Tesla Inc. | Interfaith Center on Corporate Responsibility

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<h4>Resolution Details</h4>
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<strong>Company:</strong>
<p>Tesla Inc.</p>
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<strong>Year:</strong>
<p>2025 </p>
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<strong>Issue Area:</strong>
<p>Corporate Governance </p>
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<strong>Focus Area:</strong>
<p>Executive Compensation </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, within one year, the Board Compensation Committee adopt targets and publicly report quantitative data appropriate to assessing the feasibility of integrating sustainability metrics, including those regarding diversity and independence among senior executives, into performance measures or vesting conditions that may apply to senior executives under compensation plans or arrangements.<br><br><strong>Supporting Statement:</strong> In the Board’s discretion we recommend Tesla’s report include:<br>● A robust, comprehensive human rights due diligence process with specific performance<br>metrics aligned with UN Guiding Principles on Business and Human Rights assessing Tesla’s<br>success in preventing and mitigating human rights risks across its value chain.<br>● A performance-based component in the executive compensation structure directly tied to achieving established human rights and sustainability performance metrics, thus incentivizing the Board to embed such considerations into Tesla’s core operations.</p>
<p>Integrating sustainability metrics into executive compensation can enhance transparency, promote<br>responsible corporate citizenship, avoid legal and reputational harm, and ensure Tesla remains at the<br>forefront of sustainable business practices. Increasingly, “companies have rejected generous<br>executive-pay packages in shareholder votes… balking at the massive pay gaps between chief<br>executives and workers.” 1 Companies are “embracing different approaches to factoring ESG into executive pay.”2 Glass Lewis’ 2024 briefing on executive pay reported “a supermajority of the<br>largest companies in Europe and North America now consider ESG performance in at least one<br>incentive program.”3 Tesla does not integrate environmental or human capital management-related metrics in executive pay, despite 53.6% and 90.4% of S&P 500 companies doing so, respectively.4<br> </p>
<p>Tesla’s legal and reputational risks have already materialized. Tesla’s directors were ordered to<br>“return $735 million to the company to settle claims they grossly overpaid themselves in one of the<br>largest shareholder settlements of its kind.”5 Musk’s $56 billion award has “helped lift the ceiling on<br>CEO pay,” widening the gap between workers’ and executives’ pay packages, per The New York<br>Times,6 while Reuters now estimates the “package is worth about $101 billion.”7</p>
<p>ISS and Glass Lewis denounced ratification of Musk’s court-invalidated award,8 while Tesla’s Chair urged stockholders to ratify it “to retain Elon’s attention and motivate him.”9 According to Harvard<br>Law School Forum, “a well-governed board should take a highly critical court decision with the<br>seriousness that it deserves… [b]ut the Tesla Board chose not to,” and instead “misdescrib[ed] the<br>court’s decision in its efforts to obtain stockholder votes for the ratification,” did not cure the<br>Board’s “lack of independence,” and “reinstate[d] the invalidated grant exactly as it was, without even trying to obtain from Musk a time-and-attention commitment.”10 After the stockholder vote for<br>ratification, the court: continued to express “concern about Musk’s control and influence over the<br>company, including its board;” found “[t]here were undoubtedly a range of healthy amounts that the<br>Board could have decided to pay Musk;” and ultimately struck down the 2018 package a second<br>time, awarding the stockholder-plaintiff $345 million to be paid in cash or Tesla shares.11</p>
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<p>1 https://time.com/6184355/ceo-pay-investors-workers/ <br><br>2 https://corpgov.law.harvard.edu/2022/11/27/linking-executive-compensation-to-esg-performance/</p>
<p>3 https://www.glasslewis.com/proxy-season-global-briefing-executive-pay/</p>
<p>4<br>https://corpgov.law.harvard.edu/2024/01/15/esg-performance-metrics-in-executive-pay/#:~:text=Some%2090.4<br>%25%20of%20S%26P%20500%20companies%20now%20integrate%20at%20least,and%2053.6%25%20deploy%20environmental%20metrics</p>
<p>5 https://www.reuters.com/legal/tesla-directors-settle-lawsuit-over-compensation-735-mln-2023-07-17/<br>6 https://www.nytimes.com/2022/06/25/business/highest-paid-ceos-elon-musk.html</p>
<p>7<br>https://www.reuters.com/legal/delaware-judge-rejects-request-restore-elon-musks-56-billion-tesla-compensation-2024-12-02/</p>
<p>8 https://www.reuters.com/business/autos-transportation/iss-recommends-votes-against-2018-pay-plan-tesla-ceo-elon-musk-2024-05-31/<br>9 https://www.sec.gov/Archives/edgar/data/1318605/000110465924068792/tm2413800d20_defa14a.htm</p>

