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Hologic – Greenhouse Gas Emissions (2016)

Hologic – Greenhouse Gas Emissions (2016)

Outcome: Successfully withdrawn after a commitment from Hologic to publish GHG reduction goals by September 2016.

RESOLVED:
Shareholders request the Board of Directors adopt quantitative, time-bound goals for reducing total greenhouse gas (GHG) emissions from Hologic products and operations and issue a report by summer 2016, at reasonable cost and omitting proprietary information, on its plans to achieve these goals.

WHEREAS:

Managing and reporting environmental, social and governance (ESG) business practices helps companies compete in a global business environment characterized by finite natural resources, changing legislation, and heightened public expectations. The costs of failing to address climate change are significant and according to a 2015 report by Citigroup, could lead to a $72 trillion loss to global GDP. Risky Business, a recent analysis of climate change impact, finds serious economic effects including property damage, shifting agricultural patterns, reduced labor productivity, and increased energy costs. These effects could substantially impact a company’s business operations, revenue, or expenditure.
Reporting allows companies to publicize and gain strategic value from existing sustainability efforts and identify emerging risks and opportunities. Setting GHG emission targets is widespread among U.S. companies and can have positive financial outcomes. Presently, 60 percent of Fortune 100 companies have GHG reduction commitments, renewable energy commitments, or both.
A report published by WWF, CDP, and McKinsey & Company, The 3% Solution: Driving Profits Through Carbon Reduction, found that companies with GHG targets achieved an average of 9% better return on investment than companies without targets.

Currently Hologic does not publicly set GHG emissions reductions or disclose relevant ESG risks and opportunities through a sustainability report. However, the link between strong sustainability management and value creation is increasingly evident. A 2012 Deutsche Bank review of academic studies found 89% of studies demonstrated that companies with high ESG ratings also show market-based outperformance, and 85% of the studies indicated that these companies experienced accounting-based outperformance. ESG issues can pose significant risks to business, and without proper disclosure, stakeholders and analysts cannot ascertain whether the company is managing its ESG exposure.
We are concerned Hologic may be lagging behind industry peers. Baxter, Becton Dickinson, and GE have already identified relevant ESG factors and address these through sustainability reports and metrics. For example, Becton Dickinson plans to reduce scope 1 & 2 emissions by 50% by 2020. In addition, peer Baxter has realized savings of $41 million from energy efficiency activities since 2005.

Investors with $92 trillion in assets have supported the Carbon Disclosure Project (CDP) which received responses from 81% of companies in the Global 500 in 2013. Hologic’s response to date on how it is managing GHG emissions and climate related risks and opportunities falls short. Hologic declined to participate in the 2015 CDP and has not publicly set GHG emissions reductions or climate related goals. We believe this may have negative consequences for Hologic and that it should address these issues with consideration of IPCC guidance.

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