Resolved clauseShareholders request Home Depot issue a climate transition plan, above and beyond existing disclosure, reporting on core elements associated with its science-based emissions reduction targets. The plan should be published at reasonable expense, exclude confidential information, and describe progress and any plan updates on a regular basis.
Whereas clauseWheras: Climate change poses systemic financial risk, potentially reducing global GDP by up to19% by midcentury.
The Home Depot (“HD” or “the Company”) aims to mitigate its climate impact by setting a science-based greenhouse gas (GHG) emissions reduction target, validated by the Science Based Targets initiative, to cut its scope 1 -3 emissions by 42% by 2030. Its scope 3 target focuses solely on emissions associated with customer use of sold products.
Achieving its ambitious goal requires comprehensive planning that anticipates shifting external factors such as changes in appliance efficiency standards, consumer preferences, and the pace of greening the grid. While HD’s 2024 ESG report provides examples of its goals, it does not adequately explain how the Company will achieve them.
HD should consider an approach many companies are adopting - developing and publishing a climate transition plan (“transition plan”) – to demonstrate its climate goals are backed by a credible implementation roadmap. In 2023, 5,906 companies disclosed through CDP having a science-based transition plan, and 8,600 disclosed the intention to develop one within two years.
By responding to the core elements of a transition plan, such as found in Transition Plan Taskforce guidance, HD could improve transparency by disclosing its assumptions, uncertainties, dependencies, regulatory and policy engagement, and indirect lobbying activities to better inform investors of its advocacy and risks that may impede reaching its climate goals. While HD evaluates scenarios informing its emissions reduction pathway, it could better communicate factors potentially changing its scenarios.
For example, HD indicates in its CDP Climate Change 2023 report that it faces risk because “Regulations addressing product efficiency and labeling have increased the cost of certain products” ranging “from 0 -20%.” It also notes that low-GHG emission products present “significant business opportunities.” Because HD relies heavily on sales of energy efficient products to reach its scope 3 target, investors would benefit by understanding its assumptions, dependencies, and mitigation strategies should regulations and/or lackluster customer demand thwart success.
Supporting statementIn developing and implementing the plan, we recommend, at management’s discretion: Core elements can include, but are not limited to, assumptions, uncertainties, dependencies, regulatory and policy engagement, and indirect lobbying activities associated with achieving HD’s targets.; Providing forward-looking, near-term, and qualitative and quantitative strategies, metrics, and milestones for achieving HD's targets.; Considering guidance by advisory groups such as the Transition Plan Taskforce, Task Force for Climate Related Financial Disclosures, CDP, and Climate Action 100+.