TESLA MOTORS, INC. | Report on mitigating supply chain GHG emissions and associated risks in line with net zero ambition at TESLA MOTORS, INC.

Status
Omitted
Resolution details
Company ticker
TSLA
Lead filer
Green Century Capital Management, Inc.
Resolution ask
Report on or disclose
ESG theme
  • Environment
ESG sub-theme
  • GHG targets / emissions
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Consumer Discretionary
Company HQ country
United States
Resolved clause
Shareholders request that Tesla, at reasonable expense and omitting proprietary information, issue a report describing if and how it plans to mitigate supply chain GHG emissions and associated risks in line with its net zero ambition.
Whereas clause
The Intergovernmental Panel on Climate Change advises that greenhouse gas
(GHG) emissions must be halved by 2030 and reach net zero by 2050 to limit global
warming to 1.5°C.1 Every incremental increase in temperature above 1.5°C will entail
increasingly severe physical and systemic risks for companies and investors.
Steel and aluminum are responsible for approximately 10% of global GHG emissions.2,3
The auto industry is the second-largest consumer of steel, procuring 12% of global supply,
4
and is the largest aluminum buyer in the world.5
In its 2024 Impact Report, Tesla articulates an ambition to reach net zero emissions as
soon as possible and to accelerate the world's transition to sustainable energy not only
through its products and operations, but also through its supply chain. Supply chain
emissions from sources such as batteries, steel, and aluminum account for the majority of
Tesla’s GHG emissions, with steel and aluminum representing approximately 18% of
supply chain emissions.
6
Tesla has enhanced transparency by disclosing disaggregated supply chain emissions
from sources such as steel, aluminum, and battery production, and engages with some
suppliers on decarbonization strategies.7 However, Tesla lags peers in mitigating supply
chain GHG emissions through low carbon commodity procurement:
• Through the First Movers Coalition, Ford and General Motors have committed to
procure at least 10% of primary steel and aluminum as low carbon by 2030.8, 9
• Nissan will transition to low-carbon aluminum by 2030.10
• Volvo and Mercedes-Benz are improving steel supply chain sustainability by
participating in the ResponsibleSteel initiative.11
Volvo has joined SteelZero, pledging to procure 50% net zero steel by 2030 and
100% by 2050.12
• BMW, Mercedes-Benz, Volvo, Porsche, and other automakers have signed offtake
agreements for low carbon steel produced by Stegra’s green hydrogen mill.13
Enhanced disclosure of Tesla’s plans to mitigate supply chain GHG emissions, including
steps to increase procurement of low carbon steel and aluminum, would help the
Company appropriately manage competitive risks and opportunities, and mitigate climate
risk.
Supporting statement
The essential purpose of this proposal is for Tesla to produce forward-looking disclosures demonstrating whether its existing policies and actions are aligned with its net zero ambition, and if not, to provide additional strategies, metrics, and milestones necessary for mitigating supply chain GHG emissions accordingly. In
developing the disclosures, proponents recommend, at management discretion:
• Addressing the pros and cons of participating in global value chain emissions
reduction initiatives such as ResponsibleSteel and SteelZero; and
• Analyzing the financial and climate-related impacts on Tesla’s business of a range
of low-carbon steel and aluminum adoption scenarios.

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