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Resolution Details

Company:

Skechers U.S.A.

Year:

2024

Issue Area:

Climate Change

Focus Area:

GHG Reduction and Targets

Status:

Filed

Resolution Text

WHEREAS: The Intergovernmental Panel on Climate Change reports that immediate and significant emissions reductions are required of all market sectors to stave off the worst consequences of climate change.1 In response to the climate crisis, investors are seeking transparent climate-related risk disclosures from companies, including greenhouse gas (GHG) emissions disclosures, to inform their investment decision-making.

Skechers USA, Inc. is one of the largest footwear brands in the world.2 According to the United Nations Environment Program, the fashion industry accounts for roughly ten percent of global carbon dioxide emissions.3 As much as 96% of the total emissions of fashion brands come from their value chain,4 and, as McKinsey notes, supply chain decarbonization is becoming a reputational imperative for businesses.5

Supply chain disruptions are one of the largest climate-related risks facing retailers, and the National Retail Federation warns that companies who do not address supply chain climate risk “potentially face significant losses.”6 Despite identifying climate risks, including impacts from “natural disasters or other catastrophic events” on its supply chain, as a material risk to the Company’s business,7Skechers does not disclose value chain, or Scope 3, GHG emissions, and has no emissions reductions targets.8

Skechers significantly lags nearly all its major competitors in addressing climate risk. Deckers Brands, Puma, Adidas, Nike, Under Armour, and VF Corporation have all set reduction targets for their value chain emissions and validated these targets through the Science Based Targets initiative.9 While Skechers states that it has plans to “begin undertaking efforts” to measure value chain emissions “in the future,”10 it has released no timeline for its efforts to measure and disclose value chain emissions, leaving investors without critical information regarding the Company’s efforts to mitigate climate risk.

By publicly releasing a timeline for measuring and disclosing its value chain emissions, Skechers can align with peers and assure investors that it is addressing the growing regulatory, competitive, and physical supply chain risks associated with climate change.

BE IT RESOLVED: Shareholders request Skechers publicly disclose a timeline for measuring and disclosing its value chain emissions.

SUPPORTING STATEMENT: Proponents suggest, at management’s discretion, the Company:

Provide a rationale and threshold criteria for determining if any emissions categories are deemed to be not relevant; and
Provide annual public updates on the Company’s efforts to quantify its value-chain emissions, including information on efforts to engage with its suppliers.

1 https://www.ipcc.ch/report/ar6/syr/downloads/report/IPCC_AR6_SYR_FullVolume.pdf, p.20

2 https://investors.skechers.com/press-releases/detail/603/skechers-announces-third-quarter-2023-financial-results-and

3 https://www.bloomberg.com/graphics/2022-fashion-industry-environmental-impact/?sref=TtrRgti9

4 https://www.reuters.com/sustainability/climate-energy/despite-climate-pledges-fashion-brands-way-off-track-cutting-carbon-catwalk-2023-07-31/

5 https://www.mckinsey.com/capabilities/operations/our-insights/making-supply-chain-decarbonization-happen

6 https://nrf.com/topics/sustainability/esg-tool-kit/climate-and-climate-related-risk-retail-industry

7 https://www.sec.gov/Archives/edgar/data/1065837/000156459023002740/skx-10k_20221231.htm#ITEM_1A_RISK_FACTORS, p.10

8 https://about.skechers.com/wp-content/uploads/2023/04/Skechers-Impact-Report-2022.pdf, p.13

9 https://sciencebasedtargets.org/companies-taking-action

10 https://about.skechers.com/wp-content/uploads/2023/04/Skechers-Impact-Report-2022.pdf, p. 15

 

 

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Resolution Details

Company:

Skechers U.S.A.

Year:

2023

Issue Area:

Climate Change

Focus Area:

GHG Reduction and Targets

Status:

Vote

Vote Percentage:

12.60%


Skechers U.S.A. Climate Transition Plan and GHG Reduction Goals – Proxy Memo
23.SKX_.1+Skechers+Climate+Proxy+Memo_WEB.pdf


Resolution Text

WHEREAS:  Investor demand to reduce corporate emissions reflects the reality that climate change poses a systemic risk to companies and to investor portfolios.

Experts agree that to avoid the most catastrophic effects of climate change, global temperature increase must be limited to 1.5 degrees Celsius (“1.5°C”). This will require achieving global net zero greenhouse gas emissions by 2050. Failure to reach this goal is projected to have severe economic consequences.[1] Because the window for limiting global warming to 1.5°C is quickly narrowing, immediate and aligned emissions reduction is required of all market sectors.[2]

Skechers USA, Inc. is the third-largest footwear brand in the world.[3] According to the United Nations Environment Program, the fashion industry accounts for roughly ten percent of global carbon dioxide emissions.[4]

Skechers lacks any emissions disclosures or emissions reduction targets. It also fails to identify any climate-related risk in its 10-K. Such risks include instability in global supply chains due to climate impacts, climate-related sourcing constraints, and growing regulatory risk. Skechers does identify “intense competition” as a risk factor.[5] Climate change now plays a role in consumer spending decisions,[6] and Skechers significantly lags behind nearly all of its major competitors in addressing climate risk.

Deckers Brands, Puma, Adidas, Nike, Under Armour, and VF Corporation have set reduction targets for their Scope 1, 2, and 3 emissions and validated these targets through the Science Based Targets initiative.[7] Most of Skechers’ American peers, including Deckers Brands, Nike, Under Armour, and Wolverine Worldwide, also identify climate-related risks in their annual reports.

Despite significant shareholder support for a similar proposal at Skechers last year, the company discloses no progress in measuring or reducing its emissions or in assessing and mitigating climate-related risk.

By setting science-based reduction targets for its Scope 1 through 3 emissions, disclosing a decarbonization plan, and demonstrating progress towards these goals, Skechers can align with peers and provide investors with assurance that it is addressing the regulatory, competitive, and physical risks associated with climate change.

BE IT RESOLVED:  Shareholders request the Board issue a report, at reasonable expense and excluding confidential information, disclosing how Skechers intends to reduce its full value chain greenhouse gas emissions in alignment with the Paris Agreement’s 1.5°C goal requiring Net Zero emissions by 2050. 

SUPPORTING STATEMENT:  Proponents recommend, at Board discretion, the report include:

Disclosure of all relevant Scope 1 through 3 emissions;
A timeline for setting 1.5°C-aligned near-term and net zero by 2050 reduction goals;
A climate transition plan to achieve emissions reduction goals across all relevant emissions Scopes;
A rationale for any decision not to set 1.5°C-aligned targets;
A commitment to report annually on progress in meeting emissions reduction goals.

[1] https://www.nytimes.com/2021/04/22/climate/climate-change-economy.html

[2] https://report.ipcc.ch/ar6wg3/pdf/IPCC_AR6_WGIII_FinalDraft_FullReport.pdf

[3] https://investors.skechers.com/press-releases/detail/526/skechers-announces-record-first-quarter-2022-financial

[4] https://www.bloomberg.com/graphics/2022-fashion-industry-environmental-impact/?sref=TtrRgti9

[5] https://investors.skechers.com/financial-data/all-sec-filings/content/0001564590-22-007170/0001564590-22-007170.pdf

[6] https://www.jpmorgan.com/insights/research/climate-change-consumer-spending

[7] https://sciencebasedtargets.org/companies-taking-action

  

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