Grafton Group addresses shareholder concerns over climate goals and gender diversity

Grafton Group addresses shareholder concerns over climate goals and gender diversity

Grafton Group, the Irish DIY retail giant, addressed several concerns raised by shareholders regarding climate change targets, gender diversity, and the re-election of its non-executive chairman Michael Roney. The FTSE 250 firm launched a consultation following a vote at its annual general meeting in May, where over a fifth of its investors opposed Roney's re-election.

On Monday, Grafton revealed that a combination of factors led to the shareholder rebellion. Two institutional shareholders cited the company's lack of net-zero targets and unpublished data for Scope 3 emissions - emissions indirectly produced through the firm's value chain - as reasons for their dissent. Another pair of shareholders pointed to insufficient gender diversity on the board and at senior management levels as their cause for concern.

Responding to these issues last week, Grafton pledged to deliver net-zero carbon emissions by the end of 2050 and set science-based targets by the end of 2024. The company is currently compiling accurate Scope 3 data under a detailed and complex process to meet these targets. The firm also outlined plans to develop a transition plan detailing how these targets will be achieved, monitored, and the estimated financial impact of their implementation.

Regarding gender diversity, Grafton stated that three out of eight board directors are women, accounting for 38% representation. The board has committed to achieving the FTSE Women Leaders Review target of having a minimum of 40% board positions held by women by 2025. However, Grafton acknowledged that some shareholders have set more stringent targets than this. The firm stated that it prioritizes appointing women to leadership positions where possible and is committed to increasing women representation in senior leadership roles across the group.

Addressing shareholders' concerns over Michael Roney's other commitments, Grafton said its nomination committee monitors all directors' external obligations and would take appropriate action if any concerns arose about their ability to dedicate sufficient time to their roles. The company reaffirmed its belief in Roney's commitment to his role as chair and his effectiveness in discharging his duties.

Grafton cited Roney's significant role in leading the company's response to the pandemic and his involvement in major strategic decisions in recent years. It also noted his leadership in searching for a new chief executive, which resulted in Eric Born's appointment in 2022.

The firm plans to provide additional details on these matters in its 2023 annual report.

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