Caterpillar Inc. | Interfaith Center on Corporate Responsibility

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<h4>Resolution Details</h4>
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<strong>Company:</strong>
<p>Caterpillar Inc.</p>
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<strong>Year:</strong>
<p>2026 </p>
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<strong>Issue Area:</strong>
<p>Corporate Governance </p>
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<strong>Focus Area:</strong>
<p>Shareholder Rights </p>
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<strong>Status:</strong>
<p>Filed</p>
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<h2>Resolution Text</h2>
<p><strong>RESOLVED</strong>: Shareholders request that the board of directors take the necessary steps to permit written consent by the shareholders entitled to cast the minimum number of votes that would be necessary to authorize an action at a meeting at which all shareholders entitled to vote thereon were present and voting (without any unnecessary restriction based on length of stock ownership or the method by which shareholders hold their shares). </p>
<p><strong>SUPPORTING STATEMENT</strong>: </p>
<p dir=”ltr”>This includes shareholder ability to initiate any appropriate topic for written consent. This includes that any associated request for a record date shall have the lowest allowable figure. This includes that written consent not include a solicitation clause mandating a certain percent of shares be solicited unless legally required.</p>
<p dir=”ltr”>Shareholders acting by written consent and calling for a special shareholder meeting are 2 means that shareholders of a company can use to put forth a proposal on a timely basis without waiting for the annual shareholder meeting. </p>
<p dir=”ltr”>Unfortunately Caterpillar (CAT) requires shares owning 25% of CAT stock outstanding to initiate the calling of a special shareholder meeting by shareholders.</p>
<p dir=”ltr”>There has never been a company response to a special shareholder meeting proposal that gave one example of a special shareholder meeting ever actually being held at a company that required 25% of shares outstanding to initiate. And companies that receive special shareholder meeting proposals hire law firms that have annual revenue of more than $1 Billion.</p>
<p dir=”ltr”>Thus the challenging 25% CAT requirement seems too high and seems to make the current so-called special shareholder meeting right useless at the 25% figure. To help make up for this AAL shareholders need a right to act by written consent.</p>
<p dir=”ltr”>A shareholder right to act by written consent could incentivize CAT directors to be more vigilant and more alert to face future headwinds like those that emerged in 2025:</p>
<p dir=”ltr”>A most significant headwind was the escalating cost of tariffs. CAT repeatedly raised its forecast for the net incremental tariff impact throughout the year, expecting the total for 2025 to be between $1.6 billion and $1.75 billion, up from initial estimates. These “unfavorable manufacturing costs” were cited as the primary reason for declining operating profits.</p>
<p dir=”ltr”>The ongoing tariff issues led analysts to project an 11% decline in North American construction equipment unit sales for 2025, and some downgraded their ratings for the stock. </p>
<p dir=”ltr”>Third-quarter 2025 operating profit was down 3% year-over-year, and the adjusted operating profit margin fell to 17% from 20% in Q3 2024. Profit per share for Q3 2025 was $4.88, a decrease from $5.06 in the third quarter of 2024.</p>
<p dir=”ltr”>Early in 2025, CAT warned of a potential slight sales drop for the full year due to weak equipment demand driven by high borrowing costs and persistent inflation. Sales were lower in the Construction Industries and Resource Industries segments during Q2.</p>
<p dir=”ltr”>Bobcat sued Caterpillar for patent infringement.</p>

