A new proposal to Baker Hughes, Diamondback Energy, Entergy and Halliburton asks for a report “using quantitative indicators where appropriate any policies and practices to reduce climate related water risk and prepare for water supply uncertainties associated with climate change.”

2020 COULD BE PIVOTAL YEAR FOR SUSTAINABILITY ACCOUNTING STANDARDS

PAUL RISSMAN
Co-founder, Rights CoLab

The Sustainability Accounting Standards Board (SASB) was formed in 2011 to formulate social and environmental disclosure standards in line with definitions of financial materiality under U.S. securities laws. Financial materiality is a critical feature from the standpoint of mainstream investors, as many of them construe their fiduciary responsibilities to mean that any engagement or voting effort directed toward ESG issues must have monetary benefits for their customers.

Another from As You Sow at Sanderson Farms was far more detailed:

in order to allow tracking of water stress trends and impacts that are expected to be exacerbated by climate change, the Board of Directors report to shareholders on quantitative metrics identified by the Sustainability Accounting Standards Board (SASB) as providing material information on water resource risks for the Meat, Poultry and Dairy sector by 180 days after the 2020 Annual Meeting, at reasonable expense and excluding confidential information, and annually thereafter, including:

• Total water withdrawn, and percentage in regions with High or Extremely High Baseline Water Stress;

• Percentage of contracts with producers located in regions with High or Extremely High Baseline Water Stress;

• Percentage of animal feed sourced from regions with High or Extremely High Baseline Water Stress.

The issue was last raised at the company in 2016, when a proposal seeking a water stewardship policy earned 27.4 percent support. This time around, it received just half that—11.1 percent. Management said it is dedicated to water stewardship and that it reports to investors on its initiatives and practices through its Corporate Responsibility Report and its response to the CDP water questionnaire, although it did not actually report to CDP.

As You Sow invoked the Sustainability Accounting Standards Board (SASB) standards in a resolution at Skyworks Solutions that asked for a report on “water management risks” that consider the standards SASB set out for the semiconductor industry. The group withdrew after reaching an agreement with the company.

Finally, Mercy Investments wants Pilgrim’s Pride to report by December “assessing if and how the company plans to increase the scale, pace, and rigor of its efforts to reduce water pollution from its supply chain.”