Organization: Tesla, Inc.

Year: 2019

Whereas:

WHEREAS:

Managing and reporting on environmental, social, and governance (ESG) topics, such as worker health and safety, resource usage, operational environmental impacts, and corporate governance policies helps companies compete in a business environment characterized by finite natural resources, changing legislation, and heightened public expectations for corporate accountability. Transparent, substantive reporting allows companies to gain strategic value from existing sustainability efforts and identify emerging risks and opportunities.

Tesla has faced various criticisms for its health and safety performance in recent years, to which the Company has responded via sporadic blog posts. Proponents believe many of these damaging criticisms could have been avoided if Tesla provided comprehensive disclosures that paint a clear picture of the company’s H&S record over time.

Tesla does not substantively report on its policies, programs, or performance on other ESG issues, including energy or water usage, greenhouse gas emissions, supply chain responsibility, raw materials sourcing, the life cycle benefits of its products, and/or workforce diversity. This leaves investors unable to adequately evaluate how the company is managing related risks and opportunities.

Corporate sustainability reporting is a very common business practice, undertaken by 85% of the S&P 500 in 2017 according to the Governance and Accountability Institute. Globally, 75% of 4,900 companies surveyed by KPMG in 2017 publish corporate responsibility reports. These figures include many of Tesla’s peers: Ford, GM, Daimler, Toyota, Volkswagen, BMW, Honda, Samsung, Siemens, AES Corporation, and SunPower.

Performance on ESG factors is widely linked to financial outperformance. Oxford University and Arabesque Partners reviewed 200 studies on sustainability and corporate performance and found 90 percent of studies show high ESG standards reduced companies’ cost of capital, and 80 percent show a positive correlation between stock price performance and good sustainability practices.

Investors have demonstrated strong interest in corporate reporting on sustainability policies, practices, data, and improvement targets. The 1,800 signatories of the Principles for Responsible Investment, representing approximately $70 trillion in assets under management, have pledged to seek “appropriate disclosure on ESG issues.” The Task Force on Climate- related Financial Disclosures (TCFD), whose members include JPMorgan Chase, UBS Asset Management, Generation Investment Management, and BlackRock, recommends that companies disclose targets to measure and manage climate risks and performance against these targets.

Resolved:

RESOLVED:

Shareholders request Tesla, Inc. issue an annual corporate sustainability report describing the Company’s Environmental, Social, and Governance (ESG) policies, management strategies, quantitative performance metrics, and improvement targets. This report should be prepared at reasonable cost and omit proprietary information.

Supporting Statement:

SUPPORTING STATEMENT:

Tesla should consider the resources and recommendations made by the widely accepted Global Reporting Initiative, CDP, Sustainability Accounting Standards Board, and the TCFD when identifying ESG topics to be included in this report. The report should address relevant policies, practices, metrics, and goals on topics such as: supply chain management, greenhouse gas emissions, waste minimization, energy efficiency, workforce health & safety, product quality and safety, and other relevant impacts.