by NEI ESG Services Team.
Ambitious targets for climate and DEI.
Editor’s note: This article first appeared in our Active Ownership Report from Q1, 2022
Open Text has made bold commitments to reduce carbon emissions and improve diversity, equity, and inclusion at the company. We are happy to see these aggressive objectives, though Open Text was also one of the companies where we had concerns over what we deem to be excessive compensation for the CEO.
We met with leaders at the SVP and VP levels twice in the quarter as part of our solo engagement with the Waterloo-based information management company. At our first meeting we shared our rationale for voting against their say-on-pay package, as well as compensation committee members. The company has noted that the board engages a third-party group to inform their compensation decisions. They were open to hearing our perspective and agreed to share our ideas with others in the company.
At our second meeting we discussed progress on climate strategy and DEI. Open Text introduced a set of commitments in late 2021 under the banner of “The OpenText Zero Initiative,” which includes zero barriers, zero waste, and zero emissions. Under zero barriers, the company intends to achieve a 50/50 male/female gender balance in “key roles” by 2030, and to have 40% of leadership roles filled by women. Under zero emissions, they are committed to a science-based target of 50% emissions reduction by 2030, and to be net zero by 2040.
We expressed our support for the initiative and sought to understand how the targets were set and we expressed that we are looking to better understand the company’s implementation plan within its upcoming disclosure. Attendees highlighted a strong culture of support for sustainability-related initiatives that starts with the CEO, who has a strong voice on these matters.
Next Steps: We intend to follow up on release of the company’s next sustainability report to review their plans for implementation of their climate strategy and DEI initiatives. Depending on how we vote at this year’s annual meeting, we may also continue our discussion around executive compensation.
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