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<h3>Lead Filer</h3>
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<div class=”views-field views-field-nothing”><span class=”field-content”> John Chevedden</span></div><div class=”views-field views-field-title views-field-field-shareholder”><span class=”field-content”>Chevedden Corporate Governance</span></div>
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<h4>Resolution Details</h4>
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<strong>Company:</strong>
<p>Caterpillar Inc.</p>
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<strong>Year:</strong>
<p>2025 </p>
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<strong>Issue Area:</strong>
<p>Inclusiveness </p>
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<strong>Focus Area:</strong>
<p>Equal Employment Opportunity (EEO) </p>
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<strong>Status:</strong>
<p>Filed</p>
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<h2>Resolution Text</h2>
<p>RESOLVED that shareholders of Caterpillar Inc. ask the Board of Directors to commission and oversee a civil rights audit, conducted consistent with the Civil Rights Audit Standards discussed below,i analyzing the bias and discrimination risks of Caterpillar’s policies and practices on talent recruitment, advancement, and retention, customer and revenue growth, and other business objectives.<br><br>WHEREAS Caterpillar states a commitment to diversity, equity, and inclusion (“DEI”). Chairman and chief executive officer Jim Umpleby has stated that Caterpillar is “committed to our journey of fostering a workplace that respects and celebrates our employees’ diverse backgrounds, experiences, and perspectives, and reflects the global nature of our customer base.” Indeed, Caterpillar has received numerous awards and recognition for its diversity commitments, including named by Forbes in 2024 as one of the best employers for diversity.<br><br>On September 19, 2024, however, Caterpillar announced that it would end or curtail some of its DEI commitments. For example, Caterpillar announced that it would require that all corporate training focus on business operations and that it would require approval from senior leaders for bringing in external speakers or participating in external surveys and awards. These announcements come on the heels of Caterpillar last year abandoning participation in the Human Rights Campaign Corporate Equality Index, which measures corporate policies affecting lesbian, gay, bisexual, transgender, and queer employees.<br><br>Shareholders need to understand the full impact of these rollbacks, including the company’s ability to build a talented workforce and grow its customer base and revenue. A civil rights audit is a tool to help companies and key stakeholders, including shareholders, identify and understand the bias and discrimination risks of a company’s policies, practices, products, and services. A civil rights audit also provides recommendations for addressing adverse impacts of a company’s actions.<br><br>The Civil Rights Audit Standards, published by PolicyLink, were developed by an independent committee, including business executives, union and worker group representatives, investors, and civil rights experts. These Standards provide a roadmap for how a company should conduct a civil rights audit. The Standards require that the auditor be independent and have a commitment to civil rights and racial justice; that the auditor meaningfully engage key stakeholders such as employees, customers, and civil rights groups; and that the company publicly share the final audit report on its website in an easily accessible location.<br><br>I ask Caterpillar to conduct a civil rights audit consistent with the Civil Rights Audit Standards. A civil rights audit will provide Caterpillar management and its shareholders the information and analysis they need to evaluate the company’s recent actions and their impact on legal and business risks, as well as the company’s progress in meeting its DEI and other business objectives.</p>
<p>———-</p>
<p>1: https://www.policylink.org/civil-rights-audit-standards<br> </p>

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Resolution Details

Company:

Caterpillar Inc.

Year:

2024

Issue Area:

Lobbying & Political Contributions

Focus Area:

Climate Lobbying

Status:

On Proxy

Resolution Text

RESOLVED: Stockholders request Caterpillar Inc. (“Company” or “Caterpillar”) prepare a report, updated annually, disclosing:

· Company policy and procedures governing direct and indirect lobbying and grassroots lobbying communications.

· Payments by Caterpillar used for (a) direct or indirect lobbying or (b) grassroots lobbying communications, in each case including the amount of the payment and the recipient.

· Caterpillar’s membership in and payments to any tax-exempt organization that writes and endorses model legislation.

· Description of management’s and the Board’s decision-making process and oversight for making payments described in sections 2 and 3 above.

For purposes of this proposal, a “grassroots lobbying communication” is a communication directed to the general public that (a) refers to specific legislation or regulation, (b) reflects a view on the legislation or regulation, and (c) encourages the recipient of the communication to take action concerning the legislation or regulation. “Indirect lobbying” is lobbying by a trade association or other organization of which Caterpillar is a member.

Both “direct and indirect lobbying” and “grassroots lobbying communications” include efforts at the local, state, and federal levels.

The report shall be presented to the Public Policy and Governance Committee and posted on Caterpillar’s website.

SUPPORTING STATEMENT

Full disclosure of Caterpillar’s lobbying activities and expenditures is needed to assess whether Caterpillar’s lobbying is consistent with its expressed goals and in stockholders’ best interests. Caterpillar spent $49,638,000 from 2010 – 2022 on federal lobbying. This does not include state lobbying, where Caterpillar also lobbies, but disclosure is uneven or absent. Caterpillar also lobbies abroad, spending between €100,000–199,000 on lobbying in Europe for 2022.

