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St. Jude Medical – Sustainability Report (2011)

St. Jude Medical – Sustainability Report (2011)

Outcome: Successfully Withdrawn

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 significant environmental, social and governance (ESG) factors 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 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 constructive feedback.

Companies such as Bloomberg provide information 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, requests greater disclosure from companies on their climate change management programs. The 2010 company response rate to the CDP for the S&P 500 was more than 70% and at least 82% for the FTSE Global Equity Index Series.

Furthermore, disclosure of ESG-related factors 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.

Industry peers like Baxter International, Medtronic, Johnson & Johnson and Boston Scientific have identified relevant ESG factors and address them through sustainability reports.

In contrast, St. Jude Medical (St. Jude) does not report details on its sustainability efforts and declined to participate in the CDP. Transparency on climate change abatement goals is one of the most financially significant environmental issues currently facing investors.

Moreover, last year this resolution received a shareholder vote of 44%, indicating strong support for sustainability reporting.

Occupational safety and health, vendor standards, and product-related environmental impacts are particularly important ESG considerations for St. Jude and can pose significant regulatory, legal, reputational and financial risks. Investors currently have no way to assess performance in these areas. Already, large healthcare providers such as Kaiser Permanente require suppliers to provide environmental data on medical equipment and products purchased.

RESOLVED

Shareholders request that St. Jude Medical issue a sustainability report describing the company’s ESG performance including GHG reduction targets and goals. The report should be prepared at reasonable cost, omitting proprietary information, by September 1, 2011.

SUPPORTING STATEMENT

We recommend that the report include a company-wide review of policies, practices, and metrics related to ESG performance and that St. Jude commit to continuous improvement in reporting. We encourage using the Global Reporting Initiative’s (GRI) Sustainability Reporting Guidelines (G3). The GRI (www.globalreporting.org) is a globally accepted reporting framework considered the gold standard of reporting. The G3 provide a flexible reporting system that promotes incremental improvement over time.

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