|Customer, employee and other types of surveys are routinely conducted to determine those areas where we can improve, which is essential for the continued success of the company. Results of key customer and employee surveys recently conducted are provided in the supporting documents below.
Johnson Controls is listed on many of the global sustainability indexes such as the Dow Jones Sustainability Index (North America and World), FTSE4Good Index Series, KLD Index series including the Global Climate 100 and the Domini 400 Social index, the Calvert Social Index, Maplecroft Climate Innovation Index and the Disclosure Index for the Carbon Disclosure Project. Being listed on these prestigious indices reflects our strong commitment to sustainability, transparency, integrity, governance, human rights, community involvement, environmental leadership, etc. Overall, being recognized for our leadership in sustainability better positions us for continued success.
Johnson Controls meets and cooresponds with a variety of stakeholders, including non-government organizations (NGOs) to get their input on an array of matters. For instance, Johnson Controls meets with several members of the Interfaith Center for Corporate Responsibility (ICCR) to discuss specific current and emerging issues that affect or may affect the Company. Topics discussed include human rights policies, sustainability reporting, supply chain management, climate change and our GRI Report. .
For example, in 2003, the ICCR issued a shareholder resolution requesting that we publish a Sustainability Report. At that time, Johnson Controls had already published its first Annual Environmental, Safety and Health Report and was considering expanding the report to include more social information as data collection processes became more refined. The resolution did not secure the minimum shareholder proxy votes, but Johnson Controls agreed to on-going dialogue with ICCR and published a Sustainability Report in January 2004 (covering Fiscal 2003). The report was a company-wide success. It received considerable praise from employees and customers and helped us to better appreciate the business value of sustainability reporting. In 2005, we combined our Sustainability Report with our Annual Report and created a summary report, called the Business and Sustainability Report. To complement the printed summary and in an effort to be fully transparent, we annually updated an online GRI Matrix Report that followed the Global Reporting Initiative (GRI) 2002 guidelines. Starting in 2008, we followed the newly introduced GRI G3 guidelines. The online report is intended to provide details about our economic, environmental and social performance for all stakeholders.
Prior to updating this online report for the current year, we asked ICCR to review our latest GRI Report and provide comments to help us improve it. Johnson Controls sincerely appreciates ICCR’s efforts for reviewing and providing comments. We believe their input helps us improve and gives us a competitive edge by allowing us to better understand our stakeholders and the marketplace. Each comment was reviewed and every attempt was made to address their comments in this updated version, particularly those that add value or do not jeopardize information considered company confidential.
In addition, we keep Domini Social Investments, Waldon Asset Management and many other social investors apprised of our sustainability efforts. For example, in 2004, Domini Social Investments, Inc. and members of the ICCR asked Johnson Controls to investigate the social and environmental activities of Doe Run-Peru, one of our minor lead suppliers. The investigation revealed that the supplier purchased a problem facility from the Peruvian government in 1997 and had spent millions on improvement that were not being recognized by various local NGOs. A meeting with Doe Run-Peru’s top management, Johnson Controls, ICCR and Domini helped all parties better understand each other’s concerns and the progress actually being made. As a result, Johnson Controls reviewed its supply chain management process and made improvements to its supply chain management practices that we feel will help minimize our exposure to many supply chain risks. The Doe Run Peru facility closed for several years and recently reopened.
We will continue our overall supply chain management process with interested stakeholders as appropraite.
In the timeframe of 2008 - 2010, ICCR and another prominent social investor requested an explanation about allegations that Johnson Controls discriminated against its employees when laying off employees at its Puebla facility in Mexico. In 2010, a third party investigation was conducted by the independent auditor, Verite, and noted several findings. A corrective action plan was devised and implemented. An executive summary of the audit and corrective action plan was shared and discussed with ICCR and other interested social investors and stakeholders. We have also appointed a full time individual to monitor corective plan implementation and to work closely with employees and unions to prevent a reoccurrence. Facility supervisory personnel have been retrained as well. Further, we discussed our new Human Rights & Sustainability Policy with ICCR and they provided input for improving it that we incorporated in the new policy.
In September 2011, some local Chinese media reported that our Shanghai battery plant was being held responsible for lead contamination in the local community. On Sept. 13, the Pudong New Area government requested that Johnson Controls suspend lead-related production in our Shanghai plant as we achieved our lead quota for the year, and we complied with this request. Johnson Controls took immediate steps to minimize the impact of this action on our employees. We fully cooperated with the government and industry experts to understand and help address this issue. We asked industry experts in China to do a formal investigation of the blood-lead poisoning issue. This independent investigation, conducted by the Lead-acid Battery Sub-Commission of the China Electric Equipment Industry Association, indicated that Johnson Controls could not be the cause of the elevated blood-lead levels that have been found in some children in the Kangqiao area, Pudong, Shanghai. The results corroborated our own data and proved that emissions from our battery plant could not be the cause of elevated blood-lead levels found in the community. The independent panel was led by Mr. Xia Qing, an environmental scientist and former deputy chairman and chief engineer of China Research Academy of Environmental Science, and included several experts in environmental protection, health, soil remediation, and the lead-acid battery industry. The panel investigated potential sites that could have contributed to the elevated blood-lead incidents in the Kangqiao area. It also analyzed the various lead sources and the potential pathways from these sites to the environment in the nearby community.
While the study indicated that Johnson Controls could not be the cause of the blood-lead incidents in Kangqiao, it did identify an abnormally high zone of lead content from a waste recycling facility near the residential area where 80 percent of the affected children live. In this contaminated area, lead content was found to be over three times the present Chinese national standard and 10 times the forthcoming Chinese national standard. It is also found that the zinc content of this area was over 15 times the present Chinese national standards.
Johnson Controls has a long-term commitment to China. We will continue to work with the government in a transparent and cooperative manner focusing on scientifically assessing the environmental issues in Kangqiao while responding to the needs of the community, our employees and our customers.
Johnson Controls has responded to social investors on this issue and is keeping them up to date on the latest information in the spirit of transparency with our external stakeholders around the world.
In late 2012, Walden Asset Management and a group of social investors inquired about our lead management practices in Mexico. We responded to their concerns and are continuing the dialogue with them. Please see attachment in Supporting References for our response. Subsequent to this response letter, in 2013, we have had additional meetings to review additional details about our lead management data. We responded to additional queries about lead emissions and employee blood lead levels as follows:
“Controlling lead exposure is a top priority for Power Solutions.
First, we are committed to continuous improvement in the operation and maintenance of proven technologies at our facilities to reduce exposure potential. These include technologies such as high-efficiency particulate air filters, air scrubbers and exhaust systems.
Second, we regularly conduct blood lead testing for manufacturing employees-- monthly during the first 3 months of employment and every 6 months at minimum afterwards. Licensed health care professionals (both in-house and external) conduct these tests and assess results. During 2012 100% of our manufacturing employees across our global operations tested below 40 micrograms per deciliter. 99% of our manufacturing workforce across the globe also tested below 30 micrograms – the recognized global occupational standard set by industry.
Percentage of employees below 30 micrograms per deciliter by region:100% in Europe, Asia and Mexico; 99% for both South America and the United States.
We are proud of this achievement, and our on-going implementation of continuous improvement processes to perform at even higher levels.”