Advocate, Environment Washington
Advocate, Environment Washington
Former Director, Destination: Zero Carbon, Environment America
THIS IS THE FIRST VOTE ON A RESOLUTION DIRECTLY ASKING A CORPORATION TO SET SCIENCE-BASED EMISSION REDUCTION TARGETS
SEATTLE— As Washingtonians experience the consequences of climate change — record heat waves, wildfires, droughts, and shrinking snowpacks—69.9% of the shareholders in Costco*, one of the largest retailers in the world based in Issaquah, voted yes on a shareholder proposal that calls on Costco to set “short, medium, and long-term science-based greenhouse gas emissions reduction targets” to achieve net-zero emissions by 2050. The proposal was filed by Green Century Capital Management°, Environment Washington’s affiliated environmentally responsible mutual fund company.
This significant vote in favor of the resolution comes in opposition to the Costco board of directors, which unanimously recommended that its shareholders vote against the Green Century proposal.
The proposal specifically requests that Costco include emissions not just from its direct operations and energy usage, but also indirect emissions caused by its suppliers, which are known as Scope 3 emissions. The proposal calls on Costco to incorporate emissions caused by deforestation in its supply chain, which is primarily driven by the production of palm oil, soy, beef, cocoa and pulp/paper.
The Intergovernmental Panel on Climate Change (IPCC) advises that we must limit our planet’s warming to 1.5°Celsius, which means we must cut greenhouse gas emissions in half by 2030 and reach net zero emissions by 2050. The Science Based Targets initiative (SBTi) provides a framework for companies to track and set carbon reduction goals in line with IPCC’s advisory.
Many of Costco’s competitors have already set science-based targets for reducing their greenhouse gas emissions. In contrast, Costco has not. A company’s Scope 3 emissions often represent the majority of their greenhouse gas emissions. Costco has acknowledged that their Scope 3 emissions make up the overwhelming bulk of their global warming pollution.
Experts from Environment Washington Research & Policy Center issued the following statements:
“Business as usual is not an option when the impacts of climate change are getting worse each year,” said Pam Clough, an advocate with Environment Washington Research & Policy Center. “Not only are extreme storms and unseasonal wildfires becoming more frequent, but America’s global warming emissions also increased in 2021. Costco’s members value bulk savings and the company needs to listen to its shareholders’ call for bulk emissions savings. As Costco creates their climate plan, it must include science-based emissions targets to have real value.”
“Forests remain one of the planet’s best opportunities to limit climate change: they both absorb the greenhouse gasses heating our planet, and store centuries of carbon in their trees and soil,” said Sammy Herdman, forests campaign associate with Environment America Research & Policy Center. “By selling products that are manufactured at the expense of forests, Costco is contributing to deforestation. We applaud Costco’s shareholders who voted for this proposal and echo their message: It’s time for Costco to count and cut their carbon emissions.”
Environment Washington Research & Policy Center, a project of Environment America Research and Policy Center, Inc. is not a registered investment adviser. Environment America Research & Policy Center, Inc. is not providing any investment advice to any recipient of this communication.
About Green Century Capital Management
°Green Century Capital Management, Inc. (Green Century) is the investment advisor to the Green Century Funds (The Funds). The Green Century Funds are the first family of fossil fuel free, responsible, and diversified mutual funds in the United States. Green Century Capital Management hosts an award-winning and in-house shareholder advocacy program and is the only mutual fund company in the U.S. wholly owned by environmental and public health nonprofit organizations.
*As of December 31, 2021, Costco Wholesale Corporation comprised 1.36%, 0.00% and 0.00% of the Green Century Balanced Fund, the Green Century Equity Fund and the Green Century International Index Fund. As of the same date, other securities mentioned were not held in the portfolios of any of the Green Century Funds. References to specific securities, which will change due to ongoing management of the Funds, should not be construed as a recommendation by the Funds, their administrator, or their distributor.
The percentage in favor was calculated by (i) dividing the number of votes in support of the proposal by (ii) the sum of the number of votes voted in support of and against the proposal. Abstentions and broker non-votes were not included in the calculation.
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