Amidst Growing Climate Risk, Shareholders Question Impact of High Carbon Investments in FedEx’s Target Date Retirement Funds
Shareholder proposal raises concern about differential impact on younger employees’ life savings
FOR IMMEDIATE RELEASE
MEDIA CONTACT: Sophia Wilson, swilson@asyousow.org, (341) 600-1832
BERKELEY, CA— Sept. 20, 2023—FedEx shareholders will vote on a proposal at the September 21 annual general meeting asking the company to report on how it is protecting employees from climate risk stemming from their retirement plan investment options. This proposal represents a growing concern among employees about the risks of investing retirement dollars in industries that contribute significantly to climate change.
There is increasing public concern about employee retirement plan investments and their contribution to climate change. Some 1,500 institutions representing more than $40 trillion in assets have committed to reducing exposure to investments in high-carbon industries. New York University this month committed to divest fossil fuels from their endowment. The University of California Retirement Savings Program, which holds $168 billion in assets under management for more than 300,000 retirement plan participants, moved to sell existing holdings and make no future investments in high-carbon industries, citing “long term financial risk.”
Investors are concerned that employees could end up becoming “investors of last resort” for fossil fuel companies through their 401(k) retirement savings plans, while other institutions across the country reduce their climate-related financial risk. Younger employees are more likely to suffer from the fallout of these holdings, an outcome that could lead to litigation and reputational damage for Fed Ex.
Despite growing risk to retirement plan beneficiaries, FedEx is failing to act, a position at odds with its public recognition of climate risk. FedEx has committed to achieve net zero operations by 2040, yet continues to direct billions of employee dollars into fossil fuels and companies responsible for rainforest destruction.
“Carbon-intense investments create systemic risk for all employee’s retirement plans, but younger employees are at particular risk because they are required to hold their funds until retirement. This summer’s litany of climate-related destruction is just the beginning; with continued emissions, devastation will grow, sacrificing long-term investment value,” said As You Sow president Danielle Fugere. “Companies that fail to address material climate risk in their retirement plans could be exposing themselves to potential legal liability.”
An employee in Australia recently filed a lawsuit against their employer, claiming their pension funds did not adequately disclose or assess the effect of climate change on its investments. It may only be a matter of time until U.S. employers face similar litigation. Recently, a judge in Montana sided with climate activists, who demanded the right to a livable planet.
As You Sow publishes monthly report cards rating retirement plans and mutual funds as part of its Invest Your Values initiative.
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As You Sow is the nation’s leading shareholder representative, 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.