Shareholders request that Quest Diagnostics Inc., within a year, issue near and long-term science-based greenhouse gas reduction targets aligned with the Paris Agreement’s ambition of limiting global temperature rise to 1.5 ºC and summarize plans to achieve them. The targets should cover the Company’s full range of operational and supply chain emissions.
The Intergovernmental Panel on Climate Change has advised that greenhouse gas (GHG) emissions must be halved by 2030 and reach net zero by 2050 to limit global warming to 1.5°C. Every incremental increase in temperature above the Paris Agreement’s goal of holding warming to 1.5°C will entail increasingly severe physical, transition, and systemic risks for companies and investors alike.
In its 2022 10-K, Quest Diagnostics Inc. (or “the Company) noted the physical risks of extreme weather events caused by climate change on its facilities, employees, consumers, and ability to conduct core business operations. Despite acknowledging these risks, the Company’s mitigation strategy falls short of what is needed to shield the Company and its investors from climate-related risks. The Company does not have specific nor quantified GHG reduction targets, citing only further consideration of fleet electrification, analysis of risks and opportunities, and improved measurement of Scope 1 and 2 emissions.
The Company trails its competitors in setting GHG reduction targets and managing risks. Abbott Laboratories, Thermo Fisher Scientific, and Labcorp have all set, or committed to setting, near-term science-based targets with the Science Based Targets initiative (SBTi) that cover scope 1-3 emissions. Thermo Fisher Scientific has also committed to setting a long-term target through SBTi.
By setting science-based targets, the Company may reap benefits from increased efficiency, lower energy costs, more resilient supply chains, and better preparation for climate-related regulations. Investors increasingly seek disclosure of how companies are addressing climate risk and planning to transition their business models to ones that align with limiting warming to 1.5°C. To assist companies in developing viable transition plans, groups including We Mean Business, CDP, the Global Financial Alliance for Net Zero, and the Task Force on Climate-Related Disclosures have provided guidance.
This proposal was filed by John Chevedden.
In assessing targets, we recommend,
• Taking into consideration approaches used by advisory groups like the Science-Based Targets initiative;
• Developing a transition plan that shows how the Company plans to meet its goals, taking into consideration criteria used by advisory groups; and
• Consideration of supporting targets for renewable energy, energy efficiency, fleet electrification and other measures deemed appropriate by management.