INTERNATIONAL BUSINESS MACHINES (IBM) CORPORATION | Report on Congruency in China Business Operations and ESG Activities at INTERNATIONAL BUSINESS MACHINES (IBM) CORPORATION

Status
5.64% votes in favour
AGM date
Previous AGM date
Proposal number
5
Resolution details
Company ticker
IBM
Resolution ask
Conduct due diligence, audit or risk/impact assessment
ESG theme
  • Social
ESG sub-theme
  • Human rights
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Technology
Company HQ country
United States
Resolved clause
Resolved: Shareholders request that the Board of Directors commission and publish a third-party review within the next year (at
reasonable cost, omitting proprietary information) of whether the CompanyÕs activities and expenditures related to doing business
in China align with its ESG commitments, including its Human Rights Statement of Principles. The Board of Directors should
report on how it addresses the risks presented by any misaligned activities and expenditures and the CompanyÕs plans, if any, to
mitigate these risks, such as detailing its plans to shift these activities and expenditures to less repressive and hostile regimes.
Supporting statement
Supporting Statement: IBMÕs 2022 ESG report touts its environmental and ethical impacts.1 It advertises the CompanyÕs goals
of reducing pollution and reaching net-zero greenhouse gas emissions by 2030, as well as policies and practices that it says prioritize
qualities such as ethics and accountability.2 The ESG report also highlights the CompanyÕs commitment to human rights and its
Human Rights Statement of Principles.3
But nothing about doing business in China, which is controlled by the dictatorial and oppressive Chinese Communist Party (CCP),
does anything to further these ideals.
China is the worldÕs largest emitter of greenhouse gases, emitting more greenhouse gases than the entire U.S. and the developed
world combined.4 Exceeding more than 27 percent of the worldÕs total global emissions, ChinaÕs emissions have more than
tripled over the last three decades.5
Furthermore, China has an abhorrent human rights record. Its abuses against the Uyghurs and other ethnic minorities in Xinjiang
has sparked outrage, as evidence of forced labor programs, forced sterilizations, and torture at the hands of the CCP are undeniable.6
A report by the Office of the United Nations High Commissioner for Human Rights into Xinjiang concluded that Òserious human
rights violationsÓ against the Uyghur and Òother predominantly Muslim communitiesÓ have been committed by the country.7
U.S. Customs and Border Protection, the agency responsible for enforcing the U.S.Õs Uyghur Forced Labor Prevention Act (UFLPA),
has detained nearly $2 billion in goods under the UFLPA since June 2022.8 The largest amount of goods seized under the UFLPA
comes from the electronics industry, with 2,529 shipments detained. Nearly half of all shipments detained (44 percent) have been
denied.9
IBM nonetheless conducts significant business in China. According to reports, IBM facilitates the Chinese regimeÕs mass
surveillance program.10 It also conducts business in China despite China leading the world in greenhouse gas emissions and
committing genocide against ethnic minorities Ñ actions counter to everything that IBMÕs ESG report says the company stands
for. Therefore, it is critical that the Board commission and publish a third-party review that includes experts who are fully aware of
the dangers that China poses to the U.S. and its allies around the world, including its military-civil fusion strategy11 and
environmental and human rights abuses, to ensure that IBMÕs actions as a company live up to its words.
1 https://www.ibm.com/impact/files/reports-policies/2022/IBM_2022_ESG_Report_and_Addendum.pdf
2 Id.
3 https://www.ibm.com/ibm/responsibility/ibm_humanrightsprinciples.html
4 https://www.cnbc.com/2021/11/01/india-targets-2070-for-net-zero-emissions-china-makes-no-new-commitments.html; https://www.cnbc.com/2021/05/
06/chinas-greenhouse-gas-emissions-exceed-us-developed-world-report.html; https://rhg.com/research/chinas-emissions-surpass-developed-countries/
5 https://rhg.com/research/chinas-emissions-surpass-developed-countries/
6 https://www.state.gov/forced-labor-in-chinas-xinjiang-region/; https://www.bbc.com/news/world-asia-china-59595952; https://www.state.gov/wpcontent/uploads/2022/07/Forced-Labor-The-Hidden-Cost-of-Chinas-Belt-and-Road-Initiative.pdf
7 https://www.ohchr.org/sites/default/files/documents/countries/2022-08-31/22-08-31-final-assesment.pdf
8 https://www.cbp.gov/newsroom/stats/trade/uyghur-forced-labor-prevention-act-statistics
9 https://www.cbp.gov/newsroom/stats/trade/uyghur-forced-labor-prevention-act-statistics
10 https://www.top10vpn.com/research/huawei-china-surveillance-state/; https://theintercept.com/2019/07/11/china-surveillance-google-ibm-semptian/
11 https://www.state.gov/wp-content/uploads/2020/05/What-is-MCF-One-Pager.pdf

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