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<h3>Lead Filer</h3>
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<div class=”views-field views-field-nothing”><span class=”field-content”> Constance Ricketts</span></div><div class=”views-field views-field-title views-field-field-shareholder”><span class=”field-content”>Tulipshare</span></div>
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<strong>Focus Area:</strong>
<p>Annual Board Election </p>
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<strong>Status:</strong>
<p>Filed</p>
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<h2>Resolution Text</h2>
<p class=”p1″>RESOLVED: Tesla Inc. (“Company” or “Tesla”) shareholders, including James McRitchie of CorpGov.net, ask that our Company take all steps necessary to reorganize the Board of Directors into one class with each director subject to election each year for a one-year term so that all directors are elected annually. The proposal can be implemented in one-year, a best practice, or can be phased in.</p>
<p class=”p1″>Supporting Statement: Fully 90% of S&P 500 companies have declassified boards. Annual elections are widely viewed as a best practice. Annual election of each director makes directors more accountable, improving performance and increasing company value.</p>
<p class=”p1″>According to “What Matters in Corporate Governance” by Lucien Bebchuk, Alma Cohen, and Allen Ferrell of the Harvard Law School, classified boards like ours are one of six entrenching mechanisms negatively related to company performance.</p>
<p class=”p5″>Diligent’s Market Intelligence database includes the voting record of 24 shareholder resolutions to declassify boards during the period 2020 – 11/1/2024. They averaged 74% support. Only one proposal on this topic out of seven is reported to have received less than 50% of the vote in 2024. My proposal on this topic won 53% last year at Tesla.</p>
<p class=”p1″>BlackRock states, “Directors should be elected annually to discourage entrenchment and allow shareholders sufficient opportunity to exercise their oversight of the board.” Vanguard generally votes for proposals to declassify an existing board and votes against management or shareholder proposals to create a classified board.</p>
<p class=”p1″>According to Equilar, a trusted leader for corporate leadership data:</p>
<p class=”p8″>A classified board creates concern among shareholders because poorly performing directors may benefit from an electoral reprieve. Moreover, a fraternal atmosphere may form from a staggered board that favors the interests of management above those of shareholders. Since directors in a declassified board are elected and evaluated each year, declassification promotes responsiveness to shareholder demands and pressures directors to perform to retain their seat. Notably, proxy advisory firms ISS and Glass Lewis both support declassified structures.</p>
<p class=”p9″>Annual election of each director gives shareholders more leverage. For instance, if the Board approves excessive or poorly incentivized executive pay, shareholders can soon vote against the Chair of the pay committee instead of waiting for three years.</p>
<p class=”p10″>Consider our Company’s overall corporate governance: Directors can only be removed “for cause,” we cannot call special meetings or act by written consent. Changing many bylaw provisions requires a 66 2/3% vote, including the classified board provisions.</p>
<p class=”p11″>However, in its 2023 proxy, the Board indicated it would propose amendments to eliminate supermajority voting requirements once stockholder participation reached at least 65%. According to Diligent Market Intelligence, voter turnout was 83% in 2024. Therefore, we should see a Board proposal to eliminate supermajority voting requirements at the 2025 meeting.</p>
<p class=”p12″>Freefloat Analytics estimates Elon Musk holds 69% of “board influence” and categorizes the board type as “totalitarian.” Annual elections would facilitate electing a more democratic Board.</p>

