RESOLVED: Shareholders request that the Board of Directors conduct an evaluation and issue a report (at reasonable cost, omitting proprietary information) describing if, and how, Tesla Inc.’s (“Tesla’s”) lobbying and policy influence activities (direct and through trade associations and social welfare and nonprofit organizations) align with the Paris Agreement’s goal to limit average global warming to 1.5 degrees Celsius, and how Tesla plans to mitigate risks presented by any misalignment. The evaluation should examine underlying direct and indirect lobbying activities and not rely solely on publicly stated positions to determine alignment with the Paris Agreement.

SUPPORTING STATEMENT

Recent reports highlight critical gaps between the climate commitments made by national governments and the actions necessary to prevent the worst effects of climate change.1 An April 2022 Intergovernmental Panel on Climate Change assessment makes it clear that nations are not doing enough to limit global warming2 to 1.5 degrees Celsius and that this goal is now almost entirely out of reach unless immediate and dramatic changes are implemented to limit fossil fuel use and re-envision energy, transport, and land development. Society now has just a slim chance of meeting this goal.3

Companies like Tesla have a crucial role to play in empowering policymakers to close these gaps. Investors need clear information on how companies are taking action to do so, including an assessment of the alignment between companies’ policy advocacy and both the goals of the Paris Agreement and companies’ own climate commitments and policy advocacy.4

Of particular concern is policy advocacy done by trade associations and other organizations that often present major obstacles to the implementation of climate policies. Companies may tout their own climate efforts, but often fail to account for their support for organizations and initiatives that work to block critical climate policies.

Tesla wants to “accelerate the world’s transition to sustainable energy.”5 Yet it is unclear how Tesla uses public policy engagement or other forms of lobbying to achieve this aim. Tesla’s 2020 Impact Report discusses neither its climate policy priorities, nor the policy strategies and goals that would assist Tesla in meeting its sustainable business objectives. Tesla does not appear to disclose the trade associations, business alliances, or social welfare organizations in which it participates. Tesla’s governance documents do not cover political engagement or lobbying and there is no mention of Board or executive oversight for lobbying activities in its Board Committee charters. It is therefore difficult for investors to determine if Tesla’s policy engagement aligns with the goals of the Paris Agreement and the Company’s own strategic business goals.

Corporate lobbying that is inconsistent with the goals of the Paris Agreement poses mounting systemic risks to our financial systems and infrastructure, as delays in curbing greenhouse gases increase physical risks from extreme weather, threaten regional economic stability, and heighten portfolio volatility.6 Proponents view fulfillment of the Paris Agreement as imperative because climate scenarios of 3 degrees Celsius or more are unacceptable and uninvestable.

1 https://www.unep.org/resources/emissions-gap-report-2021

2 https://report.ipcc.ch/ar6wg3/pdf/IPCC_AR6_WGIII_SummaryForPolicymakers.pdf

3 https://www.nature.com/articles/s41586-022-04553-z

4 https://www.politico.com/news/2021/04/20/investors-corporate-climate-lobbying-activity-483429

5 https://www.tesla.com/ns_videos/2020-tesla-impact-report.pdf

6 https://www.occ.gov/news-issuances/speeches/2021/pub-speech-2021-116.pdf?source=email