Companies can give unlimited amounts to third party groups that spend millions on lobbying and undisclosed grassroots activity.1 Caterpillar fails to disclose any of its payments to trade associations and social welfare groups (SWGs), nor amounts used for lobbying, to shareholders. Caterpillar belongs to the Business Roundtable (BRT), National Association of Manufacturers, and US Chamber of Commerce, which have spent over $2.3 billion on federal lobbying since 1998 and supports SWGs that lobby, like the Consumer Energy Alliance (CEA). Caterpillar also does not disclose its contributions to tax-exempt organizations that write and endorse model legislation, such as the American Legislative Exchange Council (ALEC).

Caterpillar’s lack of disclosure presents reputational risks to shareholder value when its lobbying contradicts the company’s public positions. For example, Caterpillar supports addressing climate change. Yet, the BRT lobbied against the Inflation Reduction Act2, and the Chamber has reportedly been a “central actor” in dissuading climate legislation over two decades.3 As Caterpillar has drawn attention for its tax practices amidst an IRS dispute,4 the BRT has lobbied against a new minimum corporate tax.5 CEA has repeatedly been accused of using citizens’ names on government petitions and public comments without permission.6 Caterpillar supports diversity and inclusion, yet groups have asked companies to leave ALEC “because of its voter restriction efforts.”7

Enhance Shareholder Value, Vote FOR Lobbying Disclosure – Proposal [4*]

1 https://theintercept.com/2019/08/06/business-group-spending-on-lobbying-in-washington-is-at-least-double-whats-publicly-reported/

2 https://www.theguardian.com/environment/2022/aug/19/top-us-business-lobby-group-climate-action-business-roundtable

3 https://www.washingtonpost.com/politics/2023/08/02/climate-group-pushes-big-tech-exit-nations-largest-business-lobby/

4 https://www.nprillinois.org/illinois/2022-09-08/caterpillar-settles-long-running-tax-dispute-with-irs

5 https://www.washingtonpost.com/business/2023/08/14/biden-corporate-tax/

6 https://www.cleveland.com/open/2023/09/their-names-appeared-on-letters-urging-fracking-ohios-state-parks-they-dont-know-how.html

7 https://www.thenation.com/article/politics/alec-corporations-democracy/

Resolution Details

Company:

Caterpillar Inc.

Year:

2023

Issue Area:

Human Rights & Worker Rights

Focus Area:

Conflict Zones, Ukraine, Uyghur Forced Labor (XUAR)

Status:

Vote

Vote Percentage:

14.40%

Caterpillar Inc. Human Rights Risks in Conflict-Affected and High-Risk Areas Policies – Proxy Exempt Solicitation

Wespath – Caterpillar Exempt Solicitation[68].pdf

Resolution Text

RESOLVED: Shareholders request that Caterpillar commission an independent third-party report, at reasonable expense and excluding proprietary information, assessing the effectiveness of the company’s due diligence process in determining if its operations or customers’ use of its products contribute to violations of its Code of Conduct (CoC) and Human Rights Policy (HRP).

WHEREAS: Caterpillar’s CoC commits the company to respecting human rights across global operations and its HRP is informed by the UN Guiding Principles on Business and Human Rights (UNGPs).1 Caterpillar’s Slavery and Human Trafficking Statement indicates that slavery is “inconsistent with our Values and will not be tolerated at Caterpillar, or anywhere in our supply chain.”2 However, investors lack transparency regarding Caterpillar’s compliance with its policies pursuant to the following:

Russian aggression risks: In September, President Putin ordered a ‘partial mobilization,’ requiring organizations in Russia to assist in the conscription of eligible employees and provide material support to the war effort. Caterpillar risks involvement in mobilization efforts through its subsidiaries and distributors, including Caterpillar Eurasia, Caterpillar Tosno, and Caterpillar Distribution, which employed over 2,350 staff and generated $800 million in revenue in 2021 and continue operations in Russia. Caterpillar continues to use Russia as a supply chain route;3