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<h3>Lead Filer</h3>
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<div class=”views-field views-field-nothing”><span class=”field-content”> James McRitchie</span></div><div class=”views-field views-field-title views-field-field-shareholder”><span class=”field-content”>Corporate Governance</span></div>
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<strong>Focus Area:</strong>
<p>Biodiversity </p>
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<strong>Status:</strong>
<p>Filed</p>
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<h2>Resolution Text</h2>
<p class><strong>WHEREAS:</strong> Global concern is growing about deep sea mining, the process of extracting battery-related minerals from the deep seabed. Studies indicate that such mining risks destroying fragile habitats, dramatically reducing biodiversity, and causing irreversible damage to marine ecosystems.[1]</p>
<p class>Deep sea mining dredges the ocean floor, indiscriminately killing sea life in its path and releasing sediment plumes laced with toxic metals into the water column, poisoning marine food chains.[2] These plumes can cause a cascading effect of biodiversity loss far beyond the mining site, potentially disrupting entire food webs.[3]</p>
<p class>Evidence indicates that the detrimental impacts of deep sea mining are likely to result in a reduction in food supply and fisheries-related employment.[4]  It also harms the ability of oceans to sequester carbon and retain long-held carbon stores in the seabed.[5] Recent studies have illuminated the importance of an undisturbed seafloor environment to the ocean’s ability to generate oxygen.[6] Studies further demonstrate that deep sea mining can more than halve wildlife populations.[7] This finding is particularly concerning, given the discovery of over 5,000 new species in just one region planned for deep sea mining.[8]</p>
<p class>Deep sea mining’s scientific uncertainty and potentially catastrophic impacts have led many countries, civil society groups, and corporations to voice concern. More than thirty governments have called for a moratorium on deep sea mining.[9] In addition, electric vehicle (“EV”) manufacturers, including BMW, Renault, Rivian, Volkswagen, and Volvo, have joined tech giants Apple, Google, Salesforce, and Samsung in committing to a global deep sea mining moratorium and pledging to keep their supply chains deep sea mining-free until scientific findings are sufficient to assess the environmental risks.[10] This growing support for a deep sea mining moratorium by countries with major EV markets raises competitiveness and regulatory concerns for companies that allow deep sea mined materials into their supply chains.</p>
<p class>The mineral needs of large electric vehicle manufacturers such as Tesla are touted as the primary incentive for developing a deep sea mining industry. Yet, EV battery technology is trending away from minerals found in deep sea nodules, with a lithium surplus projected through 2027.[11] Such minerals are currently readily available terrestrially, and future demand for critical minerals can be reduced by over 50% through a combination of new technology, circular economy strategies, and recycling.[12]    </p>
<p class>By excluding deep sea mined minerals from its supply chains, Tesla can avoid the reputational harm of being linked to this unnecessary and environmentally harmful industry and avoid the financial risks of orienting its supply chain around an industry with an uncertain regulatory future.</p>
<p class><strong>BE IT RESOLVED:</strong>  Shareholders request that Tesla commit to a moratorium on sourcing minerals from deep sea mining.</p>
<p class>[1] https://www.fauna-flora.org/publications/fauna-flora-deep sea-mining-report-update-march-2023/, p.28</p>
<p class>[2] https://nhm.openrepository.com/handle/10141/622833, p.12</p>
<p class>[3] https://www.cell.com/current-biology/fulltext/S0960-9822(23)00815-1</p>
<p class>[4] https://www.nature.com/articles/s44183-023-00016-8; https://www.cbd.int/article/food-2018-11-21-09-29-49</p>
<p class>[5] https://www.frontiersin.org/journals/marine-science/articles/10.3389/fmars.2021.706161/full; https://www.frontiersin.org/journals/marine-science/articles/10.3389/fmars.2020.00165/full</p>
<p class>[6] https://www.nature.com/articles/s41561-024-01480-8 </p>
<p class>[7] https://www.cell.com/current-biology/fulltext/S0960-9822(23)00815-1</p>
<p class>[8] https://www.cell.com/current-biology/fulltext/S0960-9822(23)00534-1</p>
<p class>[9] https://deep sea-conservation.org/solutions/no-deep sea-mining/momentum-for-a-moratorium/</p>
<p class>[10] https://www.stopdeepseabedmining.org/endorsers/</p>
<p class>[11] https://www.blueclimateinitiative.org/next-gen-batteries-eliminate-need-for-dsm, p.2-3; https://www.reuters.com/markets/commodities/lithium-supply-surplus-set-stay-with-battery-makers-help-2024-12-10/</p>
<p class>[12] https://www.energy-transitions.org/wp-content/uploads/2023/08/ETC-Materials-Report_highres-1.pdf, p.81; https://rmi.org/wp-content/uploads/dlm_uploads/2023/12/xchange_batteries_the_battery_domino_effect.pdf, p.3; https://wwfint.awsassets.panda.org/downloads/the_future_is_circular___sintefmineralsfinalreport_nov_2022__1__1.pdf,  p.2-3<br> </p>

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<div class=”views-field views-field-nothing”><span class=”field-content”> Elizabeth Levy</span></div><div class=”views-field views-field-title views-field-field-shareholder”><span class=”field-content”>As You Sow</span></div>
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<strong>Focus Area:</strong>
<p>Political Contributions </p>
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<strong>Status:</strong>
<p>Filed</p>
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<h2>Resolution Text</h2>
<p class=”p1″><strong>Resolved: </strong>Shareholders of Tesla Inc. (“Tesla” or “Company”) hereby request that the Company provide a report, updated semiannually, disclosing the Company’s:</p>

Policies and procedures for making, with corporate funds or assets, contributions and expenditures (direct or indirect) to <strong>(a) </strong>participate or intervene in any campaign on behalf of (or in opposition to) any candidate for public office, or <strong>(b) </strong>influence the general public, or any segment thereof, with respect to an election or referendum.
Monetary and non-monetary contributions and expenditures (direct and indirect) used in the manner described in section 1 above, including:

The identity of the recipient as well as the amount paid to each; and
The title(s) of the person(s) in the Company responsible for decision-making.

