Mosaic Co. | Interfaith Center on Corporate Responsibility

Resolution Details

Company:

Mosaic Co.

Year:

2024

Issue Area:

Climate Change

Focus Area:

GHG Reduction and Targets

Status:

Filed

Resolution Text

WHEREAS: The Intergovernmental Panel on Climate Change reports that immediate, significant emissions reductions are required of all market sectors to align with the ParisAgreement’s1.5°C goal and stave off the worst consequences of climate change.1 Decarbonizing mining and agricultural systems is critical to achieving global decarbonization.2 Investor demand for science-aligned emission reductions and transition planning reflects the reality that climate-related risk exposure is growing.3

The Mosaic Company, a leading integrated producer of crop nutrients, faces increasing regulatory risks from its emissions-intensive value chain. In 2022, Mosaic was charged around $3 million in carbon levies from its value chain partners, such as its energy and rail providers, due to Canada’s carbon pricing regulations.4 As governments strive to meet their commitments to the Paris Agreement, Mosaic anticipates increasing adoption of carbon pricing and stricter regulations.5 Simultaneously, there are increasing opportunities for companies with decarbonization-enabling solutions for high-emitting sectors.6 By expanding its current commitments to cover its full value chain, Mosaic can meet new regulatory requirements and increase competitiveness in low-carbon innovation.

Last year, 30% of shareholders supported Mosaic reducing emissions across its value chain. Yet Mosaic still lacks specific targets for the 70% of its emissions that originate in its value chain, including raw material sourcing and its products’ emissions.7 While the Company does aim to achieve Net Zero by 2050 in its operations, focusing solely on operational emissions reduction is insufficient for companies with substantial value chain (Scope 3) emissions.8 By reducing emissions from its full value chain in alignment with the Paris Agreement’s 1.5°C goal, Mosaic can make proactive capital deployment decisions to avoid risk and take advantage of transition opportunities.

Mining and chemical peers are galvanizing action and investment toward decarbonization. Ashland Inc, FMC Corporation, Newmont Corporation, and PPGIndustries established emission reduction targets through the Science Based Targets initiative that cover all emission scopes, while Corteva Agriscience and The Chemours Company are in the validation process.9

By setting science-aligned emission reduction targets across its full value chain and providing a comprehensive transition plan, Mosaic can position itself to maximize climate-related opportunities and ensure long-term, sustainable value creation.

BE IT RESOLVED: Shareholders request the Board issue a report, at reasonable expense and excluding confidential information, disclosing how the Company intends to reduce its full value chain greenhouse gas emissions in alignment with the Paris Agreement’s 1.5°C goal.

SUPPORTING STATEMENT: Proponents suggest, at Board and Company discretion, that the report include:

A timeline for setting 1.5°C-aligned Scope 3 reduction goals;
A climate transition plan to achieve emissions reduction goals across all relevant scopes; and
Annual reports demonstrating progress towards meeting emissions reduction goals.

1 https://www.ipcc.ch/report/ar6/syr/downloads/report/IPCC_AR6_SYR_FullVolume.pdf, p.20

2 https://iea.blob.core.windows.net/assets/13dab083-08c3-4dfd-a887-42a3ebe533bc/NetZeroRoadmap_AGlobalPathwaytoKeepthe1.5CGoalinReach-2023Update.pdf, p.161

3 https://www.weforum.org/agenda/2023/11/climate-crisis-cost-global-economies/

4 https://www.cdp.net/en/formatted_responses/responses?campaign_id=83630982&discloser_id=1035826&locale=en&organization_name=The+Mosaic+Company&organization_number=12382&program=Investor&project_year=2023&redirect=https%3A%2F%2Fcdp.credit360.com%2Fsurveys%2F2023%2Fjwbhd7d6%2F292500&survey_id=82591262,C2.3a

5 https://www.sec.gov/ix?doc=/Archives/edgar/data/1285785/000161803423000003/mos-20221231.htm, p.F-27

