Mosaic shareholders strike down proposal for enhanced ESG reporting

The Mosaic Co. shareholders have voted against a proposal that would require executives to set a timeline for reducing and eventually eliminating greenhouse gas emissions from all significant portions of its business.

Around 65% of Mosaic's 290 million voting shares were cast against the proposal submitted by San Francisco-based Handlery Hotels Inc. for a vote at Mosaic's annual shareholder meeting. Handlery's proposal is the first climate-related request Mosaic's board has received from a shareholder.

The Tampa-based global fertilizer giant has committed to reducing emissions from certain portions of its operations by 2040, but Handlery said that initiative doesn't go far enough. Its proposal would require Mosaic to establish a "climate transition plan" to reduce emissions across all segments of its business, or Scope 3 value-chain emissions, a category that includes processing and consumption of a company's products.

For Mosaic, one of the largest global fertilizer producers, Scope 3 emissions comprise roughly 69% of its total carbon footprint, according to the Climate Disclosure Project. The phosphate mining giant dominates the U.S. fertilizer market and accounts for nearly three-quarters of domestic production, according to self-reported figures from the company.

Ultimately, Handlery's proposal would require Mosaic to commit to the Paris Climate Agreement's goal to reach net zero emissions by 2050.

The company's board of directors urged shareholders to vote against the proposal, saying Mosaic can't commit to targets due to the absence of scientifically informed methods for measuring emissions in the chemical and nitrogen fertilizer sectors, according to proxy materials filed with the U.S. Securities and Exchange Commission.

A sector-specific approach to creating targets would recognize "the inherent differences among sectors," the board said. "We feel strongly that our decision to issue Paris-aligned Scope 3 targets must be rooted in sector-based guidance and the realities of our complex business."

Members of senior leadership met with shareholders throughout 2022 to discuss Mosaic's environmental, social and governance, or ESG program, and better understand their issues and perspectives on the company, the board said.

"The outreach was well-received by those stockholders and, although no specific concerns were raised, it provided a constructive dialogue," the board said.

Mosaic Co. (NYSE: MOS) is the second-largest public company in Tampa Bay, with $19 billion in annual revenue last year and 12,500 employees.