<p class=”p6″>The report shall be presented to the board of directors or relevant board committee and posted on the Company’s website within 12 months from the date of the annual meeting. This proposal does not encompass lobbying spending.</p>
<p class=”p1″><strong>Supporting Statement</strong></p>
<p class=”p2″>As long-term shareholders of Tesla, we support transparency and accountability in corporate electoral spending. A company’s reputation, value, and bottom line can be adversely impacted by political spending. The risk is especially serious when giving to trade associations, Super PACs, 527 committees, and “social welfare” organizations – groups that routinely pass money to or spend on behalf of candidates and political causes that a company might not otherwise wish to support.</p>
<p class=”p2″>The Conference Board’s 2021 “Under a Microscope” report warns “Political activity can pose increasingly significant risks for companies, including the perception that political contributions – and other forms of activity – are at odds with core company values.”</p>
<p class=”p3″>A recent poll of retail shareholders by Mason-Dixon Polling & Research found that 83 percent of respondents said they would have more confidence investing in corporations that have adopted reforms that provide for transparency and accountability in political spending. Tesla scored 0.0 percent in the 2024 CPA-Zicklin Index of Corporate Political Disclosure and Accountability.</p>
<p class=”p2″>Publicly available records show Tesla has contributed at least $1 million in corporate funds since the 2010 election cycle.</p>
<p class=”p3″>This proposal asks Tesla to disclose all of its electoral spending, including payments to Trade Associations and 501(c)(4) social welfare organizations, which may be used for electoral purposes–and are otherwise undisclosed. This would bring our Company in line with a growing number of leading companies, including <strong>The Boeing Company</strong>, <strong>PayPal Holdings Inc</strong>., and <strong>RTX Corporation</strong>, which present this information on their websites.</p>
<p class=”p2″>Without knowing the recipients of our company’s political dollars we cannot sufficiently assess whether our company’s election-related spending aligns or conflicts with its policies on climate change and sustainability, or other areas of concern.</p>
<p class=”p4″><strong>Therefore: </strong>We urge your support for this critical governance reform.</p>

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<div class=”views-field views-field-nothing”><span class=”field-content”> Bruce Herbert, AIF</span></div><div class=”views-field views-field-title views-field-field-shareholder”><span class=”field-content”>Newground Social Investment</span></div>
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<strong>Focus Area:</strong>
<p>Collective Bargaining/Unionization </p>
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<strong>Status:</strong>
<p>Filed</p>
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<h2>Resolution Text</h2>
<p>Freedom of association and collective bargaining are fundamental human rights protected by international standards including the Fundamental Principles, United Nation’s Guiding Principles on Business and Human Rights, and United Nation’s Universal Declaration of Human Rights.</p>
<p>Tesla’s policies lack clarity as to which standards will prevail where applicable laws offer protections that fall short of international standards. Tesla’s Business Code of Ethics states that “Tesla is committed to upholding and respecting all internationally recognized human rights…” Yet, its Global Human Rights Policy undermines this commitment by stating Tesla respects labor rights “[i]n conformance with local law,” notably leaving out the commitment to the often more stringent international standards. </p>
<p>There are clear indications that Tesla may not be adhering to international labor rights standards.[i]  In Sweden, Tesla mechanics represented by IF Metall have been on strike for over a year and Tesla operations have suffered from a number of solidarity strikes after refusing to sign a collective agreement.[ii] In Germany, Tesla is refusing to bargain with employees represented by IG Metall and has been accused of threatening and firing IG Metall members of the works council according to public reports.[iii] </p>
<p>Freedom of association and collective bargaining rights enable workers to promote and realize other fundamental labor rights, including the rights to a safe and healthy workplace that is free from discrimination. In the United States, Tesla has faced multiple lawsuits around racial and sexual harassment[iv] and has had numerous health and safety violations.[v] Additionally, Tesla has been accused of unsafe working conditions in Germany.[vi]</p>
<p>Such reports may represent material reputational, legal, and operational risks to Tesla’s shareholders. For example, under the new German Supply Chain Due Diligence Act, companies can be held legally responsible for human rights abuses in their operations and global supply chains with fines of up to 2% of average annual “turnover” or revenue. Further the European Union’s new Corporate Sustainability Due Diligence Directive establishes a legal duty for companies to identify and address adverse human rights impacts throughout their operations and value chain.  </p>
<p>The Policy will add clarity, promote better adherence, and help mitigate risk.</p>
<p>[i] https://www.cnbc.com/2022/06/02/tesla-paid-pr-firm-to-surveil-employees-on-facebook-in-2017-union-push.html; https://www.theguardian.com/technology/2018/sep/10/tesla-workers-union-elon-musk;  https://www.cnbc.com/2017/04/25/workers-involved-in-union-activities-say-tesla-is-illegally-intimidating-them.html</p>
<p>[ii] https://www.bloomberg.com/news/articles/2024-10-01/tesla-faces-widening-strike-in-sweden-as-unions-double-down</p>
<p>[iii] https://www.reuters.com/business/autos-transportation/german-union-slams-aggressive-tesla-firing-works-council-rep-2024-10-14/;</p>
<p>[iv] https://www.law.com/therecorder/2024/06/18/deeply-troubling-tesla-sued-for-creating-racially-hostile-work-environment-amid-surge-of-racial-discrimination-litigation/?slreturn=20241105161518; https://www.thenation.com/article/society/tesla-sexual-harassment-discrimination-austin/</p>
<p>[v] https://www.theinformation.com/articles/at-teslas-giant-texas-factory-injuries-and-safety-lapses-mount; https://www.texasobserver.org/tesla-texas-worker-death-heat/;</p>
<p>[vi] https://www.reuters.com/business/autos-transportation/tesla-rejects-union-claims-reports-health-safety-issues-german-plant-2023-10-10/; https://fortune.com/2024/09/30/tesla-managers-germany-sick-leave-visit-employees-safety-union-elon-musk/</p>

