A resolution submitted to St. Jude Medical requesting the company to publish a sustainability or corporate responsibility report around issues such as the environmental impact of its products and services as well as its workplace practices, such as diversity practices won almost 43% of share votes. Over 20 investors co-sponsored the resolution, among them the Evangelical Lutheran Church in America, Board of Pensions.
The voting results are as follows: 42.81% For; 57.18% Against. (Following the SEC formula for resubmissions, abstentions are not counted in our numbers.) This is in the range of a record vote on sustainability reporting, sending a huge message to the Board and management.
The recent increase in voting percentages supporting corporate disclosure of its performance around ESG issues has mushroomed in the past few years. When proposals receiving 10 or 15% support were singular achievements, we now see resolutions clearly asking for disclosure in the high 30 and 40%. We believe this trend is indicative of a growing awareness by investors of the value of sustainability reporting and the results of this proposal will make the strong case to all companies to develop internal systems to examine ESG risks and opportunities and to report on their progress via a sustainability report for some time to come.
Transparency and accountability are the foundation of good standing; St. Jude shareholders have sent this message clearly to the board and management. (Hat tip to Tim Smith and Marcela Pinilla of Walden Asset Management.