Organization: HollyFrontier Corporation

Year: 2015

Description: RESOLVED: Shareholders request that HollyFrontier Corporation (HollyFrontier) issue a sustainability report describing the company’s environmental, social and governance (ESG) performance and goals, including greenhouse gas (GHG) reduction goals. The report should be available on the company website by November 1, 2015, prepared at reasonable cost, omitting proprietary information.

WHEREAS: 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.

HollyFrontier states “environmental stewardship is a core value” and that the company “strive[s] for continual improvement in minimizing our environmental footprint by reducing waste, emissions and other releases.” However, investors currently do not have access to evaluative data in order to assess performance. Industry peers including Ashland Inc., Eastman Chemical Company, Fluor Corporation, Hess Corporation, Huntsman Corporation, LyondellBasell Industries, PPG Industries, and Sunoco, issue sustainability reports, report on their GHG emissions, or both. Unfortunately, HollyFrontier lags behind, does not issue a sustainability report, has not set GHG reduction goals and also has not responded to CDP’s Investor or Water requests.

Support and demand for sustainability reporting continues to gain momentum:

• In 2013, KPMG found that of 4,100 surveyed global companies seventy-one percent had ESG reports.
• Investors with $92 trillion in assets support CDP’s (formerly Carbon Disclosure Project) annual request for disclosure from over 6,000 companies on disclosure of carbon emissions, reduction goals, and climate change strategies to address these risks. CDP received over an 80% response rate in 2013. In 2013, 75 percent of the 334 S&P 500 company respondents disclosed emission reduction targets.
• CDP Water respondents in the energy sector reported that “water poses a substantive risk to their business,” which include physical risks such as water stress, scarcity and seasonal variability.

Creating clear-cut goals can help HollyFrontier to significantly reduce its carbon footprint by implementing a disciplined business strategy to cut emissions and to better manage environmental, regulatory and license to operate risks. Additionally, reporting on issues such as water can help HollyFrontier and investors track water risk and water management in refining operations that can both potentially reduce volume and costs and also reductions in wastewater flow. Data on occupational safety and health, vendor and labor standards, and waste reduction targets are other important factors.

SUPPORTING STATEMENT:  We recommend the report include a company-wide review of policies, practices and metrics related to ESG performance [using the Global Reporting Initiative (GRI) Guidelines as a flexible framework] and that HollyFrontier commit to continuous improvement in reporting. The GRI Guidelines are an adaptable and globally accepted sustainability reporting framework.