Deere & Co. has made material commitments to the reduction of greenhouse gas emissions (GGE).¹ These commitments include the reduction of Scope 1 and Scope 2 emission by 50% and a reduction of Scope 3 emissions by 30%, all before 2030.² However, not enough has been done to assure investors that such a realignment of Deere towards renewable energy sources is in the best interest of shareholders by providing positive return on investment.

McKinsey Sustainability estimates that a global transition to net zero emissions would require $9.2 trillion dollars in annual global spending until 2050.³ This raises serious questions about the costs of achieving Deere’s goals, but the company has apparently not disclosed how much money it is spending on its planned GGE reduction, much less how this transition is providing a positive return for shareholders. Instead, Deere highlights its solar and wind investments, both of which do not include dollar totals or return on investment projections.⁴ Even investors committed to sustainability investing likely need accurate related cost information for proper share price valuation, which is information apparently not readily available to active shareholders, prospective investors, or even government agencies.

Seeing as Deere’s GGE reduction program is apparently a material investment presented by Deere without soluble financial metrics to judge it by, Deere’s reduction project may be a compelling target for anti-greenwashing action by the SEC, or another interested body.⁵

The SEC has historically targeted companies engaging in forms of greenwashing with considerable financial penalties. For example, Goldman Sachs Asset Management was fined for $4 million for policy and procedure failures related to ESG investments,⁶ and DWS Investment Management Americas Inc. was charged $25 million in part for misstatements regarding its ESG investment processes.⁷ While it is entirely possible that Deere has not engaged in the misconduct of Goldman Sachs or DWS, the lack of information provided by the company pertaining to its GHG reduction program is cause for concern. Should Deere be implicated in or sued for greenwashing, the impact on shareholders could be considerable, as company valuation and investor confidence plummets in response.

Thus, while there is ample evidence that emissions reductions programs may constitute financial risk in terms of both increased production costs, hostile litigation, and reputational damage,⁸ Deere & Co. has done little to reassure investors that they have considered these costs when pursuing GGE reductions. While it is possible that Deere is managing its planned reduction at a profit, shareholders lack material data upon which to make that assessment. For these reasons, among others, shareholders should support this proposal.