initiative whose members seek the integration of ESG factors in investment decision making.
(2) Over 722 global institutional investors with more than $87 trillion of assets under management are signatories to the Carbon Disclosure Project (CDP), a program which calls for disclosure from companies on their Greenhouse Gas emissions and climate change management programs.
Child and forced labor in Uzbekistan cotton fields, fire and building safety violations in Bangladesh, hazardous chemicals and solvents used on fabrics, and sweatshop style factories in Asia are serious ESG concerns affecting the modern day apparel and footwear industry. Time and again, Wolverine’s industry peers acknowledge that such concerns can pose significant regulatory and financial risk, damage a company’s reputation, lead to loss of brand value, threaten the security of raw material supply, or result in costly litigation.
To benchmark and track progress on monitoring and managing these risks, leading companies in apparel and footwear, such as Nike and Timberland publish comprehensive ESG reports that describe sustainable business practices including vendor audit processes and results. Wolverine’s customers such as Patagonia, Adidas, and VF Corp (The North Face) also have ESG reports and supply chain management disclosure. In contrast, we believe our company is falling behind peers in disclosure and management of ESG issues.
According to Wolverine’s 2012 10-k, our company “sources most of its products from third-party manufacturers in foreign countries, predominantly China.” Environmental performance, safety, human rights, labor rights, and corruption are important ESG considerations for companies operating in China. However, shareholders currently have no access to important information about how Wolverine is managing these 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.