The company has drawn praise for its 10K and proxy statement
‘We have developed an impact strategy that reflects the positive economic, social and environmental impact that we want to have on the world while advancing and complementing our business strategy,’ notes the Impact Reporting section of Etsy’s IR website. It’s clear the company takes ESG seriously and strives to embed it into its practices as well as its reporting.
The company’s 2019 proxy statement included several mentions of its ESG strategy, all contained within the proxy summary. Just below the section on business results and financial performance, the proxy team includes a section updating investors on the company’s impact strategy. The section explains, in clear language, why the impact strategy is important to the business and outlines a series of goals the company set itself in 2018. It then reports on the company’s progress in 2018 and, as a result, its goals for 2019.
This is followed by a section on culture and engagement, which relates solely to employee engagement, benefits and retention. The Etsy team publishes the results of its latest employee engagement survey, as well as explaining some of the employee benefits available to staff. Despite growing investor focus on human capital management issues, it’s extremely rare to see a company address them so prominently in its proxy statement. By giving this section the same prominence as the company’s financial performance and impact strategy, it sends a strong message about how integrated the approach is to workforce management.
The final mention of E or S issues in the proxy summary is in relation to shareholder engagement. The team pledges to update investors on environmental and social issues throughout the year, again placing these topics on the same level as governance mainstays like executive compensation.
Integration is hugely important for the team behind Etsy’s investor facing communications, Deb Wasser, vice president of investor relations, tells IR Magazine. This is most evident in the company’s 10K, which it publishes in tandem with the proxy statement. In 2019, the IR, sustainability and communications teams worked together to combine the 10K and the impact report, adopting a more European style of integrated reporting involving financial and non-financial information in one investor-facing filing.
‘Until this year, we – like many companies – had divided our public reporting into two separate workstreams,’ writes Hilary Young, senior sustainability manager at Etsy, in a post on Medium.com. ‘We had a 10K, filed in line with SEC requirements and filing deadlines, and we had an impact report, which was usually released a few months later. As we continued to integrate impact into the heart of our business, we saw an opportunity to change our reporting to reflect this deeper integration – so now we have just one report.’
The team used the SASB materiality framework for the report. It also sought third-party assurance of several data points. Having received assurance of its carbon and energy data from PwC since 2015, it also secured assurance of its diversity and inclusion metrics. The publication has received significant investor praise and helped the company add E&S information into the proxy statement. Wasser confirms that the company will be publishing an integrated 10K report in 2020 and says the disclosure team will also look to enhance the E&S information that makes it into the proxy statement.
