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Illinois Toolworks – Sustainability Report (2005 – 2006)

Illinois Toolworks – Sustainability Report (2005 – 2006)

Outcome: Successfully Withdrawn

WHEREAS: Disclosure of key information is a founding principle of our capital markets.

Investors increasingly seek disclosure of companies’ social and environmental practices in the belief that they impact shareholder value. Many investors believe companies that are good employers, environmental stewards, and corporate citizens will more likely prosper over the long term and be accepted by local communities. Mainstream financial companies are seeking tolls to understand the links between sustainability performance and capital markets. According to environmental research consultant Innovest, major investment firms including ABN-AMRO, Schroders, T. Rowe Price, and Legg Mason subscribe to information on companies’ social and environmental practices to help make investment decisions.

A growing number of companies are issuing sustainability reports. According to the Dow Jones Sustainability Group, sustainability includes: “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.”

Companies increasingly recognize that transparency and dialogue about sustainability are elements of business success. For example, General Electric’s CEO writes, “In a recovering capital market, these numbers show that we are crossing the threshold where solving energy and environmental problems is the profitable thing to do as well as the right one – and where fewer pounds of emissions can mean more pounds on the bottom line.” Ford Motor Company states, “sustainability issues are neither incidental nor avoidable – they are at the heart of our business.”

Companies increasingly recognize that transparency and dialogue about sustainability are elements of business success. For example, General Electric’s CEO writes, “In a recovering capital market, these numbers show that we are crossing the threshold where solving energy and environmental problems is the profitable thing to do as well as the right one – and where fewer pounds of emissions can mean more pounds on the bottom line.” Ford Motor Company states, “sustainability issues are neither incidental nor avoidable – they are at the heart of our business.”

Many global organizations, like the European Union Framework for Corporate Social Responsibility, support corporate sustainability reporting. The national governments of Australia, Japan and the United Kingdom recommend sustainability reporting. In addition, companies listed on the Johannesburg and Paris Stock Exchanges are now required to report non-financial information related to corporate social and environmental performance.

 

RESOLVED: That shareholders request the company disclose its social, environmental and economic performance to the public by issuing a sustainability report to shareholders, at reasonable cost, and omitting proprietary information, by September 1, 2006.

 

Supporting Statement

The report should include the company’s definition of sustainability, as well as a review of company policies, management systems, and performance indicators related to employees, suppliers and the environment.

We recommend that the company consider using the Global Reporting Initiative’s Sustainability Reporting Guidelines (GRI Guidelines) to prepare the report. The GRI is an international standard-setting organization with representatives from the business, environment, human rights and labor organizations. The Guidelines provide companies with guidance for report content, including performance in six categories (direct economic impacts, environmental, labor practices, human rights, society, and product responsibility). The Guidelines provide a flexible reporting system that allows a company to omit some content while still utilizing the GRI framework. More than 500 companies, including General Electric, British Telecom, Intel, Electrolux, Cisco, General Motors, KLM, Nike, Nokia, and Volkswagen, currently use the Guidelines for sustainability reporting.

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