Organization: St. Jude Medical Inc.

Year: 2010

Description: WHEREAS: The Deloitte Center for Health Solutions December 2008 report defines sustainability in healthcare as “The continual improvement of business operations to ensure long-term resource availability through environmental, socially sensitive, and transparent performance as it relates to health consumers, business partners, and the community.” 
 
The report argues: Sustainability efforts are especially important in health care organizations because they are implicit in the overarching credo of the health profession – to do no harm. Furthermore, they are “a critical business issue that is quickly becoming a requirement.” Health care companies have yet to fully leverage their influence over providers, suppliers and consumers in their value chain, from influencing manufacturing practices and reducing emissions from distribution channels to enabling the safe collection and disposal of products.
 
We believe sustainability reporting on such business practices makes a company more responsive 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.
 
Today, companies such as Goldman Sachs and Morgan Stanley collect information on companies' environmental, social and governance (ESG) practices to assist in investment decisions. The Carbon Disclosure Project (CDP), representing 475 institutional investors with $55 trillion in assets, has for years requested greater disclosure from companies on their climate change management programs.
 
According to a 2008 KPMG report on sustainability reporting, of the 250 Global Fortune companies, 79% produce reports compared to 52% in 2005. Of the 100 top U.S. companies by revenue, 73% produce reports compared to 32% in 2005. Industry peers like Baxter International, Boston Scientific and Medtronic have identified ESG factors relevant to their business and addressed them strategically through sustainability programs and reports.
 
In contrast, St. Jude Medical did not respond to the CDP questionnaire and does not report materially on its sustainability efforts.
 
We ask the company to make clear to shareholders that it is taking the necessary steps to identify, understand, monitor, and manage ESG factors that are material to its long term business.   
 
RESOLVED: Shareholders request that the Board of Directors issue a sustainability report describing the company’s ESG performance and goals, prepared at reasonable cost, and omitting proprietary information, by September 1, 2010. 
 
Supporting Statement: The report should include a company-wide review of company policies, practices, and metrics related to ESG performance along with clear plans for greenhouse gas emissions management.
 
We encourage St. Jude Medical to use the Global Reporting Initiative’s (GRI) Sustainability Reporting Guidelines (G3) to prepare the report. The GRI (www.globalreporting.org) 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, human rights policies and product responsibility. The Guidelines provide a flexible reporting system that allows companies to report incrementally over time.