Caterpillar Inc. | Lobbying Expenditures Disclosure at Caterpillar Inc.

Status
44.63% votes in favour
AGM date
Previous AGM date
Proposal number
5
Resolution details
Company ticker
CAT
Lead filer
CorpGov.net
Resolution ask
Report on or disclose
ESG theme
  • Governance
ESG sub-theme
  • Lobbying / political engagement
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Industrials
Company HQ country
United States
Resolved clause
Stockholders request the preparation of a report, updated annually, disclosing: • Company policy and procedures governing lobbying, both direct and indirect, and grassroots lobbying communications. • Payments by Caterpillar used for (a) direct or indirect lobbying or (b) grassroots lobbying communications, in each case, including the amount of the payment and the recipient. • Caterpillar’s membership in and payments to any tax-exempt organization that writes and endorses model legislation. • Description of management’s and the Board’s decision-making process and oversight for making payments described in sections 2 and 3 above. For purposes of this proposal, a grassroots lobbying communication is a communication directed to the general public that (a) refers to specific legislation or regulation, (b) reflects a view on the legislation or regulation, and (c) encourages the recipient of the communication to take action with respect to the legislation or regulation. Indirect lobbying is lobbying engaged in by a trade association or other organization of which Caterpillar is a member. Both direct and indirect lobbying and grassroots lobbying communications include local, state, and federal efforts. The report shall be presented to the Public Policy and Governance Committee and posted on Caterpillar’s website.
Whereas clause
Full disclosure of Caterpillar’s direct and indirect lobbying activities and expenditures to assess whether Caterpillar’s lobbying is consistent with its expressed goals and in stockholders’ best interests:
Supporting statement
Caterpillar spent $42,850,000 from 2010 – 2020 on federal lobbying. This does not include state lobbying, where Caterpillar also lobbies, but disclosure is uneven or absent. For example, Caterpillar’s lobbying against rightto-repair laws in states like New York has drawn attention.1 Caterpillar also lobbies abroad, spending between €100,000–199,000 on lobbying in Europe for 2020. Companies can give unlimited amounts to third-party groups that spend millions on lobbying and undisclosed grassroots activity. These groups may be spending at least double what’s publicly reported.2 Caterpillar fails to disclose any of its payments to trade associations and social welfare organizations, nor amounts used for lobbying, including grassroots. Caterpillar belongs to the Business Roundtable, National Association of Manufacturers, and Chamber Commerce, which together spent $108,148,000 on 2020 lobbying and drew attention for a massive lobbying blitz against raising corporate taxes to pay for infrastructure.3 Caterpillar does not disclose its contributions in tax-exempt organizations that write and endorse model legislation, such as the American Legislative Exchange Council (ALEC). Caterpillar’s lack of disclosure presents reputational risks when its lobbying contradicts company public positions. For example, Caterpillar supports diversity and inclusion, yet groups have asked companies to leave ALEC because of its voter restriction efforts.4 Caterpillar supports mitigating climate change, yet the Chamber and Business Roundtable lobby to block climate action.5 Caterpillar supports government investments to modernize infrastructure, yet its trade associations lobbied against raising corporate taxes to pay for it.

How other organisations have declared their voting intentions

Organisation name Declared voting intentions Rationale
Sandbar Asset Management LLP For
LocalTapiola Asset Management Ltd For A vote FOR this proposal is warranted, as additional disclosure of the company's direct and indirect lobbying and board oversight would help shareholders better assess the risks and benefits associated with the company's participation in the public policy process.

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