DEERE & COMPANY | Report on the benefits of product repair at DEERE & COMPANY

Status
Omitted
AGM date
Previous AGM date
Resolution details
Company ticker
DE
Lead filer
Green Century Capital Management, Inc.
Resolution ask
Report on or disclose
ESG theme
  • Environment
ESG sub-theme
  • Waste and pollution
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Industrials
Company HQ country
United States
Resolved clause
Shareholders request that the Board of Directors issue a public report, within a reasonable time, assessing the benefits and drawbacks of opposing Right to Repair regulation, as well as the financial and reputational risks associated with such opposition.

At the company's discretion, the report should include:

An assessment of the impact of continued efforts to oppose Right to Repair efforts on the company's reputation and long-term value.
An assessment of how capital could be used to develop Innovative products and services to meet existing and emerging Right to Repair regulation.
Whereas clause
Deere & Company ("Deere") has received significant scrutiny for its opposition to "Right to Repair" legislation, which requires equipment manufacturers to provide access to diagnostic software, parts, instructions, and additional repair materials to ensure competition and timely repair.

According to recent polls, 84% of Americans support Right to Repair legislation.1 In April 2023, Colorado became the first state to pass Right to Repair legislation for farm equipment, and to date, 30 other states have introduced Right to Repair bills.

Other companies heavily reliant on intellectual property, notably Apple and Microsoft, have announced support for Right to Repair legislation in California and Washington, respectively. In contrast, Deere has continued to make statements against proposed Right to Repair legislation.2 Opposition to Right to Repair efforts presents reputational, litigation and transition risk. The vast majority of press on Deere's Right to Repair opposition has been sympathetic to the concerns of American farmers seeking to repair equipment. Furthermore, the company is now the subject of a class action lawsuit brought by farmers, and there is concern that in its rush to oppose Right to Repair, Deere may have made misleading statements in SEC filings. 3

Deere has cited EPA regulations and the Clean Air Act as reasons that it would not allow independent repair shops access to its diagnostic tools.4 In August 2023, the EPA issued a statement that it had no policy on restricting owners' repairs of emissions-related components of their products to properly function.5 This contradicts statements made by the company, which have falsely obscured the positive environmental impacts of repairing equipment.

Progress made by the company has not been sufficient to address risks. Deere recently created a Memorandum of Understanding with the American Farm Bureau Federation which, in exchange for the company allowing independent repairs, restricts its ability to advocate for enforceable legislation outside the Memorandum of Understanding. 6

Investors are concerned about the extent to which the company is investing in opposing Right to Repair instead of developing a growth strategy accounting for this evolving regulatory landscape. Deere should transparently examine and disdose the impact these efforts are having on the firm's reputation and long-term value.

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