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<div class=”views-field views-field-nothing”><span class=”field-content”> Dolapo Makinde</span></div><div class=”views-field views-field-title views-field-field-shareholder”><span class=”field-content”>Shareholder Association for Research and Education (SHARE)</span></div>
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Resolution Details

Company:

Tesla Inc.

Year:

2024

Issue Area:

Corporate Governance

Focus Area:

Annual Board Election

Status:

On Proxy

Resolution Text

RESOLVED: James McRitchie, of CorpGov.net, and other Tesla Inc (“Company”) shareholders ask that our Company take all the steps necessary to reorganize the Board of Directors into one class, with each director subject to election each year for a one-year term.

SUPPORTING STATEMENT: Arthur Levitt, former Chairman of the Securities and Exchange Commission, said, “In my view, it’s best for the investor if the entire board is elected once a year. Without annual election of each director shareholders have far less control over who represents them.”

Since directors in a declassified board are elected and evaluated each year, declassification promotes responsiveness to shareholder demands and pressures directors to perform to retain their seats. Declassified boards are more likely to be diverse in nature and increase accountability and responsiveness to shareholders.

More than 90% of S&P 500 companies elect each director annually. Annual elections are widely viewed as a corporate governance best practice to make directors more accountable, thereby contributing to improved performance and increased company value.

Shareholder resolutions by James McRitchie on this topic won 11 of 11 votes at companies since 2018, according to data compiled by Diligent, with an average vote of more than 77%. Proxy advisory firms ISS and Glass Lewis both supported all such proposals. According to one of our largest shareholders, BlackRock: “Directors should be re-elected annually; classification of the board generally limits shareholders’ rights to regularly evaluate a board’s performance and select directors.” Vanguard generally votes for proposals to declassify an existing board and votes against management or shareholder proposals to create a classified board.

According to Equilar, “A classified board creates concern among shareholders because poorly performing directors may benefit from an electoral reprieve. Moreover, a fraternal atmosphere may form from a staggered board that favors the interests of management above those of shareholders. Since directors in a declassified board are elected and evaluated each year, declassification promotes responsiveness to shareholder demands and pressures directors to perform to retain their seat.”

This proposal should also be evaluated in the context of our Company’s overall corporate governance as of the date of this submission: Shareholders cannot call special meetings, act by written consent, or modify various bylaws without at least 66 and 2/3% of the voting power of outstanding stock.

Our Company’s technology is second to none. Our Company’s corporate governance should meet the same high standards.

Increase Long-Term Shareholder Value

Vote FOR Elect Each Director Annually – Proposal [4*]

Resolution Details

Company:

Tesla Inc.

Year:

2024

Issue Area:

Inclusiveness

Focus Area:

Mandatory Arbitration

Status:

Filed

Resolution Text

RESOLVED: Shareholders request the Board of Directors oversee the preparation of an annual public report describing and quantifying the effectiveness and outcomes of Tesla, Inc.’s (Tesla) efforts to prevent harassment and discrimination against its protected classes of employees. In its discretion, the Board may wish to consider including disclosures such as:

· the total number and aggregate dollar amount of disputes settled by the company related to abuse, harassment or discrimination in the previous three years;

· the total number of pending harassment or discrimination complaints the company is seeking to resolve through internal processes, arbitration, or litigation;

· the retention rates of employees who raise harassment or discrimination concerns, relative to total workforce retention;

· the aggregate dollar amount associated with the enforcement of arbitration clauses;

· the number of enforceable contracts for current or past employees which include concealment clauses, such as non-disclosure agreements or arbitration requirements, that restrict discussions of harassment or discrimination; and

· the aggregate dollar amount associated with agreements containing concealment clauses.

