J.B. Hunt – GHG Goals (2022)
Outcome: Withdrawn based on multiple conversations with the company and their 2021 CDP statement, which gave us confidence that in 2022 it will commit to setting science-based targets.
Whereas: In 2018, the Intergovernmental Panel on Climate Change updated the goals of the 2015 Paris Agreement to advise that net carbon emissions must fall 45 percent by 2030 and reach net zero by 2050 to limit warming below 1.5 degrees Celsius, thereby preventing the worst consequences of climate change. However, in 2020, the UN reported the world is “way off-track” from achieving these goals. (1)
Exceeding 1.5 degrees Celsius presents risks to the global economy and investors: up to 10% of total global economic value is projected to be lost by 2050 under current emissions trajectories. (2) A warming climate is associated with supply chain disruptions, reduced resource availability, lost production, political instability, reduced worker efficiency, and adverse health impacts that disproportionately affect low-income communities and communities of color. Particulate matter emissions from heavy-duty diesel vehicles pollute communities of color at significantly higher rates than white communities. (3)
Several companies with heavy-duty vehicle fleets have committed to net-zero emissions by 2050, including DHL, FedEx, and UPS. Companies are prioritizing capital expenditures that support a net-zero future, with Walmart and FedEx committing to a 100% zero emissions vehicle (ZEV) fleet by 2040.
J.B. Hunt maintains that establishing a science-based target is unfeasible, although several logistics companies have done so. (4) J.B. Hunt’s current goals to reduce metric tons of CO2e per million company-operated ton miles (Scope 1) by 3% by 2025, and to convert 25% of its day cab and straight truck fleet to an alternative power fuel source by 2035 are not aligned with climate science. According to the International Energy Agency’s Net Zero by 2050 pathway, 50% of heavy truck sales must be electric by 2035. State and federal truck regulations are becoming increasingly stringent – EPA will be promulgating new rules in 2022, and California announced its goal for a ZEV truck fleet by 2045, promulgated a ZEV truck mandate, and is developing a ZEV fleet mandate. Fifteen states have also signed a memorandum of understanding calling for 30% ZEV truck sales by 2030.
In order to help avoid catastrophic climate consequences, meet increasingly strict regulatory requirements, and remain competitive with peers, proponents believe J.B. Hunt has a responsibility to its investors and stakeholders to set GHG goals aligned with a 1.5 degree scenario.
Resolved: Shareholders request that J.B. Hunt adopt short, medium, and long-term science-based greenhouse gas emissions reduction targets, inclusive of emissions from its full value chain, in order to achieve net-zero emissions by 2050 or sooner and to effectuate appropriate emissions reductions prior to 2030, in line with the Paris Agreement’s goal of maintaining global temperature rise at 1.5 degrees Celsius.
Supporting Statement: In assessing targets, we recommend, at management’s discretion:
- Consideration of approaches used by advisory groups such as the Science Based Targets Initiative;
- Disclosing these targets to investors at least 180 days prior to the next annual meeting.