Levi Strauss & Co. | Sustainability ROI Report by Audit Committee at Levi Strauss & Co.

Status
Filed
AGM date
Previous AGM date
Proposal number
4
Resolution details
Company ticker
LEVI:US
Lead filer
National Center for Public Policy
Resolution ask
Conduct due diligence, audit or risk/impact assessment
ESG theme
  • Environment
ESG sub-theme
  • Climate change
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Consumer Discretionary
Company HQ country
United States
Resolved clause
The shareholders hereby amend the Bylaws of the Corporation to incorporate the following provision, inserted wherever the Board deems appropriate to maintain internal consistency of numbering and structure: "The corporation shall have an Audit Committee. The Audit Committee's oversight shall include the corporation's sustainability initiatives. The process by which the Audit Committee shall exercise its oversight of the corporation's sustainability initiatives shall at a minimum include assessing annually the extent to which the corporation's sustainability initiatives have been authorized and maintained on the basis of expected value and return-on investment calculations. The Audit Committee shall at least annually report to the shareholders on its findings related to the authorization and maintenance of the corporation's sustainability initiatives."
Supporting statement
Levi's has made numerous sustainability commitments, but shareholders are entitled to greater transparency on how those ambitions translate into a positive ROI. Absent such transparency, it is difficult to assess whether sustainability investments are value-accretive or destroying.° For example: 1. Absence of a published EV/NPV decision framework. In Levi's Climate Transition Plan, the Company states that it aims to incorporate relevant criteria "into purchase expenditure requests" and to "break out climate expenses" over time.l~1 But the Plan apparently does not present an existing, auditable process with explicit discount rates, scenario weighting, or threshold return criteria. This leaves shareholders unable to assess whether sustainability projects are held to the same economic rigor as other capital investments. 2. Emphasis on impact metrics rather than financial returns. Levi's Sustainability Goals & Metrics and related disclosures place strong focus on targets like greenhouse gas reductions, renewable energy usage, water usage, and supplier compliance(3) These are impact indicators, not financial performance measures. The absence of per-project payback, internal rate of return (IRR), or reconciliation of expected versus realized cash flows makes it impossible for shareholders to judge whether achieving environmental or social goals comes at the expense of shareholder value. 3. Unquantified supplier cost impacts and opportunity costs. Levi's Supplier Code of Conduct imposes rigorous environmental, labor, and social requirements on suppliers and frames compliance as integral to sourcing strategy(4) Such constraints shrink the eligible supplier pool, likely raising procurement costs and reducing sourcing flexibility. Yet Levi's does not publicly quantify these incremental costs or compare them against the benefits of supplier compliance. In all these areas and more, capital devoted to sustainability initiatives does not appear to be transparently compared to alternative uses of capital (such as store expansion, product development, or share buybacks). By disclosing these gaps, the requested report would strengthen investor confidence that Levi's sustainability program is not prioritizing ideology over return in breach of management's duty to shareholders and would provide shareholders information necessary to value their shares. Shareholders concerned about ROI should vote FOR this proposal. (1) As of Nov.11, 2025, Levi's has apparently underperformed Ralph Lauren by roughly 23 percentage points the past twelve months and underperformed the S&P 500 by roughly thirty percentage points the past three years. (2) https://www.levistrauss.com/wp-content/uploads/2024/10/Climate-Transition-Plan.pdf (3) Id.; https://www.levistrauss.com/wp-content/uploads/2023/09/2022-SASB-INDEX.pdf (4) https://www.levistrauss.com/wp-content/uploads/2022/09/LSCo_Code-of-Conductpdf

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