Google Inc. (Alphabet Inc.) | Stockholder Proposal Regarding a Report on Physical Risks of Climate Change

Status
17.80% votes in favour
AGM date
Resolution details
Company ticker
GOOGL
Lead filer
-
Resolution ask
Conduct due diligence, audit or risk/impact assessment
ESG theme
  • Environment
ESG sub-theme
  • Climate change
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Technology
Company HQ country
United States
Resolved clause
Shareowners request that Alphabet (“the Company”) publish a regular periodic assessment of resilience to the physical risks of climate change, including description of short-, medium-, and long-term measures that the Company is taking to mitigate physical risks, including threats to its headquarters and other key assets from sea level rise and flooding. The report should be completed at reasonable cost and omit proprietary information.
Supporting statement
S&P Global states that nearly 60% of companies in the S&P 500 “hold assets at high risk of physical climate change impacts.” Even where companies do not have vulnerable assets, they may be exposed to physical risks through impacts of climate hazards on critical infrastructure and key parts of their value chain, both upstream and downstream.



Alphabet has characterized physical risks to its headquarters and data centers:



We found our biggest risk to be flooding at our Bay Area headquarters. In 2020, we conducted an updated global assessment of near-term (2030) and mid-term (2050) climate risks [which] found exposure to flooding and extreme heat across the portfolio to be our biggest risks. Our 2017 assessment suggested that these trends are likely to increase and continue through the end of the century.



Despite these disclosures of identified risks, the Company offers little disclosure regarding its adaptive planning for these short-, medium-, and long-term risks. It is prudent for investors to know whether the company is taking reasonable mitigation measures or contingency plans for these risks, such as efforts to protect or relocate its Bay Area headquarters, and to mitigate the risks to data centers.



The implementation guide for the Task Force on Climate-related Financial Disclosures (TCFD) Climate recommends that reporting companies utilize Sustainability Accounting Standards Board (SASB) and Disclosure Standards Board (CDSB), which are “well-established in the market with rigorously developed TCFD-aligned reporting tools,” as guidance to help shape reporting on mitigation strategies for physical climate risks. The implementation guide illustrates how a company should go beyond identifying physical risks, to also report on measures being taken to protect the company’s business from those risks.



A recent scientific article in Nature Climate Change noted that the financial value at risk from climate change averaged $2.5 trillion, but tail risk could exceed $24 trillion. Losses at this scale could involve a substantial impairment in fundamental value.



Alphabet and its investors will benefit from disclosure of a resilience strategy to address mitigation of physical risks.

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