UNITED PARCEL SERVICE, INC. | Report on Balancing Climate Measures and Financial Returns at UPS

Status
Withdrawn
AGM date
Previous AGM date
Resolution details
Company ticker
UPS
Lead filer
The Shareholder Commons
Resolution ask
Report on or disclose
ESG theme
  • Environment
ESG sub-theme
  • Net Zero / Paris aligned
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Industrials
Company HQ country
United States
Resolved clause
Shareholders ask the board to commission and publish a report on the extent (if any) to
which Company decisions involving greenhouse-gas emissions reduction prioritize Company financial performance over the environmental costs and risks of climate change and the manner in which any consequent environmental costs and risks threaten returns of diversified shareholders who rely on a stable and productive economy.
Supporting statement
In 2020, the Company announced a roadmap to carbon neutrality in 2050. The Company has established the following specific goals:

• By 2025
25 percent renewable electricity for facilities
40 percent alternative fuel purchases as a percent of total ground fuel
• By 2035
30 percent sustainable aviation fuel
100 percent renewable electricity for facilities
50 percent reduction in carbon dioxide per package delivered for global small packages.

These goals do not appear consistent with the consensus on measures necessary to keep global warming below disastrous levels. More consistent measures could include:

• Meeting a 1.5-degree Celsius Science-Based Target standard
• Achieving a 50 percent reduction in greenhouse-gas emissions by 2030
• Committing to purchasing only electric light-duty vehicles by 2025

The gap between the Company’s declared goals and “Paris alignment” may be due to the Company’s decision only to address the risk of climate change to the enterprise, rather than addressing the risks the Company poses to the environment: while the Company identifies climate change as having “inherently high risk to the organization,” the public documents that discuss the Company’s climate stance disclose
no consideration of climate change’s broad environmental stakes such as:

• Halving GDP growth by the end of the century
• Having “broad implications for macroeconomic performance, including inflation, interest rates, balance of payments, productivity, wealth, and gross domestic product (GDP) growth”
• Shrinking the world economy by 3 percent by 2050.

Lowered GDP will directly reduce returns to diversified investors,6 and a warming planet may create serious disruption costs that further threaten financial markets. By adopting a slower pace of mitigation, the Company is able to increase its margins and financial performance. But improved Company financial performance that comes at the expense of the environment and the economy is a bad trade for most Company shareholders, who are diversified and rely on broad economic growth to achieve their financial objectives.

This proposal asks for a report that analyzes the climate trade-offs the Company makes between financial return and the global economy, and how those trade-offs affect diversified shareholders. Such a report would not require precision: identifying areas where the Company is choosing not to accelerate decarbonization and analyzing how such choices manifest as costs or risks to diversified portfolios would help determine whether and when the Company should prioritize Paris alignment over financial returns.

How other organisations have declared their voting intentions

Organisation name Declared voting intentions Rationale
LocalTapiola Asset Management Ltd For A vote FOR this resolution is warranted, as additional report on emissions reductions targets and goals and assessment of the company's management of climate-related risks and opportunities would allow shareholders to better understand how the company is managing systemic risks posed by climate change and related risks.
Anima Sgr Against

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