Ralph Lauren report to address shareholder issue
May 28, 2013, 9:21 PM
ALBANY, N.Y. (AP) – A shareholder resolution asking Ralph Lauren Corp. to report on social and environmental issues has been withdrawn by New York Comptroller Thomas DiNapoli after the global retailer promised to issue such a report next year.
The Manhattan-based company said it will post the report on its website when filing its next annual report in May 2014. In a letter earlier this month, the company asked that the resolution be withdrawn.
“The company is prepared to issue a sustainability report to shareholders, which will include the company’s definition of sustainability and a review of its policies, practices and metrics related to long-term social and environmental sustainability,” wrote Vice President Yen D. Chu, also corporate and compliance counsel.
DiNapoli is the sole trustee of New York’s $160 billion pension fund for state and local government workers, which recently counted 191,813 shares of Ralph Lauren stock valued at $35.9 million in its portfolio. He has asked several companies the pension invests in to issue such reports, saying the analysis limits shareholder risk.
According to the comptroller’s office, the agreement means the company will produce a report measuring and analysis its labor practices, human rights and environmental impacts.
“Over the past few years, the New York State Common Retirement fund has made it a priority to engage with portfolio companies on labor practices and human rights,” DiNapoli said Tuesday. “There is no daylight between protecting shareholder value and promoting practices that can protect workers’ rights and save lives.”
The wholesaler and retailer of clothing, accessories and housewares declined immediate comment Tuesday.
Ralph Lauren last week reported annual net revenues of $6.9 billion for its fiscal year and operating income of $1.1 billion. At the close of the quarter, it counted 388 directly operated stores globally, 494 concession shop locations and international licensing partners operating almost 160 other stores and shops.
“We require our licensing partners and independent manufacturers to operate in compliance with applicable laws and regulations,” its latest annual report said, noting possible disruptions could result from violations. “While our internal and vendor operating guidelines promote ethical business practices and our employees periodically visit and monitor the operations of our independent manufacturers, we do not control these manufacturers or their labor practices.”
The New York comptroller’s office has increased its focus on shareholder issues, in concert with other pension funds, under DiNapoli. “We think the companies need to consider all factors, not just financial gain. What are the environmental costs and risks? What are the workplace safety costs and risks?”
In March, the comptroller announced agreements with Best Buy and Bed Bath & Beyond to take it another step and urge their manufacturers and suppliers to report on workplace safety, human and worker rights and environmental compliance and withdrew shareholder resolutions. DiNapoli said those companies already had sustainability policies on the books like the one Ralph Lauren just agreed to.
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