Whereas: The Intergovernmental Panel on Climate Change has advised that greenhouse gas (GHG) emissions must be halved by 2030 and reach net zero by 2050 in order to limit global warming to 1.5 degrees Celsius and avoid the worst impacts of climate change.  Every incremental increase in temperature above 1.5 degrees Celsius will entail increasingly severe physical, transition, and systemic risks for companies and investors alike.
In its 2022 10-K, California Water Service Group (or “the Company”) noted that the impacts of climate change, particularly severe weather and natural disasters, may negatively affect its operations, customer demand, and the population of its service areas and potentially result in “unrecoverable costs” for the Company.
Despite acknowledging these risks, the Company’s climate goals may be insufficient to mitigate climate risk. The Company has not published science-based near or long-term GHG reduction targets, and it is unclear how its current climate efforts align with limiting warming to 1.5 degrees Celsius. By contrast, 17 water utilities have either set or committed to setting science-based GHG reduction targets through the Science Based Targets initiative (SBTi), including 9 who have committed to reaching net zero by 2050.
Investors seek increased disclosure on how companies are addressing the climate crisis and their plans to transition their business models to ones that align with limiting warming to 1.5 degrees Celsius. To assist companies in developing viable transition plans, groups including We Mean Business, CDP, State Street Global Advisors, and the Task Force on Climate-Related Disclosures have provided guidance.
California Water Service Group is asked to take additional action to comprehensively address its climate impact and mitigate both the physical risks to its operations and the transition risks associated with new regulation and a global shift to a clean energy economy. Proponents believe adopting 1.5 degree Celsius-aligned science-based targets for its full carbon footprint will help the Company mitigate these risks.
Resolved: Shareholders request California Water Service Group, within a year, issue near and long-term science-based GHG reduction targets aligned with the Paris Agreement’s ambition of maintaining global temperature rise to 1.5 degrees Celsius and summarize plans to achieve them. The targets should cover the Company’s full range of operational and supply chain emissions.