Organization: McKesson Corporation

Year: 2021

Whereas:

McKesson Corporation has adopted various ad hoc initiatives to reduce its carbon emissions, but has not yet adopted a company-wide plan to mitigate risks associated with the coming low-carbon economy. 

In 2018, the Intergovernmental Panel on Climate Change advised that net greenhouse gas (GHG) emissions must fall 45 percent by 2030 and reach net zero by 2050 to limit warming below 1.5°C, thereby preventing the worst consequences of climate change. Governments around the world are strongly regulating carbon emissions. These regulatory risks may affect the Company, and shareholders need to know what the company’s plan is.

A warming climate is associated with systemic portfolio risks to investors, including supply chain dislocations, reduced resource availability, lost productivity, commodity price volatility, infrastructure damage, and disruptions from severe weather events, among others. The Fourth National Climate Assessment (2018) reports that with continued growth in emissions, annual U.S. economic losses could reach “hundreds of billions of dollars by 2100.”

Without targets to curb greenhouse gas emissions, McKesson risks falling behind its peers.  For instance, Cardinal Health plans to announce a greenhouse gas emissions reduction goal for its pharmaceutical distribution business and customers by the end of 2021. And CVS, McKesson’s largest customer, has adopted a science-based GHG reduction target which could affect McKesson since it requires emissions reductions in the supply chain.  

Ramping up the scale, pace, and rigor of its climate-related initiatives may unlock opportunities for the Company’s growth by preparing the Company for future climate-related regulations that would affect the Company’s distribution operations. Further, targets to improve energy efficiency, increase renewable energy usage, and electrify distribution fleets could reduce costs.

Given the costs of failing to address climate change risks, the Company has a responsibility to its investors to disclose whether, and how, it plans to reduce its emissions across its value chain.

Resolved:

Shareholders request the Company issue a report, at reasonable cost and omitting proprietary information, describing if, and how, it plans to reduce its total contribution to climate change and align its operations with the Paris Agreement’s goal of maintaining global temperature increases well below 2°C, ideally striving for 1.5°C. 

Supporting Statement:

In the report, shareholders seek information, among other issues at board and management discretion, on the relative benefits and drawbacks of integrating the following actions: 

● Developing a low-carbon transition plan;

● Adopting short- and long-term GHG emissions reduction targets for the Company’s full carbon footprint, including both operations and value chain;

● Increasing the scale, pace, and rigor of existing initiatives aimed at reducing the GHG emissions intensity of the Company’s operations and products; 

● Adopting renewable energy, energy efficiency, and electric vehicles targets; and

● Engaging with affected stakeholders including employees, their representatives, and communities impacted by the Company’s transition plan, if applicable.