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June 17, 2011
Layne Christensen Publishes First Sustainability Report
    by Robert Kropp

Despite rebuffing efforts by Walden Asset Management to engage on the issue, the company recommended a vote in favor of a resolution calling for sustainability reporting, and publishes a first report that is informed by Global Reporting Initiative guidelines.


During the 2010 proxy season, 101 climate and energy-related shareowner resolutions were filed with 88 US and Canadian companies. Fifty-one of them were withdrawn following successful engagement. Among the 42 resolutions that went to a vote, 16 received votes of 30% or more.

A record-breaking majority vote was recorded last year in support of a resolution filed by Walden Asset Management at Layne Christensen, a resource exploration and production company. The resolution, which called on the company to produce an annual sustainability report, received 60.3% of the shareowner vote.

According to Walden, "Company management rebuffed attempts by investors to discuss the importance of sustainability reporting and to find common ground. As a result Walden and Christian Brothers Investment Services (CBIS) re-filed the proposal in 2011."

Considering the unwillingness of the company to engage with investors on the issue, an unexpected turn of events then occurred. In its 2011 proxy statement, the company stated, "The Board of Directors unanimously recommends a vote FOR this stockholder proposal."

"The Company recognizes the importance, as both an ethical and a business responsibility, of addressing the environmental and social impacts of our business," the proxy statement continued. "Because the Company is genuinely concerned about the issues covered in this stockholder proposal and because a similarly-proposed stockholder resolution received a 60% vote in favor at last year's annual meeting, the Company has undertaken to prepare a sustainability report." The shareowner vote in favor of the resolution was 92.8%.

Layne Christensen's first sustainability report, which, according to Walden, "is informed by the Global Reporting Initiative (GRI) guidelines," has been published. In it, Andrew B. Schmitt, the company's CEO, wrote, "This report enables us to not only discuss the ways in which we are a solution provider, but to consider how we might more strategically integrate sustainability into our organizational objectives."

"This is a curious chapter with a company," stated Timothy Smith, Director of environmental, social, and corporate governance (ESG) Shareowner Engagement at Walden. "Notwithstanding the poor communication, we are certainly thrilled that Layne appears to understand the value of increased transparency on environmental, social and governance policies and performance."

"Without a doubt, shareholder interest prompted the company to make this 180 degree change," Smith continued.

Marcela Pinilla, ESG Analyst at Walden, added, "Clearly one future area for improvement is to institute a stakeholder engagement process."

 

 
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