Resolved clauseRESOLVED: Shareholders request that W.W. Grainger issue near- and long-term science-based-greenhouse-gas-reduction targets aligned with the Paris Agreement’s ambition of limiting global temperature rise to 1.5 degrees Celsius and summarize plans to achieve them. The targets and plan should cover the Company’s full range of operational and supply chain emissions.
Whereas clauseWHEREAS: To limit global warming to 1.5 degrees Celsius, the Intergovernmental Panel on Climate Change has advised that greenhouse gas emissions must be halved by 2030 and reach net zero by 2050. Every incremental increase in temperature above 1.5 degrees will increase physical, transition, and systemic risks for companies and investors alike. The International Monetary Fund recently called for more aggressive climate action, as it is already observing the financial consequences of climate change globally.1 Up to 10 percent of global economic value could be lost by 2050.2
W.W. Grainger acknowledges that climate change creates operational and financial risks, stating that “the potential impacts of climate change on the Company’s suppliers, product offerings, operations, facilities and customers are accelerating and uncertain.”3 Yet, Grainger lacks near- and long-term Scopes 1-3 emission reduction targets in line with 1.5 degree Celsius science-based-target methodologies.
To date, the Company neglects Scope 3 emissions, targeting only Scope 1 and 2 greenhouse gas emissions reductions of 30 percent by 2030. Of note, these targets are based on a 2 degrees Celsius scenario, not 1.5 degrees, which scientists state will not avoid drastic climate risks.4 Grainger also lacks a climate transition plan.
Peers including Cummins, Deere, and Stanley Black and Decker have set ambitious and transparent science-based targets, with Scope 1, 2, and 3 SBTi-approved targets that are 1.5 degrees Celsius aligned for FY2030.
As a large supplier, Grainger must also consider its clients’ emission-reduction targets. Recognizing this pressure, Grainger states that its products, services, and resources are working to help clients meet their sustainability goals.5 Yet, the Company lacks the targets and transparency necessary to reassure clients of its climate commitments.
Investors believe additional action will position Grainger to comprehensively address climate risk, including adopting 1.5- degrees-Celsius-aligned science-based targets for its full carbon footprint and developing a climate-transition plan that details near-term quantitative actions to achieve medium- and long-term goals.
Supporting statementSUPPORTING STATEMENT: In assessing targets, shareholders recommend,
· Taking into consideration approaches used by advisory groups like the Science-Based-Targets initiative;
· Developing a transition plan that outlines how the Company plans to achieve its goals, taking into consideration criteria used by advisory groups like the Task Force for Climate-Related Financial Disclosures, CDP, and Transition Plan Taskforce;
· Consideration of setting targets for renewable energy, supply chain engagement, and other measures deemed appropriate by management.
1 https://www.reuters.com/sustainability/imf-increasingly-worried-about-material-impact-climate-change-economies-2023-07-25/
2 https://www.swissre.com/institute/research/topics-and-risk-dialogues/climate-and-naturalcatastrophe-risk/expertise-publication-economics-of-climate-change.html
3 0000277135-23-000014 (d18rn0p25nwr6d.cloudfront.net)
4 https://www.reuters.com/business/cop/whats-difference-between-15c-2c-global-warming-2021-11-07/ 5 https://assets.website-files.com/648396c38a9f09fc71f989b3/64a81b3568339109c6789bb8_Grainger 2023ESG Report.pdf