This report should not include the names of accusers or details of their settlements without their consent and should be prepared at a reasonable cost and omit any information that is proprietary, privileged, or violative of contractual obligations.

Tesla states “Tesla has a zero-tolerance policy for harassment of any kind, and we have always disciplined and terminated employees who engage in misconduct, including those who use racial slurs or harass others in different ways.”1

Yet, there have been numerous serious allegations of racial or sexual harassment and discrimination at Tesla. As of November 21, 2023, these include, but are not limited to:

· The U.S. Equal Employment Opportunity Commission filed a lawsuit claiming that, Black employees at Tesla’s Fremont, California, manufacturing facilities “have routinely endured racial abuse, pervasive stereotyping, and hostility.”2

· 240 Black factory workers have filed testimonies in California’s Alameda County Superior Court seeking class action status for alleged racial discrimination.3

· The California Department of Fair Employment and Housing sued Tesla after receiving hundreds of complaints; DFEH alleges that employees were subjected to racial slurs; “segregated” and discriminated against in job assignments, pay, and promotion; and faced retaliation when they reported their experiences.4

There have been several high-profile derivative suits settled including at Twentieth Century Fox, Wynn Resorts, and Alphabet, alleging boards breached their duties by failing to protect employees from discrimination and harassment, injuring the companies and their shareholders.

Civil rights violations within the workplace can result in substantial costs to companies, including fines and penalties, legal costs, costs related to absenteeism, reduced productivity, challenges recruiting, and distraction of leadership. A company’s failure to properly manage its workforce can have significant ramifications, jeopardizing relationships with customers and other partners.

A public report such as the one requested would assist shareholders in assessing whether the Company is improving its workforce management.

1 https://www.sec.gov/Archives/edgar/data/1318605/000156459022024064/tsla-def14a_20220804.htm

2 https://www.eeoc.gov/newsroom/eeoc-sues-tesla-racial-harassment-and-retaliation

3 https://apnews.com/article/tesla-racism-black-lawsuit-class-action-21c88bddf60eca702560be58429495de

4 https://qz.com/2126548/why-is-california-suing-tesla/

Resolution Details

Company:

Tesla Inc.

Year:

2024

Issue Area:

Environment

Focus Area:

Biodiversity, Mining

Status:

Challenged

Resolution Text

WHEREAS: The deep sea contains many of the planet’s intact ecosystems and plays a crucial role in regulating the climate.1 Studies indicate that mining this underexplored and complex area for battery-related minerals will create irreversible habitat and ecosystem loss and could permanently destroy invaluable carbon storage.2

Deep sea mining (DSM) can obliterate sea floor life through dredging, while releasing sediment plumes laced with toxic metals, poisoning marine food chains.3 Deep sea organisms are slow-growing and fragile, and habitats can require millennia to recover from disturbances.4 The likely outcomes of DSM include biodiversity loss and jeopardized fish-based livelihoods and food supplies.5 Further, industrial-scale exploitation of the seafloor could have grave consequences for the ability of the oceans–one of the planet’s biggest carbon sinks—to absorb carbon dioxide, and may even lead to release of carbon stores.6Scientists warn that DSM, even done cautiously, could be devastating.

The scientific uncertainty and potential catastrophic impacts of DSM have led many civil society groups, including governments, private organizations, and manufacturers to voice concern. Twenty-four governments have put in place a ban, moratorium, or precautionary pause on DSM.7 Electric vehicle (EV) manufacturers including BMW, Volvo, Volkswagen, Rivian, and Renault have committed to a global moratorium on deepsea mining, pledging to keep their supply chains deep sea mineral free until scientific findings are sufficient to assess the environmental risks of DSM.8

Peers adopting the moratorium underscores the precautionary principle and the availability of more sustainable methods to obtain necessary materials. For example, the BMW Group emphasizes that “its sustainability strategy is also relying more on resource-efficient closed-loop material cycles–with the aim of significantly increasing the percentage of secondary material in vehicles.”9

Unlike its peers, Tesla has not supported a DSM moratorium, leaving shareholders concerned that the Company is not addressing the serious reputational and regulatory risks of DSM. The supply of deep sea minerals is also legally, technologically, and financially insecure, making it expensive and risky for Tesla to incorporate deep sea sourced minerals into its supply chain.10 DSM is also at odds with the Kunming-MontrealGlobal Biodiversity Framework.11

By committing to a global moratorium on DSM and an ocean mineral free supply chain, Tesla will join the ranks of Google, Samsung, Microsoft, Salesforce, Philips, and its EVpeers by protecting a critical ecosystem and reaffirming its commitment to responsible sourcing.

