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Corporate Engagement, Sustainable Investment Profiles

Signposting an ESG Story

When we called Brady Corporation in September to ask the company to restart publication of an annual sustainability report, we didn’t know what to expect. Brady had last published a sustainability report in 2011, and while the company’s website made reference to sustainability, the information we were able to find was fairly limited. But what we encountered on that first call was an investor relations department that was eager to engage with us, and a company with an ESG story it seemed to have simply neglected to tell.

Founded in Eau Claire, Wisconsin in 1914 by William H. Brady as a maker of painted signs and promotional displays sold to offices and realtors, the Brady Corporation of today is focused on workplace identification, safety, productivity and performance. The company reported fiscal 2020 sales just over $1 billion, and has locations in 30 countries and more than 5,000 employees worldwide.

As we learned on our first call, following a string of acquisitions in the 2000s and early 2010s, the company began to consolidate its physical locations. Older factories and facilities were shut down, with workers and operations moving into newer, more efficient buildings, many of them with onsite solar generation and some with other sustainable features such as geothermal energy or zero landfill waste. In Tijuana, Mexico alone, three factories are consolidating into one. But because Brady is not currently tracking emissions from its operations, the company is unable to show how these efficiencies translate into what should be major reductions in the climate impact of its operations.

Brady’s reporting of its inclusion and diversity efforts is a bit further along; the company states that 46% of its global workforce are women, that women make up 37% of its global management roles against an industry benchmark of 22%, and that its board features 33% women, who chair 2 of its 5 committees. The company also describes how it is “innovating for a better world” during the COVID-19 pandemic, through solutions including the ubiquitous social distancing floor tape, labels that preserve the integrity of COVID-19 lab tests, and patented drinking fountain safety covers.

But where the company comes closest to the level of disclosure typically found in a sustainability report is in its charitable efforts. The company supports two foundations, the first of which was started in 1954. Today, the Brady Foundation supports non-profit organizations, in communities where the company has a presence, with approximately $500,000 in grants each year and additional funding for organizations addressing issues of racial equity. At the same time, the Brady Education Foundation “seeks to close the education opportunity gaps associated with race, ethnicity and family income.” The company also offers employees a gift matching program that matches their contributions to non-profit causes, dollar for dollar.

Since opening our dialogue with Brady Corporation, our respect for the company’s environmental and social ambitions has quickly grown. Now, with additional direction on how best to track impact and report on it in a transparent, comprehensive way, we hope Brady will be able to tell its full ESG story, so that shareholders like us can understand the complete return on our investment.