Palo Alto Networks Shareholders Support Accounting for Climate Risk When Making Retirement Investments for Employees
Palo Alto Networks Shareholders Support Accounting for Climate Risk When Making Retirement Investments for Employees
High carbon investments devalue retirement portfolios over time due to growing climate costs, particularly for younger employees with longer investment horizons
FOR IMMEDIATE RELEASE
MEDIA CONTACT: Ryon Harms, ryon@asyousow.org, (310) 579.2188
BERKELEY, CA—DECEMBER 16, 2024 — On Friday, Palo Alto Networks’ (NYSE: PAN) reported that 12.2% of shareholders voted in support of a proposal asking the company to report on how it is protecting employees from growing climate portfolio risk.
“We are pleased with the results of our proposal at Palo Alto Networks, which received one of the highest totals to date,” said Danielle Fugere, President of As You Sow. “Our proposal highlighted shareholder and employee concern about the risk of investing hard-earned employee retirement dollars in high-carbon investments that accelerate climate change. Climate change is already costing the global economy billions of dollars, with damages growing year-on-year. And we are seeing the first climate-related financial crisis play out across the U.S. as hard hit areas in Florida, California, and other states become increasingly uninsurable due to massive climate-related storms and fires. Uninsurable homes can’t be sold, which means property values fall, tax dollars decline, and banks and other institutions take a hit. We witnessed the economic fallout of the last mortgage crisis, and this one is likely to be even more financially devastating if we don’t make a course change.”
Fifty-three percent of Palo Alto Networks’ 401(k) Plan assets are in index-based target date funds that do not integrate climate risk into their investment strategy or hold companies accountable through proxy voting for lack of Paris-aligned climate targets and action plans. This oversight carries real financial implications for plan beneficiaries, especially younger employees whose life savings are exposed to growing climate portfolio risk over a longer time horizon than older workers who access retirement savings in the shorter term.
“Employees across the U.S. are increasingly demanding that their employers offer retirement plan options that align with a climate-safe future for their retirement years,” said Andrew Behar, CEO of As You Sow. “If companies don’t respond to their employee’s requests, the future younger employees retire into will look dramatically different from the one they envision today.”
Exposing employee retirement savings to climate-related financial risk could also put company shareholders at risk. Surveys suggest that 84% of individual U.S. investors and 96% of Millennials are interested in sustainable investing, raising shareholder concern that the lack of climate-safe investment options could harm Palo Alto Network’s ability to attract and retain top talent. Earlier this year, more than 1,000 Google employees signed a petition urging their company to offer a fossil-free 401(k) plan.
In addition to employee concern, employers may face lawsuits for failing to assess climate portfolio risks in their retirement plans. As part of a prudently constructed lineup of funds and investments, Palo Alto Networks must demonstrate that it is proactively managing climate-related risks and impacts across the full range of employees’ investment horizons.
As You Sow publishes monthly report cards rating retirement plans and mutual funds as part of its Invest Your Values initiative.
About As You Sow
As You Sow is the nation’s leading shareholder representative, with a 30-year track record promoting environmental and social corporate responsibility. Its focus areas include climate change, ocean plastics, toxins in the food system, rights of nature, racial justice, and workplace diversity. Click here to view As You Sow’s shareholder resolution tracker.
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