Boston, May 3, 2024 – Twenty-two percent of shares were cast in favor of Green Century’s proposal asking The Timken Company (Timken) to establish emissions reduction targets that align with the Paris Agreement goal of limiting global temperature rise to 1.5°C.
Timken set a 2022 goal to reduce its climate emissions by 50% by 2030, but its target does not include indirect sources of emissions that typically comprise about 70 percent of many companies’ climate emissions.
Further, Timken plans to cut carbon emissions per unit of revenue, which would allow it to generate more emissions if it earns more revenue. Because of that, its overall emissions reduction may be as little as 7% by 2030 or, worse, even increase.
“We’re looking for Timken to move from a laggard to a leadership position on climate and the clean energy transition,” said Green Century President Leslie Samuelrich. “We appreciate the investors who stood with us in asking the company to accelerate and expand its efforts to cut its carbon footprint ,and we invite more to keep the pressure on Timken.”
Timken Flirting with Climate and Reputational Risk
Timken, headquartered in Cleveland, manufactures tapered bearings made out of steel. Its products are used by many industries including food and beverage, marine vessels, mining, agriculture, construction, commercial vehicles, and renewable energy systems. As of 2023, the company employed more than 19,000 people in 45 countries.
Timken has been recognized as one of America’s Most Responsible Companies by Newsweek, the World’s Most Ethical Companies® by Ethisphere, America’s Most Innovative Companies by Fortune and America’s Best Large Employers by Forbes.
Despite receiving multiple accolades, Timken is not fully addressing how its business contributes to climate change, which may hurt future profitability and make the company less attractive to investors. Companies with global operations and supply chains, like Timken, are vulnerable to a variety of climate impacts ranging from droughts and floods to hurricanes. Therefore, we believe concerted efforts to achieve economy-wide emissions reductions are paramount.
Timken is a supplier to the wind and solar industry, which comprised over 9% of its sales in 2023. Many companies across industry sectors are scrutinizing the sustainability of their supply chains, and renewable energy developers are sensitive about sourcing from suppliers that aren’t reducing their carbon footprints. If Timken does not take steps to reduce its climate emissions, it may incur reputational damage as its clients and investors may call out its refusal to adopt meaningful emissions reduction targets.
“Nearly 8,000 companies have now set or committed to set emissions reduction targets through the Science Based Targets initiative, which supports the goals of the Paris agreement,” commented Andrea Ranger, shareholder advocate at Green Century. “By holding back, Timken is creating risk for investors, especially when bold climate action is required.”