UNITED PARCEL SERVICE, INC. | Assess impact of climate strategy and alignment with Just Transition guidelines at UNITED PARCEL SERVICE, INC.

Status
24.02% votes in favour
AGM date
Previous AGM date
Proposal number
8
Resolution details
Company ticker
UPS
Lead filer
The International Brotherhood of Teamsters (IBT)
Resolution ask
Report on or disclose
ESG theme
  • Environment
  • Social
ESG sub-theme
  • Just Transition
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Industrials
Company HQ country
United States
Resolved clause
Shareholders request the Board of Directors prepare a report disclosing how United Parcel Service, Inc. ("UPS" or the "Company") is addressing the impact of its climate change strategy on relevant stakeholders, including but not limited to its employees, workers in its supply chain, and communities in which it operates, consistent with the "Just Transition" guidelines of the International Labor Organization and indicators of the World Benchmarking Association. The report should be prepared at reasonable cost, omit proprietary information, and be available to investors.
Supporting statement
At the 2021 UN Climate Change Conference, the United States and other governments agreed to the Just Transition Declaration, which aligns with the "Just Transition" guidelines in the International Labor Organization's Guidelines for a just transition towards environmentally sustainable economies and societies for all. The latter states an environmentally sustainable future requires "anticipating impacts on employment, adequate and sustainable social protection for job losses and displacement, skills development and social dialogue." (https:// www.ilo.org/wcmsp5/groups/public/---ed_emp/--- emp_ent/documents/publication/wcms_432859.pdf) Those guidelines emphasize the "pivotal role" of employers "in bringing about social, economic and environmental sustainability with decent work and social inclusion." The World Benchmarking Association's indicators include discrete, time-based indicators, including those tied to developing a just transition plan through consultation with affected stakeholders; mitigating the negative social impacts of the carbon transition on workers and communities; establishing a clear process for identifying job dislocation risks for workers and communities; and developing plans to retain and reskill workers for an inclusive workforce. (See https://assets.worldbenchmarkingalliance.org/app/uploads/2021/07/JustTransition-Methodology.pdf.)
In 2021, UPS announced its goal of becoming carbon-neutral across by 2050. This is laudable; however, UPS fails to disclose how this will be achieved in a manner consistent with a just transition, despite the potentially profound impact on employees and communities. A 2022 study by the World Benchmarking Alliance scored UPS at just 0.6/20 for its just transition indicator disclosure and called on the Company to increase reporting.
(See https://www.worldbenchmarkingalliance.org/publication/transport/companies/unitedparcel-service-ups/)
The challenges confronting a just transition strategy at UPS could not be clearer than when the company, in touting the sustainability benefits of route optimization technologies, states that "the greenest mile is the one not driven or flown." There are also questions about the role UPS accords to automation in achieving its carbon goals, even though such technologies risk displacing or down-skilling jobs. These efforts include deploying warehouse robotics and investments or partnerships with companies developing self-driving technologies and those working towards drone delivery. Commenting on such initiatives at the 2021 shareholder meeting, CEO Carol Tomé concluded by saying "there's a lot going on here. We've got a real commitment to reducing our carbon footprint." With route efficiency and automation seemingly core to UPS' climate-strategy, there is an urgent need for the Company to develop a just transition plan to ensure its actions are fair and equitable to affected workers and communities.

How other organisations have declared their voting intentions

Organisation name Declared voting intentions Rationale
Anima Sgr For Given the significant impact on the allocation of workers, production, and skills that the transition to a low-carbon economy will likely have in the transportation industry and UPS's lack of disclosure, as highlighted by the World Benchmarking Alliance (WBA), the company and shareholders would benefit from the creation of a just transition plan.
VidaCaixa For
Rothschild & co Asset Management For

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