During the third quarter, Storebrand has taken a new step in escalating its engagement with the Dollar General Corporation on its responsibilities regarding the health and safety of its workers.
Headquartered in Tennessee in the U.S.A, Dollar General, one of the largest retailers in the world, is listed on the New York Stock Exchange and is a member of the S&P 500. As of the 2022, it had approximately 158,000 employees and operated around 19,000 discount general merchandise stores across the USA and Mexico.
A “severe violator”
The company has been engaging in a pattern of behaviour that raises investor concern regarding risks to its brand reputation as well as potential liabilities from failing to comply with regulations. There appear to be wilful and repeated health and safety violations that have been reported at Dollar General locations across the country. These issues of safety and regulatory compliance, which have also been reported in the media, can be interpreted as being endemic to the company's business model that is heavily dependent on keeping labour costs low.
Dollar General was declared by Occupational Safety and Health Administration (OSHA), the U.S. federal health and safety regulatory body, as a “Severe Violator” of workplace safety standards, as it had accumulated over $21 million in OSHA fines since 2017.
Investor response
Investors have reacted strongly to these risks. In May, at the Dollar General Annual Meeting, Storebrand was among the 67.7% of investors that voted in favour of a shareholder proposal that requested for an independent third-party audit to be conducted focusing on the impact of the company’s policies and practices on the safety and well-being of workers. Since that time, the company does not appear to have followed up with any action on the issue and has not communicated on it to the public or the parties that tabled the proposal. Requests by the proponents to engage with the company's management and board on the issue have been denied.
As a result, Storebrand has given its support to a shareholder initiative, led by Domini Impact Investments, to send a formal investor letter to Dollar General's board and management regarding the issue. The letter was signed by 33 investors and sent to the company in October 2023.
So far, Dollar General has responded to with public statements declaring its intention to conduct an audit before its 2024 annual shareholder meeting.
Storebrand's action in this issue shows our commitment to these issues, as well as how we engage collectively with other shareholders to continue to escalate engagement when companies are not responsive to initial methods of engagement.