This release was originally shared by As You Sow.
BERKELEY, CA—JUNE 8, 2022—Today at Caterpillar’s annual general meeting, 96% of investors (based on the company’s preliminary tally) supported a shareholder resolution filed by As You Sow, Amalgamated Bank, Canada Post, and SHARE.
The resolution asks management to release a report disclosing interim and long-term greenhouse gas targets aligned with the Paris Agreement’s goal of maintaining global temperature rise at 1.5°C, and progress made in achieving them. Targets should cover Scope 3 emissions from customer use of products that combust fuels for operation, which account for a vast majority of value-chain emissions.
“Today’s majority vote is a loud and clear call from Caterpillar’s ownership that the company must address its significant climate impact and step into a leadership position in decarbonizing the industrials sector,” said Ivan Frishberg, chief sustainability officer at Amalgamated Bank.
Caterpillar is a leading manufacturer of construction and mining equipment, engines, turbines, and locomotives. Currently, the company has failed to set 1.5°C science-aligned targets and has no targets covering its emissions from customers’ use of its products. The Climate Action 100+, a coalition of 700 investors with $68 trillion in assets, lists Caterpillar as a focus company and one of the largest carbon emitters globally.
“As demonstrated today, shareholders are speaking up for climate action, and Caterpillar’s response to this vote will dictate their ability to remain competitive in a low-carbon economy,” said Karen Lockridge, director of ESG investing at Canada Post Corporation Pension Plan.
“Caterpillar’s continued inaction to align its climate targets to the CA100+ Benchmark exposes the company and investors to risk as the global economy transitions rapidly toward net-zero emissions. Investors want to see appropriate targets immediately,” said Anthony Schein, director of SHARE.
Today’s vote is the result of a multi-year engagement effort to align Caterpillar’s climate strategy with investor net-zero interests. In 2021 As You Sow filed a similar resolution in support of net-zero target setting, which received a 48% vote. Despite this significant show of investor support for action, the company did not make progress in setting adequate targets over the past year to address this request. Its current targets fail to incorporate its Scope 3 emissions, and absolute target reductions of 30% of Scope 1 and 2 emissions by 2030, far below the 50% deemed necessary to be in alignment with the Paris Agreement’s goal of 1.5°C.
Caterpillar is falling behind peer industrial manufacturers that are adopting ambitious target-setting and more transparent disclosures. Deere & Company set targets to reduce Scope 1 and 2 emissions by 50% and Scope 3 emissions by 30% by 2030 and is in the process of validating its targets to be 1.5°C-aligned through the Science Based Targets initiative. GE set a net-zero-by-2050 target that explicitly covers the emissions produced from the use of the products it sells such as jet engines and natural gas turbines.
“Investors are starting to lose confidence in management’s ability to control climate risk as the company continues to ignore shareholders’ expectation that the company will quickly set science-aligned targets to avoid the worst effects of climate change and develop a transition strategy,” said Daniel Stewart, energy program manager at As You Sow.