WHEREAS: The increasing rate and number of climate-related disasters affecting society is causing alarms to be raised within the executive,[1] legislative,[2] and judicial[3] branches of government, making the corporate sector’s contribution to climate mitigation a significant policy issue;

The Commodity Futures Trading Commission recently issued a report[4] finding that climate change poses a significant risk to, and could impair the productive capacity of, the U.S. economy;

Shareholders are increasingly concerned about material climate risk to both their companies and their portfolios and seek clear and consistent disclosures from the companies in which they invest; 

In response to material climate risk, the steering committee of the Climate Action 100+ initiative (CA100+), a coalition of more than 500 investors with $52 trillion in assets, issued a Net Zero Company Benchmark (Net Zero Benchmark) calling on the largest carbon emitting companies – including our Company – to work toward reducing greenhouse gas (GHG) emissions to net zero, improving climate governance, and providing specific climate related financial disclosures;[5]

A core indicator of company alignment with the Paris Agreement is Indicator 1, titled “Net Zero GHG emissions by 2050 (or sooner) ambition,” which seeks disclosure on whether the company has set an ambition to achieve net zero GHG emissions by 2050 or sooner and whether any such ambition statement covers all relevant emissions scopes (“Net Zero Indicator”);

United has not yet complied with the Net Zero Indicator. In 2018, United set a goal of reducing its emissions 50 percent below 2005 levels by 2050;[6] however MSCI reports that United’s current absolute emissions reduction rate together with its low rate of aircraft replacement puts it at risk for not meeting even this target.[7] United is also lagging behind its peers, many of whom have made more ambitious pledges, aligned with achieving carbon neutrality by 2050. In September 2020, American Airlines and its Oneworld alliance partners, including Qantas and British Airways, committed to reach net zero emissions by 2050.[8] Earlier this year, JetBlue announced its carbon neutral plan for domestic flights.[9] Delta Airlines also committed $1 billion to becoming "carbon neutral."[10]

BlackRock notes that investment flows into “sustainable” and climate aligned assets will drive long term outperformance relative to companies perceived as having weaker sustainability characteristics.[11],[12]

RESOLVED: Shareholders request the Board of Directors issue a report, at reasonable expense and excluding confidential information, evaluating and disclosing if and how the company has met the criteria of the Net Zero Indicator, or whether it intends to revise its policies to be fully responsive to such Indicator.      

Supporting Statement: Proponents suggest, at Company discretion, the report also include any rationale for a decision not to set and disclose goals in line with the Net Zero Indicator.

[1] https://www.cnn.com/2020/11/11/politics/climate-executive-actions-joe-biden/index.html

[2] https://www.govtrack.us/congress/bills/subjects/climate_change_and_greenhouse_gases/6040#sort=-introduced_date

[3] https://www.nature.com/articles/d41586-020-00175-5

[4] https://www.cftc.gov/sites/default/files/2020-09/9-9-20%20Report%20of%20the%20Subcommittee%20on%20Climate-Related%20Market%20Risk%20-%20Managing%20Climate%20Risk%20in%20the%20U.S.%20Financial%20System%20for%20posting.pdf

[5]  https://climateaction100.wpcomstaging.com/wp-content/uploads/2020/11/FINAL-CA100-Master-Indicators.pdf

[6] https://www.united.com/ual/en/us/fly/company/global-citizenship/environment/fuel-efficiency-and-emissions-reduction.html#:~:text=Our%20goal%3A%2050%20percent%20emissions,what%20we%20produced%20in%202005.

[7] United Airlines MSCI ESG Ratings, Dec. 18, 2019.

[8] https://www.oneworld.com/news/2020-09-11-oneworld-member-airlines-commit-to-net-zero-carbon-emissions-by-2050

[9] https://www.businesswire.com/news/home/20200106005549/en/JetBlue-Prepares-Business-New-Climate-Reality

[10] https://news.delta.com/delta-commits-1-billion-become-first-carbon-neutral-airline-globally

[11] https://www.blackrock.com/corporate/literature/whitepaper/bii-portfolio-perspectives-february-2020.pdf

[12] https://www.morningstar.com/articles/994219/sustainable-funds-continue-to-rake-in-assets-during-the-second-quarter