At the 2025 annual shareholder meeting of United Parcel Service, Inc. (UPS), serious concerns were raised about the company’s voluntary climate commitments and the legal and reputational risks they may pose. The National Center for Public Policy Research’s Free Enterprise Project (FEP) presented Proposal 5, urging UPS to assess and report on the risks tied to its carbon-reduction promises. This move stems from growing scrutiny by the U.S. Securities and Exchange Commission (SEC) over deceptive environmental reporting, commonly known as greenwashing.

The proposal calls for transparency around UPS’s Environmental, Social, and Governance (ESG) goals, specifically its pledges to reduce Scope 1, 2, and 3 greenhouse gas (GHG) emissions. FEP argues that while UPS has made ambitious climate claims, it has failed to report on the technological and financial feasibility of achieving net zero emissions. This omission could expose the company to SEC enforcement actions, similar to those taken against other corporations found guilty of misrepresenting their ESG efforts.

“Shareholders must protect our assets against potentially unfulfillable ESG promises,” FEP emphasized in its supporting statement. It warns that voluntary climate commitments, without a clear path to fulfillment, introduce unnecessary business risk.

At the meeting, FEP Executive Director Stefan Padfield challenged UPS’s opposition to the proposal. While the company claimed it already discloses the relevant risks, Padfield questioned why UPS had not excluded the proposal on the grounds that it had been "substantially implemented," a standard SEC exemption. He also criticized the company for failing to provide shareholders with direct citations to the claimed disclosures.

“If UPS has indeed already shared all the information requested by this proposal, then implementing the proposal will be essentially costless,” Padfield noted. “On the other hand, if UPS has not provided the requested information, shareholders deserve to get it.”

FEP is urging shareholders to vote YES on Proposal 5, which it says is a crucial step toward corporate accountability and risk mitigation. The group has also published a Proxy Navigator voting guide, recommending a vote against the entire board of directors and abstentions on several other proposals, including executive compensation and auditor ratification.

With the SEC increasing oversight on ESG-related disclosures, companies like UPS may find themselves under pressure to support their climate claims with evidence or face allegations of greenwashing. For shareholders, the message is clear: transparency isn’t just ethical, it’s essential.

For more interesting and relevant news, follow our Regulators News.