2013 Shareholder Resolution
Company: Cincinnati Financial Corporation
Topic: Sustainability Reporting


Reporting and rigorously managing environmental, social and governance (ESG) business practices make a company more responsive to a global business environment characterized by finite natural resources, climate change, changing legislation, and heightened public expectations. Reporting helps companies integrate and gain value from existing sustainability efforts, identify gaps and opportunities, and publicize innovative practices. ESG issues can pose significant challenges to business and society, and without comprehensive disclosure stakeholders and analysts cannot ascertain how our company is meeting those challenges.

The link between strong sustainability management and value creation is increasingly evident. A 2012 review conducted by Deutsche Bank of 100 academic studies, 56 research papers, two literature reviews, and four meta-studies on sustainable investing found 89% of studies demonstrated that companies with high ESG ratings also show market-based outperformance.

Investors also seek disclosure of companies’ ESG practices, as reflected in the growth of sustainability-focused investor groups. Over 1,000 signatories to the (UN) Principles for Responsible Investment, representing over $30 trillion in assets, have publicly pledged to incorporate ESG factors into investment decisions and request standardized reporting on ESG issues.

Corporations also recognize the value of sustainability reporting. According to KPMG, 80% of Fortune Global 250 companies produce GRI-based sustainability reports. In July 2012, The Conference Board reported that 45% of S&P 500 companies produce a sustainability report.

In February 2010, the SEC issued interpretive guidance clarifying that companies should disclose material risks associated with climate change. The sustainability reporting process can help companies to analyze and mitigate these risks as well as risks to societal welfare from climate change. Without comprehensive disclosure, shareholders and other stakeholders cannot ascertain whether Cincinnati Financial Corporation is properly managing ESG issues and our company’s impact on society.


The Board of Directors shall issue an annual sustainability report describing Cincinnati Financial Corporation’s short- and long-term responses to ESG-related issues, relevant policies, practices, metrics and goals on topics such as greenhouse gas emissions, water conservation, waste minimization, energy efficiency and assessing our company’s role in reducing systemic harm to the U.S. and global economy and societal welfare from climate change, and should be prepared at a reasonable cost, omit proprietary information, and be made available to shareholders by December 31, 2013.


We recommend the report be based on Global Reporting Initiative Guidelines, and include a plan for our company to help reduce societal harm from climate change by adopting policies to:

  • help mitigate climate change by encouraging (where feasible) reduced greenhouse gas emissions by our customers and our company;
  • work with federal, state, and local governments to encourage adoption of public policies that the overwhelming majority of scientists say are needed to prevent the most harmful effects of climate change.

Opinions and estimates offered constitute Miller/Howard Investments' judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. All investments carry a certain degree of risk, including possible loss of principal. It is important to note that there are risks inherent in any investment and there can be no assurance that any asset class will provide positive performance over any period of time.

The information above is from sources deemed to be reliable and is provided strictly for your convenience. This information is not intended to be tax, legal or investment advice.

Past performance does not guarantee future results.