Value chain risks: In 2020, Caterpillar’s exclusive wholesaler for branded retail clothing received multiple shipments from Chinese companies involved in that government’s forced labor program in Xinjiang.4 Equipment purchased from Caterpillar and its authorized dealers has long been reported to be used in violations of international law in Myanmar,5 Occupied Palestinian Territory;67 and Western Sahara;8

Legal/reputational risks: The U.S. Government is imposing sanctions and trade controls against Russia,9 Myanmar,10 and China.11 The EU and its members are passing mandatory human rights due diligence (HRDD) laws,12 and companies are being held liable for contributions to violations of international law.13 Investors, representing $18 trillion in assets under management, view human rights and conflict as material risks, evidenced by public statements on Ukraine,14 Myanmar,15 and Xinjiang16;

Caterpillar and its customers’ activities in conflict-affected and high-risk areas (CAHRA) may result in heightened material risks through potential violations of Caterpillar’s CoC, HRP, and UNGPs. Should Caterpillar subsidiaries participate in the Russian mobilization, it may make the company complicit in war crimes.17 The International Finance Corporation notes that companies in CAHRA “face business risks that are much greater than those in other emerging markets,” including destruction of physical capital, deaths, and supply-chain disruptions.18

Caterpillar trails industry peers that have adopted measures to mitigate these risks, including John Deere’s human rights risk-based assessments,19 Komatsu’s HRDD process,20 and Volvo’s responsible sales policy.21

To mitigate risks associated with operations and customers in CAHRA, companies undertake heightened HRDD.

SUPPORTING STATEMENT
Shareholders seek information, at board and management discretion, through a report that:

Discusses how human rights risks in CAHRA are assessed and addressed; and
Assesses whether additional policies are needed to avoid contributing to violations in CAHRA.

1 https://www.caterpillar.com/en/company/governance/political-engagement/human-rights.html
2 https://s7d2.scene7.com/is/content/Caterpillar/CM20210622-bd91e6d42a#:~:text=Slavery%20and%20Human%20Trafficking%20are,training%20on%20an%20annual%20basis
3 https://www.bnnbloomberg.ca/caterpillar-still-ships-through-russia-after-halting-production-1.1737953
4 https://www.axios.com/caterpillar-xinjiang-uighur-labor-a6ec73df-b75e-4aea-ae76-cc8182ad6a3c.html
5 https://swedwatch.org/wp-content/uploads/2020/06/97_Myanmar_200610_uppslag_NY.pdf
6 https://www.hrw.org/news/2004/10/28/human-rights-watch-letter-caterpillar-inc
7 https://www.amnesty.org/en/location/middle-east-and-north-africa/israel-and-occupied-palestinian-territories/report-israel- and-occupied-palestinian-territories/
8 https://wsrw.org/en/archive/4380
9 https://www.state.gov/holding-russia-and-belarus-to-account/
10 https://www.state.gov/burma-sanctions/
11 https://www.state.gov/implementation-of-the-uyghur-forced-labor-prevention-act/
12 https://www.business-humanrights.org/en/big-issues/mandatory-due-diligence/
13 https://www.justsecurity.org/78097/corporate-criminal-liability-for-human-rights-violations-france-and-sweden-are-poised- to-take-historic-steps-forward/
14 https://media.business- humanrights.org/media/documents/Investor_Statement_on_the_Crisis_in_Ukraine_16_May_2022.pdf
15 https://investorsforhumanrights.org/investor-statement-myanmar-human-rights-and-business-activities-supporting-military- junta
16 https://investorsforhumanrights.org/sites/default/files/attachments/2021- 03/XUAR%20Investor%20Expectations%20Statement.pdf
17 https://fortune.com/2022/10/13/russia-putin-foreign-owned-companies-conscription-campaign-sanctions-ukraine-war- international-europe-popovych-freeman/
18 https://www.ifc.org/wps/wcm/connect/07cb32dd-d775-4577-9d5f-d254cc52b61a/201902-IFC-FCS-Study.pdf MOD=AJPERES&CVID=mzeJewf
19 https://s22.q4cdn.com/253594569/files/doc_downloads/support/Support-of-Human-Rights-in-Our-Business-Practices_2021.pdf
20 https://www.komatsu.jp/en/ir/library/annual/pdf/annual_06b.pdf
21 https://www.volvogroup.com/en/sustainability/social-responsibility/business-ethics/responsible-sales.html

Resolution Details

Company:

Caterpillar Inc.

