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Sustainable Investment Profiles

Standing Up, Not Standing Out

Judging from conventional sources, PerkinElmer is not an ESG standout. The company receives unremarkable rankings from trusted ESG research services like RobecoSAM, MSCI and JUST Capital. Its most recent CDP Climate and Water reports have both received a “D” rating. Additionally, environmental investigations and remediation are taking place at some of PerkinElmer’s current and former locations; the company acknowledges it has been named a potentially responsible party for certain waste disposal sites; and its disclosures show that conflict minerals are likely present in its supply chain, albeit in small quantities.

PerkinElmer has also not published a Corporate Social Responsibility (CSR) Report since its 2016-2017 reporting year. Our numerous messages left with the company’s investor relations department, ahead of its annual shareholder meeting, all went unreturned. This is unusual for a company of any size. At a market capitalization just over $10 billion, we believe PerkinElmer should be publishing annual CSRs–and picking up the phone when investors call. Even the company’s annual report is simply a copy of its required SEC 10-K filing, headed by a letter from new CEO Prahlad Singh.

So why, in spite of these shortcomings, are we still interested in PerkinElmer’s ESG qualities? The answer begins with its products.

PerkinElmer is a major global provider of maternal, fetal and newborn health solutions, through prenatal and newborn screening, cord blood storage, and autoimmune in-vitro diagnostics, among other offerings. The company’s Vanadis-branded non-invasive prenatal testing product is designed as an affordable, single screening solution positioned to “improve the level of prenatal care on a global level.” Other products deliver screening for rare genetic diseases and newly emerging autoimmune diseases. The company’s diagnostics business segment has applications in oncology and in the discovery of new drugs and gene therapies. And PerkinElmer has recently been granted emergency use authorization by the US Food and Drug Administration for both COVID-19 testing and COVID-19 antibody testing.

PerkinElmer’s other business segment, discovery and analytics, not only offers support for novel treatments of diseases; it also enables the detection, monitoring and management of contaminants impacting the environment and food supply. PerkinElmer products are used to detect the presence of lead or pesticides in water; in China, the company is working to address systemic mistrust of local food supplies by testing for mercury and mycotoxins in milk. PerkinElmer’s portable infrared analysis instruments have even been used by researchers seeking to better understand the presence of microplastics in oceans.

Upon closer examination, PerkinElmer’s “D” rating from CDP on both its climate and water disclosures appear to stem more from shortcomings in the reporting itself than the company’s actual performance in these areas. From 2015-2018, PerkinElmer’s greenhouse gas intensity per sales and water intensity per sales actually decreased by over 30% and 40%, respectively, according to Bloomberg data. The company also has policies to reduce emissions and promote energy efficiency, including green buildings.

PerkinElmer’s executive compensation also appears reasonable relative to other companies of its size and in its industry, and most shareholders seem to agree: last year its “say on pay” vote received 98% support from shareholders, according to Bloomberg data. And the company clearly has a culture of volunteerism, with its entire workforce pitching in on health, environmental and education projects for a “Global Impact Day.”

While some companies are rightly accused of “greenwashing,” PerkinElmer may be guilty of the opposite: obscuring its core social and environmental impact by underemphasizing investor relations, ESG reporting and disclosure. As a result, we do not see PerkinElmer standing out–but we do see the company standing up, with consistently impactful products that promote scientific solutions to shared global challenges, and help fulfill its mission “to innovate for a healthier world.”