BE IT RESOLVED: Shareholders request that Tesla commit to a moratorium on sourcingminerals from deep sea mining, consistent with the principles announced in the Business Statement Supporting a Moratorium on Deep Sea Mining.

SUPPORTING STATEMENT: If Tesla cannot so commit, shareholders request that the Board disclose its rationale and assess the Company’s anticipated need for deep seamaterials.

1 https://climatesociety.ei.columbia.edu/news/rolling-deep-climate-change-and-deep-sea-ecosystems

2 https://www.unepfi.org/wordpress/wp-content/uploads/2022/05/Harmful-Marine-Extractives-Deep-Sea-Mining.pdf;https://www.frontiersin.org/articles/10.3389/fmars.2020.00165/full

3 https://www.iucn.org/resources/issues-brief/deep-sea-mining

4 https://www.fauna-flora.org/explained/depth-deep-seabed-mining-not-answer-climate-crisis/, p.17,26

5 https://www.nature.com/articles/s44183-023-00016-8

6 https://www.fauna-flora.org/wp-content/uploads/2023/05/fauna-flora-deep-sea-mining-update-report-march-23.pdf , p. 18

7 https://savethehighseas.org/voices-calling-for-a-moratorium-governments-and-parliamentarians/

8 https://www.stopdeepseabedmining.org/endorsers/

9 https://www.press.bmwgroup.com/global/article/detail/T0328790EN/bmw-group-protects-the-deep-seas

10 https://ejfoundation.org/news-media/environmentalists-warn-investors-of-deep-sea-mining-risk;https://www.financeforbiodiversity.org/leading-financial-institutions-call-on-governments-to-not-permit-deep-sea-mining/

11 https://dsm-campaign.org/wp-content/uploads/2021/10/Precautionary-Principle-Deep-Sea-Mining.pdf

Resolution Details

Company:

Tesla Inc.

Year:

2024

Issue Area:

Human Rights & Worker Rights

Focus Area:

Collective Bargaining/Unionization

Status:

Filed

Resolution Text

RESOLVED: the Board of Directors of Tesla, Inc. shall adopt and disclose a Noninterference Policy (“Policy”) upholding the rights to freedom of association and collective bargaining in its operations, as reflected in the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work (“Fundamental Principles”). The Policy should contain a commitment to:

● Non-interference when employees seek to form or join a trade union, and a prohibition against acting to undermine this right or pressure employees not to form or join a trade union;
● Good faith and timely collective bargaining if employees form or join a trade union;
● Uphold the highest standard where national or local law differs from international human rights standards; and
● Define processes to identify, prevent, account for, and remedy practices that violate or are inconsistent with the Policy.

SUPPORTING STATEMENT:

Freedom of association and collective bargaining are fundamental human rights protected by international standards including the Fundamental Principles, United Nation’s Guiding Principles on Business and Human Rights, and the United Nation’s Universal Declaration of Human Rights. According to the International Labour Organization, “Freedom of association refers to the right of workers … to create and join organizations of their choice freely and without fear of reprisal or interference.”

In some localities, the guidance outlined in these principles may be more stringent than national law. The United Nations High Commissioner for Human Rights asserts “…where national laws and regulations offer a level of human rights protection that falls short of internationally recognized human rights standards, enterprises should operate to the higher standard.”

Tesla’s policies lack clarity on this point. Tesla’s Business Code of Ethics states that “Tesla is committed to upholding and respecting all internationally recognized human rights,” but Tesla’s Global Human Rights Policy undermines this commitment by stating that Tesla respects labor rights “In conformance with local law,” notably leaving out the commitment to any more stringent international standards. Adopting the Policy will clarify to workers and other stakeholders that Tesla will adhere to the higher standard and avoid any real or perceived conclusion otherwise.

Tesla has been accused of interfering with workers’ rights in recent proceedings before the National Labor Relations Board (“Labor Board”). As of December 2023, the Labor Board has ruled against Tesla in several cases; others are pending. In 2021, the Labor Board upheld a ruling that Tesla illegally fired a worker in retaliation for union organizing, and illegally threatened workers regarding unionization. In Sweden, Tesla faces an expanding number of solidarity strikes after refusing to sign a collective agreement with mechanics represented by IF Metall.

Such reports represent material reputational and operational risks to Tesla’s shareholders. Workers’ ability to exercise their labor rights can also have positive outcomes for companies and investors. Unionization has been shown to support an equitable and inclusive workplace, decrease turnover, improve health and safety, boost innovation, and strengthen responsible business conduct.

Resolution Details

Company:

Tesla Inc.

