UPS shareholders vote down proposal strengthening emissions reduction
May 20, 2022
The vast majority of UPS shareholders voted against a proposal to adopt greenhouse gas emissions reduction targets, indicating one of the nation’s largest truck fleets is not quite ready for electric trucks.
During its annual meeting of shareowners, UPS shareholders voted against a request to adopt independently verified science-based greenhouse gas emissions reduction targets. The proposal was submitted by Green Century Capital Management.
Green Century points out that FedEx and Amazon have set goals for acquiring electric vehicles. Meanwhile, UPS’ goals for its ground fleet rely on alternative fuel.
Green Century said the carrier’s current strategy unnecessarily prolongs potential emissions and reinforces the fossil fuel infrastructure.
According to the proposal, UPS’ current emissions reduction goals do not include Scope 3 emissions. The U.S. Environmental Protection Agency defines Scope 3 emissions as those that “are the result of activities from assets not owned or controlled by the reporting organization, but that the organization indirectly impacts in its value chain.”
Scope 3 emissions account for more than half of UPS’ total emissions based on metric tons, according to UPS’ 2020 Taskforce on Climate-Related Financial Disclosures report.
“Shareholders request that UPS adopt independently verified short, medium, and long-term science-based greenhouse gas emissions reduction targets, inclusive of emissions from its full value chain, in order to achieve net-zero emissions by 2050 or sooner and to attain appropriate emissions reductions prior to 2030, in line with the Paris Agreement’s goal of maintaining global temperature rise at 1.5 degrees Celsius,” the proposal states.
Nearly three-quarters of shareholder votes oppose the proposal according to the company’s latest Securities and Exchange Commission Form 8-K filing. Just weeks prior to the vote, Environment America, a non-profit environmental advocacy organization, sent nearly 9,000 petitions urging UPS to electrify its delivery trucks to reduce global warming pollution.
Green Century is the first family of fossil fuel free, diversified and responsible mutual funds, allowing investors to match their support of a transition to clean energy and sustainable businesses with their investment choices, according to the company’s website.
UPS opposes emissions reduction proposal
UPS’ board of directors recommended voting against the proposal.
Explaining its recommendation, UPS claims its Environmental, Social and Governance goals include a plan to become carbon neutral by 2050. That includes the electrification of its delivery fleet.
However, UPS states that electrifying its heavy-duty vehicle fleet by 2030 or 2035 is not feasible.
“UPS takes seriously the need to transform our delivery fleet and has already made significant strides to this end,” the company states in its response to the proposal. “In developing our strategy, we evaluated the adoption of science-based targets. We determined that there are no scalable solutions for aircraft or heavy-duty vehicles at this time to achieve a science-based target by 2030 or 2035.”
Currently, UPS has a fleet of more than 13,300 alternative fuel and advanced technology vehicles. That includes all-electric, hybrid electric, hydraulic hybrid, ethanol, compressed natural gas, liquefied natural gas and propane vehicles. In 2017, UPS placed an order for 125 Tesla all-electric semi-trucks. However, Tesla has since delayed production of the electric truck prototype. LL