Year:

2023

Issue Area:

Lobbying & Political Contributions

Focus Area:

Climate Lobbying, Lobbying

Status:

Vote

Vote Percentage:

28.40%

Resolution Text

Whereas full disclosure of Caterpillar’s direct and indirect lobbying activities and expenditures to assess whether Caterpillar’s lobbying is consistent with its expressed goals and in stockholders’ best interests:

Resolved, stockholders request the preparation of a report, updated annually, disclosing:

1. Company policy and procedures governing lobbying, both direct and indirect, and grassroots lobbying communications.

Payments by Caterpillar used for (a) direct or indirect lobbying or (b) grassroots lobbying communications, in each case, including the amount of the payment and the recipient.
Caterpillar’s membership in and payments to any tax-exempt organization that writes and endorses model legislation.
Description of management’s and the Board’s decision-making process and oversight for making payments described in sections 2 and 3 above.

For purposes of this proposal, a “grassroots lobbying communication” is a communication directed to the general public that (a) refers to specific legislation or regulation, (b) reflects a view on the legislation or regulation, and (c) encourages the recipient of the communication to take action with respect to the legislation or regulation. “Indirect lobbying” is lobbying engaged in by a trade association or other organization of which Caterpillar is a member.

Both “direct and indirect lobbying” and “grassroots lobbying communications” include local, state, and federal efforts.

The report shall be presented to the Public Policy and Governance Committee and posted on Caterpillar’s website.

Supporting Statement

Caterpillar spent $42,850,000 from 2010 – 2020 on federal lobbying. This does not include state lobbying, where Caterpillar also lobbies, but disclosure is uneven or absent. For example, Caterpillar’s lobbying against right-to-repair laws in states like New York has drawn attention.[1] Caterpillar also lobbies abroad, spending between €100,000–199,000 on lobbying in Europe for 2020.

Companies can give unlimited amounts to third-party groups that spend millions on lobbying and undisclosed grassroots activity. These groups may be spending “at least double what’s publicly reported.”[2] Caterpillar fails to disclose any of its payments to trade associations and social welfare organizations, nor amounts used for lobbying, including grassroots.

Caterpillar belongs to the Business Roundtable, National Association of Manufacturers, and Chamber Commerce, which together spent $108,148,000 on 2020 lobbying and drew attention for a “massive lobbying blitz” against raising corporate taxes to pay for infrastructure.[3] Caterpillar does not disclose its contributions in tax-exempt organizations that write and endorse model legislation, such as the American Legislative Exchange Council (ALEC).

Caterpillar’s lack of disclosure presents reputational risks when its lobbying contradicts company public positions. For example, Caterpillar supports diversity and inclusion, yet groups have asked companies to leave ALEC “because of its voter restriction efforts.”[4] Caterpillar supports mitigating climate change, yet the Chamber and Business Roundtable lobby to block climate action.[5] Caterpillar supports government investments to modernize infrastructure, yet its trade associations lobbied against raising corporate taxes to pay for it.

This topic won 44% of the vote last year.

[1] https://gizmodo.com/the-biden-administration-is-ready-to-go-to-war-over-ri-1847240802.

[2] https://theintercept.com/2019/08/06/business-group-spending-on-lobbying-in-washington-is-at-least-double-whats-publicly-reported/.

[3] https://www.washingtonpost.com/us-policy/2021/08/31/business-lobbying-democrats-reconciliation/.

[4] https://www.thenation.com/article/politics/alec-corporations-democracy/.

[5] https://www.desmog.com/2021/10/22/corporate-tech-giants-climate-action-oil-lobbyists-state-capitols/.

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