Resolved clauseResolved: Shareholders request that the Board publish a just transition report, disclosing how Wabtec is assessing, consulting on, and addressing, the impact of its climate change-related 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 ILO’s “just transition” guidelines. The report should be updated annually, at reasonable cost, and omit proprietary information.
Whereas clauseWhereas: The Paris Agreement underscored the “close links between climate action, sustainable development, and a just transition.” To support implementation of a just transition, the International Labor Organization (ILO) developed guidelines discussing the anticipated employment impacts, importance of skills development and decent work during the energy transition, and adaptation needed by companies and communities to avoid lost assets, livelihoods or involuntary migration.1
Investors increasingly acknowledge the importance of a just transition and providing greater market certainty in the transition to a low-carbon economy. Over 700 investors, managing $68 trillion, support Climate Action 100+, which requests just transition disclosures.
The freight rail and passenger transit industries are contributors to climate change and also have opportunities to provide climate solutions. As a result, almost 40 railroad companies globally have set, or committed to set, emission reduction targets with the Science Based Targets initiative,2 and cities globally have pledged to electrify their transit systems.3
Wabtec will play a meaningful role as its customers work to reduce their emissions, including through the transition to battery electric and hydrogen-powered locomotives. Wabtec has over 25,000 employees, 38% based in the United States and 62% globally, to support operations in 50 countries. Proponents believe this shift will cause disruption to current Wabtec operations, with potentially significant changes to the number of workers, skills required, and manufacturing facility size and location, leading to impacts on local communities, including changes to economic activity or tax revenue for local governments.
Wabtec does not currently disclose how its decarbonization strategy will align with just transition principles. While the Company states it is “committed to the development of and investment in the communities where our teams live and work,” it does not discuss the impact of its decarbonization strategy on communities and other stakeholders, or the global locations where impacts are anticipated. It also does not report any strategies to support, train, and retain its workers impacted by the transition.
Supporting statementSupporting Statement: Shareholders recommend the report include, at Board discretion:
A set of measurable, time-bound indicators, such as those recommended by Climate Action 100+, World Benchmarking Alliance, or the Glasgow Financial Alliance for Net Zero -- and progress against such indicators; and
Disclosure on the company’s stakeholder engagement process in developing its just transition plan, such as participating stakeholders, key recommendations, and progress on recommendations made.
1. https://www.ilo.org/wcmsp5/groups/public/---ed_emp/---emp_ent/documents/publication/wcms_432859.pdf
2. https://sciencebasedtargets.org/companies-taking-action
3. https://tfl.gov.uk/info-for/media/press-releases/2022/october/new-rapid-wireless-bus-charging-technologyintroduced-as-part-of-the-capital-s-journey-to-zeroemission#:~:text=This%20is%20the%20latest%20chapter,in%20its%20Bus%20Action%20Plan.; https://new.mta.info/project/zero-emission-bus-fleet