Organization: RPC, Inc.

Year: 2015

Description: RESOLVED:  Shareholders request that RPC, Inc. issue a sustainability report describing the company’s environmental, social and governance (ESG) risks and opportunities including greenhouse gas (GHG) emissions reduction targets and goals. The report should be available by year end 2015, prepared at reasonable cost, omitting proprietary information.
 
SUPPORTING STATEMENT: We believe tracking and reporting ESG practices makes a company more responsive to a global business environment characterized by finite natural resources, changing legislation, and heightened public expectations for corporate accountability. Reporting also helps companies better integrate and gain strategic value from existing sustainability efforts, identify gaps and opportunities, develop company-wide communications, recruit and retain employees, and receive feedback. 
 
Support for and the practice of sustainability reporting continues to gain momentum:

• In 2013, KPMG found that of 4,100 global companies 71% had ESG reports.
• The United Nations Principles for Responsible Investment has more than 1,200 signatories with over $45 trillion of assets under management.  These members seek ESG information from companies to be able to analyze fully the risks and opportunities associated with existing and potential investments.
• Carbon Disclosure Project (CDP), representing 767 institutional investors globally with approximately $92 trillion in assets, calls for company disclosure on Greenhouse Gas emissions and climate change management programs. Over two thirds of the S&P 500 now report to CDP.

Currently, RPC does not report on its sustainability efforts nor disclose GHG data.  RPC claimed in the 2014 proxy that it already sets “annual quality, health, safety and environmental targets for improvement,” and monitors performance.  However, shareholders currently have no information with which to assess the validity and extent of this statement.  We believe that this is a serious gap. 
 
Climate change is one of the most financially significant environmental issues currently facing RPC’s investors and customers. Occupational safety and health, vendor and labor standards, waste and water reduction targets and product related environmental impacts are other particularly important ESG considerations in RPC’s sector.  Not managing these properly could pose significant regulatory, legal, reputational and financial risks.
 
Competitors like Baker Hughes Inc., Halliburton Company, and Schlumberger offer shareholders important information through comprehensive sustainability reports and by responding to CDP.  C&J Energy, a more size-comparable competitor, has also begun to exhibit better ESG disclosure than RPC by aggregating their Quality, Health, Safety, and Environmental Policy, and other policies and commitments onto a “Responsibility” section of their website. By not reporting, we are concerned that RPC may be missing opportunities that larger peers are actively recognizing and lagging its peer group in terms of risk management.  
 
We recommend that the report include a company-wide review of policies, practices, metrics, and goals related to ESG performance. A Global Reporting Initiative (GRI) index could be a helpful checklist for guidance.  The GRI Guidelines are the most widely used reporting framework, enabling companies to focus on their most important ESG issues