Resolved clauseResolved: Shareholders request that Spirit AeroSystems provide a report, updated semiannually, disclosing the Company’s:
Policies and procedures for making, with corporate funds or assets, contributions and expenditures (direct or indirect) to (a) participate or intervene in any campaign on behalf of (or in opposition to) any candidate for public office, or (b) influence the general public, or any segment thereof, with respect to an election or referendum.
Monetary and non-monetary contributions and expenditures (direct and indirect) used in the manner described in section 1 above, including:
The identity of the recipient as well as the amount paid to each; and the title(s) of the person(s) in the Company responsible for decision-making.
The report shall be presented to the Board or relevant Board committee and posted on the Company’s website within 12 months from the date of the annual meeting. This proposal does not encompass lobbying spending.
Whereas clauseWHEREAS: The Intergovernmental Panel on Climate Change has advised that greenhouse gas (GHG) emissions must be halved by 2030 and reach net zero by 2050 to limit global warming to 1.5°C. Every incremental increase in temperature above 1.5°C will entail increasingly severe physical and transition risks for companies and investors alike.
In its 10-K filed in February 2023, Southwest Airlines (“Southwest” or “the Company”) acknowledges it is “subject to various environmental requirements and risks, including increased regulation, changing consumer preferences, physical, environmental, and climate risks, and risks associated with climate change.”
Though Southwest has a goal to reach net zero by 2050 with supporting interim goals, its targets lack validation as aligned with limiting warming to 1.5 degrees Celsius. While it is a positive sign that Southwest intends to develop a 1.5°C-aligned transition plan per its 2022 CDP report, it is important for investors to understand how both the Company’s targets and its implementation plans are sufficiently ambitious to minimize climate-related risks.
Four of Southwest’s primary competitors, American, Delta, United, and JetBlue have near-term targets to reduce jet fuel GHG emissions from initial sourcing and production to use by 45% or more by 2035 validated by the Science Based Targets initiative (SBTi). United and Delta have both committed to SBTi’s net zero standard. More robust, validated targets and planning on par with its peers may strengthen Southwest’s industry competitiveness.
Investors increasingly seek disclosure of how companies are addressing climate risks and opportunities; emissions reduction targets to position their business for success in the transition to a low carbon economy; and climate transition plans – detailing the forward-looking, near-term, and quantitative actions the company will take to achieve its sustainability goals.
Investors believe adopting 1.5°C-aligned science-based targets for its full value chain and developing a robust climate transition plan will help the Company mitigate physical, regulatory, and reputational risks.
Supporting statementSupporting Statement: As a long-term shareholder of Spirit, I support transparency and accountability in corporate electoral spending. This includes
any activity considered intervention in a political campaign under the Internal Revenue Code, such as direct and indirect
contributions to political candidates, parties, or organizations, and independent expenditures or electioneering
communications on behalf of federal, state, or local candidates.
A company’s reputation, value, and bottom line can be adversely impacted by political spending. The risk is especially serious
when giving to trade associations, Super PACs, 527 committees, and “social welfare” organizations — groups that routinely
pass money to or spend on behalf of candidates and political causes that a company might not otherwise wish to support.
The Conference Board’s 2021 “Under a Microscope” report details these risks, recommends the process suggested in this
proposal, and warns “a new era of stakeholder scrutiny, social media, and political polarization has propelled corporate
political activity — and the risks that come with it — into the spotlight. Political activity can pose increasingly significant risks
for companies, including the perception that political contributions — and other forms of activity — are at odds with core
company values.”
Publicly available records show Spirit has contributed at least $500,000 in corporate funds since the 2010 election cycle.
This proposal asks Spirit AeroSystems to disclose all of its electoral spending, including payments to trade associations and
other tax-exempt organizations which may be used for electoral purposes — and are otherwise undisclosed. This would
bring our Company in line with a growing number of leading companies, including Northrop Grumman, Illinois Tool Works,
and United Parcel Service, which present this information on their websites.
Without knowing the recipients of our company’s political dollars we cannot sufficiently assess whether our company’s
election-related spending aligns or conflicts with its policies on climate change and sustainability, or other areas of concern.
Thus it will be a best practice for Spirit AeroSystems to expand its political spending disclosure.This proposal asks Spirit AeroSystems to disclose all of its electoral spending, including payments to trade associations and
other tax-exempt organizations which may be used for electoral purposes — and are otherwise undisclosed. This would
bring our Company in line with a growing number of leading companies, including Northrop Grumman, Illinois Tool Works,
and United Parcel Service, which present this information on their websites.
Without knowing the recipients of our company’s political dollars we cannot sufficiently assess whether our company’s
election-related spending aligns or conflicts with its policies on climate change and sustainability, or other areas of concern.
Thus it will be a best practice for Spirit AeroSystems to expand its political spending disclosure.
Filer = John Chevedden