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 to avoid the worst consequences of
climate change. Each 1°C temperature rise will decrease global GDP 12% and further increase severe
physical, transition, and systemic risks for companies and investors alike.8
More than 9,700 companies representing a broad range of industries have set or committed to setting
comprehensive GHG reduction targets across their full value chain, encompassing direct emissions from
operations and indirect emissions from upstream production and downstream product use. These targets
are validated by the leading third-party target verification organization, the Science Based Targets
initiative (SBTi).9
In its 10-K, Timken acknowledges that “severe weather associated with a changing climate could...
negatively impact the operation of our facilities, as well as those of our customers and suppliers." Timken has committed to reduce GHG emissions intensity in its operations by 50% per unit of revenue by
2030. GHG emissions intensity targets could allow an increase in the absolute level of GHG emissions by
Timken if demand for products or scale of the company increases. Moreover, Timken's emissions
intensity target does not include indirect emissions and lacks third party validation. Indirect emissions
from suppliers and product usage often account for the majority of a company’s GHG footprint, so
Timken’s goal does not address a major part of its GHG footprint.
Further, Timken’s 2022 sustainability report notes that “emissions intensity could experience volatility
during both recessions and high growth periods for industrial markets.” In short, investors are unable to
determine if Timken is progressing toward the absolute emissions reductions necessary to mitigate its
operational climate risks.
Timken lags industry peers SKF, Schaeffler AG, and JTEKT, which have set near-term science-based
1.5°C aligned absolute GHG reduction targets with SBTi inclusive of direct and indirect emissions.
Forthcoming regulations from the European Union and California state legislature will require Timken to
measure and disclose data on indirect emissions and related climate mitigation strategies. Nevertheless,
Timken has yet to disclose any data or plans pertaining to indirect upstream and downstream emissions
reductions, failing to demonstrate that it is proactively addressing this risk.
In the proponent’s opinion, Timken’s GHG emissions targets are inadequately aligned with investor
expectations for climate mitigation and the ambition necessary to respond to the financial, competitive,
and regulatory risks of climate change.+