Year:

2023

Issue Area:

Human Rights & Worker Rights

Focus Area:

Collective Bargaining/Unionization

Status:

Omitted

Resolution Text

RESOLVED: the Board of Directors of Tesla, Inc. to adopt and publicly disclose a policy on its commitment to respect the rights to freedom of association and collective bargaining in its operations, as reflected in the International Labour Organization Declaration on Fundamental Principles and Rights at Work (“Fundamental Principles”). The policy should:

Be applicable to Tesla’s direct operations and subsidiaries globally;

Include a commitment to non-interference when employees exercise their right to form or join trade unions;

Prohibit any member of management or agent of Tesla from undermining the right to form or join trade unions or pressuring any employee from exercising this right;

Describe the ongoing due diligence process Tesla will use to identify, prevent, mitigate and account for any violations of these rights, including how it will remedy any misaligned practices.

SUPPORTING STATEMENT: Freedom of association and collective bargaining are fundamental human rights protected by international legal standards including the Fundamental Principles and the United Nations Universal Declaration of Human Rights.

While Tesla’s Supplier Code of Conduct articulates its expectations for suppliers to respect these fundamental rights, Tesla does not have any corresponding policy commitments for its own operations, nor has it demonstrated how it would effectively operationalize such a commitment.

Tesla has been accused of interfering with workers’ freedom of association rights through tactics of surveillance, intimidation, and retaliation against employees involved in unionization efforts.1 In 2021, the National Labor Relations Board upheld a 2019 ruling that Tesla illegally fired a worker in retaliation for union organizing, and that the CEO had illegally threatened workers regarding unionization.2

Allegations of poor working conditions have been mounting for years at Tesla. Tesla faces two class action lawsuits from workers and a lawsuit from the California Department of Fair Employment and Housing alleging rampant workplace racial harassment and discrimination.3 Since 2021, at least seven current or former employees have sued Tesla over workplace sexual harassment.4 Workers have accused Tesla of wage theft and falsifying safety documents.5 Investigations by regulators and the media have found safety problems in Tesla factories.6

Such reports represent material reputational, legal, and operational risks to its shareholders. Allegations of interference with unionization efforts, and resulting regulatory enforcement, at other companies further demonstrate the significance of these risks.7 The ability of workers to organize, act concertedly, and engage in collective bargaining is an important human right that can be a net positive for companies and investors. Unionization has been shown to support an equitable and inclusive workplace, increase productivity, decrease turnover, improve health and safety, boost innovation, and strengthen responsible business conduct.8

The transition to a low-carbon future cannot come at the expense of workers’ fundamental human rights. A public commitment from Tesla to respect its workers’ labor rights would help address concerns about reputational, legal, and operational risk, protecting long-term shareholder value.

1 https://www.cnbc.com/2022/06/02/tesla-paid-pr-firm-to-surveil-employees-on-facebook-in-2017-union- push.html; https://www.theguardian.com/technology/2018/sep/10/tesla-workers-union-elon-musk; https://www.cnbc.com/2017/04/25/workers-involved-in-union-activities-say-tesla-is-illegally-intimidating- them.html
2 https://www.nytimes.com/2021/03/25/business/musk-labor-board.html
3 https://www.bloomberg.com/news/articles/2022-12-15/tesla-hotbed-of-racism-lawsuit-gains-momentum-in- california?sref=cdlcj118; https://arstechnica.com/tech-policy/2022/07/lawsuit-at-tesla-racial-discrimination-is- standard-operating-procedure/; https://calcivilrights.ca.gov/wp- content/uploads/sites/32/2022/02/TeslaPR2.10.22.pdf
4 https://www.rollingstone.com/culture/culture-features/tesla-sexual-harassment-lawsuit-investigation-elon- musk-1234590697/
5 https://www.tpr.org/technology-entrepreneurship/2022-11-16/workers-who-built-tesla-gigafactory-in-austin- accuse-employers-of-wage-theft-osha-violations
6 https://www.businessinsider.com/tesla-factory-injuries-incomplete-records-osha-california-2020-3; https://www.forbes.com/sites/alanohnsman/2019/03/01/tesla-safety-violations-dwarf-big-us-auto-plants-in- aftermath-of-musks-model-3-push/?sh=11e913e954ce
7 https://www.vice.com/en/article/bvmbpa/starbucks-union-nlrb-cease-and-desist; https://www.theguardian.com/technology/2022/nov/28/amazon-staten-island-new-york-retaliation
8 https://www.ipa-involve.com/Handlers/Download.ashx?IDMF=e0209cd6-05d5-414a-ac22-c1d61af403f7; https://www.ilo.org/wcmsp5/groups/public/—dgreports/—dcomm/— publ/documents/publication/wcms_842807.pdf; https://www.theglobaldeal.com/resources/The%20Business%20Case%20for%20Social%20Dialogue_FINAL.pdf; https://www.oecd.org/employment/negotiating-our-way-up-1fd2da34-en.htm

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