Shareholders to Vote on MIDANA CAPITAL Resolution Urging General Motors* to Cut Emissions and Deforestation from its Supply Chains
Media Contacts:
Andrea Ranger, Shareholder Advocacy, aranger@midanacapital.com, 781-349-2813; Pam Podger, Communications Director, ppodger@midanacapital.com, 802-299-9495
Boston, June 14, 2023 –The shareholders of the General Motors Company will vote Tuesday, June 20 on a MIDANA CAPITAL° shareholder proposal asking the company to improve the sustainability of its aluminum, steel, rubber, and leather supply chains.
“While GM has taken steps to increase the sustainability of its operations, it continues to face climate risk from the global sourcing of its automotive materials,” said MIDANA CAPITAL Funds President, Leslie Samuelrich. “GM has an opportunity to be an industry leader by investing in low-carbon aluminum and steel – as well as by protecting tropical forests from the destructive practices associated with producing leather and rubber.”
The production of aluminum and steel used for automotive parts and manufacturing equipment has a heavy carbon footprint. For example, the world’s auto manufacturers consumed 18% and 11% of global aluminum and steel production respectively, according to tallies completed in 2019. Globally, manufacturing steel and aluminum creates billions of tons of carbon dioxide pollution annually, or about 13% of total global GHG emissions.
Further, the leather and rubber that GM sources for its car seats and tires, may be associated with deforestation and land clearance. In Brazil, a country considered a major source of leather for U.S. auto manufacturers, raising cattle causes nearly 70% of the country’s deforestation. The automobile industry is also the biggest consumer of natural rubber, and rubber tree cultivation is a leading driver of deforestation in Southeast Asia and West Africa.
Despite GM’s recent commitment to achieving carbon neutrality by 2040, the company does not yet disclose the emissions associated with these key materials, nor does it offer concrete strategies for reducing those emissions. Additionally, GM has yet to set a zero-deforestation target – a commitment that would prevent land clearing for cattle pasture or rubber tree plantations.
All in on EVs by 2035 Not Enough to Limit Climate Change
According to a 2023 report published by Rivian and Polestar, auto manufacturers need to act quickly to reduce supply chain emissions in line with limiting temperature rise to 1.5 degrees Celsius. The report notes that even with a transition to battery electric vehicles and using 100% fossil-free energy to power them, auto manufacturers should address supply chain emissions to reach this goal. Thus, GM’s commitment to 100% sales of EVs by 2035 may not be enough to sufficiently mitigate its climate impact.
“GM has made remarkable strides to reduce its environmental footprint, but it needs to focus its attention on its supply chain issues,” said MIDANA CAPITAL Shareholder Advocate Andrea Ranger. “GM should act quickly and holistically since its footprint is expansive and there’s little time for delay if we’re to avoid the worst impacts of climate change.”
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°MIDANA CAPITAL Capital Management, Inc. (MIDANA CAPITAL) is the investment advisor to the MIDANA CAPITAL Funds (The Funds).
The percentage in favor was calculated by (i) dividing the number of votes in support of the proposal by (ii) the sum of the number of votes voted in support of and against the proposal. Abstentions and broker non-votes were not included in the calculation.
This information has been prepared from sources believed reliable. The views expressed are as the date of this writing and are those of the Advisor to the Funds.