6 https://www.bloomberg.com/news/articles/2023-11-22/investors-with-11-trillion-back-plan-to-reform-mining-industry?srnd=green

7 https://www.cdp.net/en/formatted_responses/responses?campaign_id=83630982&discloser_id=1035826&locale=en&organization_name=The+Mosaic+Company&organization_number=12382&program=Investor&project_year=2023&redirect=https%3A%2F%2Fcdp.credit360.com%2Fsurveys%2F2023%2Fjwbhd7d6%2F292500&survey_id=82591262,C6

8 https://sciencebasedtargets.org/resources/files/Net-Zero-Standard.pdf, p.33

9 https://sciencebasedtargets.org/companies-taking-action

Resolution Text

WHEREAS: Climate change is creating systemic economic, environmental, and social risks. The Commodity Futures Trading Commission underscored that climate change could impair the productive capacity of the U.S. economy.[1] According to the Intergovernmental Panel on Climate Change, the window for limiting global warming to 1.5 degrees Celsius (1.5°C) and avoiding the worst impacts of climate change is quickly narrowing. Immediate, sharp emissions reduction is required of all market sectors.[2]

In response to material climate risk, the Climate Action 100+ initiative, a coalition of over 700 investors with $60 trillion in assets, issued a net zero Benchmark outlining metrics that create climate accountability for companies and transparency for shareholders. Expectations include setting a net zero ambition, adopting 1.5 degree-aligned reduction goals across all relevant emission scopes, and disclosing decarbonization strategies.[3]

Credible climate transition planning protects against financial risk, increases economic opportunity, and prepares companies to address climate regulations which continue to expand globally.[4] As a leading integrated producer of concentrated phosphate and potash, Mosaic creates significant carbon emissions from its value chain, as well as nitrous oxide emissions from fertilizer use. Mosaic’s Florida facilities are already experiencing climate-related risks from extreme weather conditions, resulting in facility damages, shipment delays, and low product output.[5] Failing to align with net zero emissions and respond to this changing environment may make Mosaic less competitive and have a negative effect on its cost of capital and shareholders’ financial returns.

While the Company has committed to reduce its operational emissions to net zero by 2040, Mosaic has not established 1.5 degree-aligned reduction goals that cover all segments of its business, including its Scope 3 value-chain emissions, which comprise over 60% of Company emissions. By setting science-based reduction targets for its Scope 1-3 emissions, disclosing a decarbonization plan, and demonstrating progress toward achieving them, Mosaic can provide investors with assurance that it is reducing its climate contribution and addressing the physical, transition, and competitive risks associated with climate change.

SUPPORTING STATEMENT: Proponents suggest, at Board and Company discretion, that the report include:

A timeline for setting 1.5 degree-aligned Scope 3 reduction goals;
A climate transition plan to achieve emissions reductions goals across all relevant emissions scopes;
Annual reports demonstrating progress towards meeting emissions reduction goals;
Other information the Board deems appropriate.

[1] 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

[2] https://report.ipcc.ch/ar6wg3/pdf/IPCC_AR6_WGIII_FinalDraft_FullReport.pdf

[3] https://www.climateaction100.org/wp-content/uploads/2021/03/Climate-Action-100-Benchmark-Indicators-FINAL-3.12.pdf

[4] https://assets.bbhub.io/company/sites/63/2022/09/Expectations-for-Real-economy-Transition-Plans-September-2022.pdf, https://cdn.cdp.net/cdp-production/cms/guidance_docs/pdfs/000/003/101/original/CDP_technical_note_-_Climate_transition_plans.pdf?1643994309

[5] https://www.bloomberg.com/news/articles/2022-10-01/ian-latest-weaker-storm-brings-rain-flash-floods-to-carolinas?sref=TtrRgti9

Climate Transition Plan and GHG Reduction Goals

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