Yahoo Finance Dollarama says growth plan 'incompatible' with long-term climate goals
Chain says "persistent inflationary pressure" pushed comparable store sales 17.1% higher year-over-year
Dollarama (DOL.TO) shareholders on Wednesday voted against a plan to adopt tougher climate targets, after executives said long-term emission targets clash with the discount chain's growth plan.
The proposal backed by the non-profit Shareholder Association for Research and Education (SHARE) group aimed to bring Dollarama's efforts to address climate change closer in line with retailers like Loblaw (L.TO), Empire (EMP-A.TO), Walmart (WMT), and Costco (COST).
The votes were cast at Montreal-based Dollarama's virtually-held annual shareholder meeting on Wednesday morning, after the company reported first-quarter financial results. Dollarama says "persistent inflationary pressure" pushed comparable store sales 17.1 per cent higher year-over-year, as shoppers sought more affordable goods at its stores.
Dollarama aims to grow its store count from 1,486 stores open as at the end of January to about 2,000 locations by 2031, according to regulatory filings. On Wednesday, chief executive officer Neil Rossy advised shareholders to vote against SHARE's proposal, which calls on the company to strengthen its climate action plan with long-term greenhouse gas emission targets.
"The long-term absolute GHG emissions reduction targets aligned with the 1.5 degree Paris goal, as requested by the proposal, are incompatible with Dollarama's significant growth plan," he said at the virtual meeting. "Any attempt to establish and disclose such targets would require numerous assumptions over a long period of time about future events... which would be subject to several risks and uncertainties."
Building upon the company's current climate plan, Rossy says Dollarama is "committed to adopting more challenging next-generation goals as it gains knowledge and experience through its ongoing emissions reduction efforts."
SHARE's proposal calls for Dollarama to match targets set by Loblaw and Empire to achieve net-zero Scope 1 and 2 emissions by 2040, and net-zero Scope 3 emissions by 2050. Dollarama has pledged to cut its Scope 1 and 2 emissions intensity by 25 per cent by 2030.
"The Company has no 2050 target or time-bound commitment to disclose and reduce Scope 3 emissions, which likely constitute the majority of total company emissions," SHARE stated in regulatory filings, noting Virginia-based Dollar Tree (DLTR) recently reported 83 per cent of its emissions are of this type.
SHARE says Loblaw, Empire, Walmart, Costco and Kroger (KR) have each set Scope 3 emissions reduction targets.
"We think Dollarama's board and management are very capable of meeting this challenge," Kyela de Weerdt, SHARE's manager of corporate engagement and advocacy, said at Wednesday's meeting. "Dollarama's current targets, disclosure and climate strategy roadmap do not provide necessary trust assurance to investors."
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.
Download the Yahoo Finance app, available for Apple and Android.
