Shareholders Support Climate Transition Plans at Major Defense Contractors
FOR IMMEDIATE RELEASE
MEDIA CONTACT: Stefanie Spear, sspear@asyousow.org, 216-387-1609
BERKELEY, CA—MAY 3, 2023—Shareholders voted on As You Sow climate transition planning resolutions at major defense contractors Lockheed Martin and Raytheon. The resolutions request disclosures of climate transition plans to align the companies’ emissions with the Paris Agreement’s net zero greenhouse gas reduction goals. The resolutions were supported by 35% of shareholders at Lockheed last week and earned 37% support at Raytheon on Tuesday.
The aerospace and defense sector emits a substantial amount of CO2 emissions through its operations and products, thus making it critical to success in limiting global warming. Both Lockheed and Raytheon are among the highest corporate emitters ranked by Climate Action 100+.
Currently, each company’s climate goals cover approximately 10% of its full range of climate emissions, leaving almost 90% unaddressed by current targets.
“Companies must incorporate all sources of material emissions into transition planning to ensure emissions are adequately managed now and into the future,” said Diana Myers, climate initiative senior associate at As You Sow. “Ignoring major components of emissions may leave the company vulnerable to unaccounted climate risks.”
For instance, as pressure to control global warming increases, countries are implementing carbon taxes and other climate regulations. In the U.S., the government is considering heightened requirements for major suppliers, including Lockheed and Raytheon. Under the proposed legislation, companies must disclose all material emissions and set science-based reduction targets to be able to compete for a bid.
This proposed regulation represents a substantial financial risk to unprepared defense contractors since a large portion of their sales come from the U.S. government and other NATO governments.
In addition to regulatory risk, Lockheed and Raytheon are increasingly facing a competitive disadvantage from peers in aerospace and defense, including Safran and BAE Systems. Global suppliers are increasingly responding to shifting demand preferences for low-carbon innovation and are committing to reduce their full value chain emissions.
“Lockheed and Raytheon are likely to be at a significant competitive disadvantage by failing to keep up with peer performance in bidding on contracts and in delivering sustainable solutions,” said David Shugar, climate initiative manager at As You Sow.
“The results of these shareholder votes underscore that investors want to see their companies address climate-related risks and take advantage of climate-related innovations and opportunities,” said Myers. “Scope 3 emissions are material and need to be addressed in company transition strategies.”
“The latest IPCC report shows that our chances of keeping our planet livable are dwindling. Incorporating Scope 3 emissions into transition plans is a critical step in shifting entire supply chains and the economy as a whole towards net zero,” said Shugar.
# # #
As You Sow is the nation’s leading shareholder advocacy nonprofit, with a 30-year track record promoting environmental and social corporate responsibility and advancing values-aligned investing. Its issue areas include climate change, ocean plastics, pesticides, racial justice, workplace diversity, and executive compensation. Click here for As You Sow’s shareholder resolution tracker.