SUSTAINABILITY REPORT
WHEREAS:
Internationally recognized index leader Dow Jones defines sustainable business as “encouraging long lasting social well being in communities where [companies] operate, interacting with different stakeholders (e.g. clients, suppliers, employees, government, local communities, and non-governmental organizations), and responding to their specific and evolving needs, thereby securing a long-term ‘license to operate,’ superior customer and employee loyalty, and ultimately superior financial returns.”
We believe reporting on environmental, social and governance (ESG) business practices makes a company more responsive to the 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.
Today, companies such as Bloomberg provideinformation on ESG performance that others including Goldman Sachs and Morgan Stanley utilize to assist in investment decisions. The Carbon Disclosure Project (CDP), representing 534 institutional investors globally with $64 trillion in assets, has for years requested greater disclosure from companies on their climate change management programs. The 2009 company response rate to the CDP for S&P 500 and theFTSE Global Equity Index Series 500 was 66% and 82%, respectively, including Emerson Electric. However, Emerson’s low score of 21/100 reflects its lack of greenhouse gas (GHG) emissions abatement targets and goals. In the industrials sector, 76% of companies in the Global 500 responded to the CDP, of which more than halfset GHG emissions reduction goals.
Furthermore, ESG disclosure is on the rise. According to a 2008 KPMG report on sustainability reporting, 79% of the 250 Global Fortune companies produce reports compared to 52% in 2005. Of the 100 top U.S. companies by revenue, 73% produced reports compared to 32% in 2005.
In contrast, EmersonElectric (Emerson) does not report materially on its sustainability efforts and does not outline specific GHGmanagement plans. Transparency on climate change abatement goals is one of the most financially significant environmental issues currently facing investors.
Occupational safety and health, vendor and labor standards, and product-related environmental impacts are particularly important ESG considerations in Emerson’s sector and have the potential to pose significant regulatory, legal, reputational and financial risks. We believe that Emerson has a positive story to tell given its environmentally-friendly products and would benefit from better disclosure.
RESOLVED
Shareholders request that Emerson Electric issue a sustainability report describing the company’s ESG performanceincludingGHG reduction targets and goals. The report should be prepared at reasonable cost, omitting proprietary information, by September1, 2011.
SUPPORTING STATEMENT
We recommend that the report include a company-wide review of policies, practices, and metrics related to ESG performance and that Emerson commit to continuous improvement in reporting. We encourage the use of the Global Reporting Initiative’s (GRI) Sustainability Reporting Guidelines (G3). The GRI ( is a globally accepted reporting framework considered the gold standard of reporting. The G3provide a flexible reporting system that allows companies to report incrementally over time.