Organization: Layne Christensen Company

Year: 2010

Description: WHEREAS: Walden Asset Management believes reporting on environmental, social and governance (ESG) business practices makes a company more adaptable to the global business environment, one with finite natural resources, shifting legislation, and changing public expectations of corporate behavior. Reporting also helps companies better integrate and gain strategic value from existing corporate social responsibility efforts, identify gaps and opportunities, develop company-wide communications, publicize innovative practices and receive feedback.
 
According to a 2008 KPMG report on sustainability reporting 79% of the Global Fortune 250 companies, produce reports compared to 52% in 2005. Of the 100 top U.S. companies by revenue, 73% produce reports compared to 32% in 2005. Small and medium sized companies are beginning to follow this trend.
 
Critical ESG considerations include environmental impact, occupational safety and health, diversity, and community relations, as these areas can pose significant regulatory, legal, reputational and financial risks to business. We believe that Layne Christensen has a positive story to tell and benefits from understanding the risks and opportunities of various sustainability issues.
 
As stated by the CEO Water Mandate: Water scarcity and related problems pose material risks but can also, when well managed, create opportunities for improvement and innovation.¹ JPMorgan Chase expects that more companies will be under increasing pressure from investors to provide detailed statements on their water-related risks.²
 
The Carbon Disclosure Project (CDP), representing 475 institutional investors globally with $55 trillion in assets, has for years requested greater disclosure from companies on their climate change management programs. The 2009 response rate to the CDP for S&P 500 and the FTSE Global 500 was 66% and 82%, respectively. 
 
Layne Christensen does not report in any detail on its sustainability efforts and does not outline sustainable water use policies or greenhouse gas emissions data and reduction plans. Transparency on climate change is particularly crucial as it is one of the most financially significant environmental issues currently facing investors. 
 
RESOLVED  Shareholders request that the Board of Directors issue a sustainability report describing the company’s ESG performance and goals, along with sustainable water management and greenhouse gas emissions and management plans for their reduction. The report will be prepared at reasonable cost, omitting proprietary information to be available to investors by November 1, 2010. 
 
Supporting Statement: We encourage Layne Christensen to use the Global Reporting Initiative’s (GRI) Sustainability Reporting Guidelines (G3)³ to prepare the report describing corporate strategies to sustainably manage water use and addressing other environmental and social impacts such as energy use, waste management, and employee and community relations and to use the Carbon Disclosure Project (CDP)⁴as a means to specifically report on its greenhouse gas emissions and reduction efforts. The GRI is an international organization developed with representatives from the business, environmental, human rights and labor communities. The G3 provide guidance on report content, addressing, among other issues, direct economic impacts, environmental performance, international labor standards and practices, and product responsibility. The Guidelines provide a flexible reporting system that allows companies to report incrementally over time.
 
 
1 http://www.unglobalcompact.org/Issues/Environment/CEO_Water_Mandate/
   http://www.unglobalcompact.org/docs/news_events/8.1/Ceo_water_mandate.pdf
2 Watching Water: A Guide to Evaluating Corporate Risks in a Thirsty World, JPMorgan Chase, March 31, 2008
3 http://www.globalreporting.org/ReportingFramework/G3Guidelines/
4 https://www.cdproject.net/en-US/Respond/Pages/CDP-Investors.aspx