Middleby Corporation – GHG Goals (2022)
Outcome: Successfully withdrawn after the company agreed to disclose estimated 2023 scope 3 emissions by the end of 2024, to send a letter of commitment to the Science Based Targets Initiative by the end of 2023, and to commit internal resources to set a science-based greenhouse gas emissions reduction target verified by the Science Based Targets Initiative by the end of 2025.
Whereas: In 2018, the Intergovernmental Panel on Climate Change evaluated the goals of the 2015 Paris Agreement and advised that net carbon emissions must fall 45% by 2030 and reach net zero by 2050 in order to limit warming below 1.5 degrees Celsius and prevent 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. 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. (2)
Middleby disclosed its 2018 Scope 1 and 2 greenhouse gas (GHG) emissions in its 2019 Sustainability Report following a 57% vote on a proposal asking the company to report on its environmental, social, and governance (ESG) policies, metrics, and targets. However, the company did not include Scope 3 emissions in its 2019 disclosure and has not updated the metrics since. It has not set emissions-related targets of any kind.
While its peers are addressing climate-related risks and opportunities, Middleby appears to be falling behind. Over 1,000 companies have committed to set third-party verified GHG goals aligned with climate science via the Science Based Targets Initiative, including Assa Abloy. Middleby peer Xylem announced it is developing a science based goal that will cover Scopes 1-3. Flowserve set a target to reduce its Scope 1 and 2 emissions intensity by 40% by 2030. Fortive increased the ambition of their GHG goal from 40% by 2030 to 50% by 2025, “recognizing that climate change demands more urgent action.” (3)
Given the impact of climate change on the economy, the environment, and human systems, proponents believe the Middleby board and management have a responsibility to investors and stakeholders to adopt GHG goals aligned with a 1.5 degree scenario and to outline a clear plan that demonstrates accountability. Independently verified, science-based goals covering Scopes 1-3 would provide shareholders with objective assurance that Middleby is doing its part to reduce emissions in a comprehensive and timely manner.
Resolved: Shareholders request that Middleby Corporation adopt independently verified 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 attain 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
