Why is ESG important to the Board?

Levenick:  ESG is the right thing to create long-term value for our shareholders, and it serves as a way to reduce risks over time. The Board understands that proper management of ESG factors leads to better returns, especially when coupled with our strong corporate purpose and culture.

We also believe that ESG leads to a more engaged workforce and results in lower voluntary turnover.

What is the Board looking for to help it oversee ESG initiatives?

Levenick:  We look to management for formal, reported measures that indicate we are driving results. We also want to know that our results are repeatable and auditable.

Among Grainger’s many firsts, it was the first maintenance, repair and operations (MRO) distributor to report with the Global Reporting Initiative’s Sustainability Accounting Standards in mind. This reporting helps Grainger measure and benchmark its program. In addition, it provides a common language for Grainger to discuss program effectiveness with stakeholders.

You have been very public in meeting with Grainger’s investors. How do they see us?

Levenick:  They see Grainger as a leader. For example, Grainger was the first MRO distributor to perform a materiality assessment, which looks at the significance of ESG-related issues both to Grainger and key stakeholders, such as customers.

Many of our investors find this useful and have encouraged us to continue to provide insight into customer partnerships, particularly where we help them conserve resources like energy and water.

What have you learned from these meetings?

Levenick:  We have seen that many investors are taking ESG very seriously. Since investors are at different levels of sophistication on ESG matters, it was helpful for us to understand where to focus our energy and resources.

How would you compare Grainger’s ESG efforts to other companies?

Levenick:  As with many of the company’s corporate initiatives, Grainger’s ESG efforts are industry leading. The company has earned numerous accomplishments as of late, including 2019 recognition by Barron’s as the eighth most sustainable company in the U.S., and a company least-susceptible to climate change.

While Grainger compares positively to its peers, success will require ongoing effort. I am certain that Grainger will continue to evolve in ESG and be a leader in improving its operations, as well as supporting customers on their sustainability journeys.