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Report on Business Couche-Tard investors press for more disclosure related to environmental and social issues

A group of long-term investors in Alimentation Couche-Tard Inc. is pressing the Canadian convenience-store chain to improve its disclosure related to environmental and social issues ahead of its annual meeting next month, saying shareholders need a better sense of how the company is thinking about key challenges to its business.

Bâtirente, which manages retiree pensions for Quebec’s powerful CSN union, and PGGM, a major Netherlands-based pension fund, are spearheading an effort asking for more transparency from the company in communicating its approach to threats and opportunities related to environmental and social matters. The shareholders will present a resolution at Couche-Tard’s Sept. 20 annual meeting calling on the company to conduct an “accountability exercise” on the issues within one year, which means publishing something as simple as a sustainability report.

The request highlights the growing pains being experienced by Couche-Tard, which has ballooned from a small corner-store chain to become Canada’s biggest company by revenue. The company continues to shun many of the typical trappings of a business its size, such as a formal headquarters. After more than three decades as a public company, it only organized its first investor day this past January. Now shareholders are demanding more accountability, saying they are not receiving enough information to make informed investing decisions.

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“We want to see the company grow,” said Jean-Philippe Renaut, chief executive of AEquo Shareholder Engagement Service Inc., which is working with the investors. “[We’re concerned that Couche-Tard] is evolving within a changing technological, economic, social environment. And that environment is increasingly demanding when it comes to corporate responsibility.”

The shareholders say the company is exposed to a variety of threats to its business related to social and environmental issues, such as the move, at least in some countries, away from a dependence on oil and toward the electrification of transport. The company’s executives have addressed this issue in the past, noting it is using its refuelling stations in Norway as a laboratory of sorts to see how that transition plays out. But the investors want more disclosure on the company’s approaches to these types of challenges.

Couche-Tard management opposes the resolution, which will most certainly be defeated if the company's four founders vote against it. Chairman Alain Bouchard and three friends control the company through a class of multiple voting shares despite owning less than a quarter of the equity.

In its management circular sent to shareholders during the summer, Couche-Tard's top leadership says the company is "very serious" about its approach to environmental, social and governance matters and already makes available a significant level of information about that approach on its website and in its annual report. An attempt to access more information about these issues under a heading described as "corporate social responsibility" on the Couche-Tard corporate website Wednesday, however, yielded an error message that the page could not be found.

“We’re looking to have a constructive dialogue with Couche-Tard on these issues,” Mr. Renaut said, adding the company is behind its rivals on disclosure. He declined to comment on management’s rejection of the proposal. Marie-Noëlle Cano, a company spokeswoman, did not respond to questions sent by e-mail Wednesday.

A 2017 KPMG survey of some 4,900 companies operating around the world found that fully three-quarters of them now publish a sustainability report. In Canada, 84 of the biggest 100 firms publish such reports, according to the survey results cited by AEquo in its proposal.

Earlier this year, AEquo helped two Quebec religious orders convince TransCanada Corp. to provide a regular analysis of how its long-term prospects would be affected by a transition to a low-carbon economy. The Alberta energy company has been front and centre in North America’s contentious climate-change debates, with its proposed Keystone XL project and abandoned Energy East oil sands pipeline.

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Couche-Tard shares gained 0.7 per cent in Toronto trading Wednesday, closing at $62.55.

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