Tailored Brands (formerly Men’s Wearhouse) – Economic Inequality (2016)
Outcome: Successfully withdrawn following a commitment from the company to conduct an environmental and social materiality assessment and issue annual sustainability reports. The reports, which will focus on the TLRD’s material environmental and social issues, will begin in 2017.
Whereas: The disparity between income, wealth, opportunity and other economic measures in the United States has become extreme, leading many to conclude that it is creating both social and economic problems.
A 2014 OECD study concluded that “income inequality has a negative and statistically significant impact on subsequent (economic) growth. … [and] that policies to reduce income inequalities should not only be pursued to improve social outcomes but also to sustain long-term growth.”
Similarly, a Standard & Poor’s research brief argued that “increasing income inequality is dampening U.S. economic growth.”
Peter Georgescu, chairman emeritus of Young & Rubicam, wrote in a 2015 New York Times op-ed Capitalists, Arise: We Need to Deal With Income Inequality “Business has the most to gain from a healthy America, and the most to lose by social unrest”.
A December 2015 Pew Report found that the middle class is no longer the majority in America.
A November 2015 Morgan Stanley report, Mind The Inequality Gap, suggests there may be financial risks for retailers because economic inequality can stunt consumer demand.
Many companies have begun taking common sense and financially sound steps to help address this significant social policy issue confronting the United States:
• In 2014, Costco CEO Craig Jelinek wrote a public letter to Congress urging it to increase the federal minimum wage. “We know it’s a lot more profitable in the long term to minimize employee turnover and maximize employee productivity, commitment and loyalty,”
• Microsoft and Facebook now require their contractors to provide paid leave.
• Aetna’s CEO has publicly stated that paying less than $16 per hour is not fair and Morgan Stanley CEO James Gorman has called for the minimum wage to be raised in the U.S.
• Subway CEO DeLuca supports minimum wage indexing because it allows for business planning.
• Through the 100,000 Opportunities Initiative Starbucks, Target and Nordstrom have committed to training and hiring 100,000 Americans between the ages of 16 and 24 who are out of school and not working by 2018.
• Some companies like Whole Foods, the NorthWestern Corporation and Noble Energy are disclosing the difference between their top executives’ pay and their workers’ even before the SEC issued a rule requiring that the information be made public.
• Gap, J. Crew, Abercrombie & Fitch, Pier 1 and Victoria’s Secret have promised to end on-call scheduling.
Resolved: Shareholders request senior management issue a public report for shareholders’ and the board’s consideration by November 2016, at reasonable cost and excluding confidential information, describing what additional steps the Men’s Wearhouse and/or its leadership can take concerning economic inequality and a timeline for implementing those measures.