RESOLVED: Shareholders request that Caterpillar commission an independent third-party report, at reasonable expense and excluding proprietary information, assessing the effectiveness of the company’s due diligence process in determining if its operations or customers’ use of its products contribute to violations of its Code of Conduct (CoC) and Human Rights Policy (HRP). WHEREAS: Caterpillar’s CoC commits the company to respecting human rights across global operations and its HRP is informed by the UN Guiding Principles on Business and Human Rights (UNGPs). 1 Caterpillar’s Slavery and Human Trafficking Statement indicates that slavery is “inconsistent with our Values and will not be tolerated at Caterpillar, or anywhere in our supply chain.” 2 However, investors lack transparency regarding Caterpillar’s compliance with its policies pursuant to the following: Russian aggression risks: In September, President Putin ordered a ‘partial mobilization,’ requiring organizations in Russia to assist in the conscription of eligible employees and provide material support to the war effort. Caterpillar risks involvement in mobilization efforts through its subsidiaries and distributors, including Caterpillar Eurasia, Caterpillar Tosno, and Caterpillar Distribution, which employed over 2,350 staff and generated $800 million in revenue in 2021 and continue operations in Russia. Caterpillar continues to use Russia as a supply chain route; 3 Value chain risks: In 2020, Caterpillar’s exclusive wholesaler for branded retail clothing received multiple shipments from Chinese companies involved in that government’s forced labor program in Xinjiang. 4 Equipment purchased from Caterpillar and its authorized dealers has long been reported to be used in violations of international law in Myanmar, 5 Occupied Palestinian Territory; 67 and Western Sahara; 8 Legal/reputational risks: The U.S. Government is imposing sanctions and trade controls against Russia, 9 Myanmar, 10 and China. 11 The EU and its members are passing mandatory human rights due diligence (HRDD) laws, 12 and companies are being held liable for contributions to violations of international law. 13 Investors, representing $18 trillion in assets under management, view human rights and conflict as material risks, evidenced by public statements on Ukraine, 14 Myanmar, 15 and Xinjiang 16;
1 https://www.caterpillar.com/en/company/governance/political-engagement/human-rights.html 2 https://s7d2.scene7.com/is/content/Caterpillar/CM20210622-bd91e-
6d42a#:~:text=Slavery%20and%20Human%20Trafficking%20are,training%20on%20an%20annual%20basis 3 https://www.bnnbloomberg.ca/caterpillar-still-ships-through-russia-after-halting-production-1.1737953 4 https://www.axios.com/caterpillar-xinjiang-uighur-labor-a6ec73df-b75e-4aea-ae76-cc8182ad6a3c.html 5 https://swedwatch.org/wp-content/uploads/2020/06/97_Myanmar_200610_uppslag_NY.pdf 6 https://www.hrw.org/news/2004/10/28/human-rights-watch-letter-caterpillar-inc 7 https://www.amnesty.org/en/location/middle-east-and-north-africa/israel-and-occupied-palestinian-territories/report-israeland-occupied-palestinian-territories/ 8 https://wsrw.org/en/archive/4380 9 https://www.state.gov/holding-russia-and-belarus-to-account/ 10 https://www.state.gov/burma-sanctions/ 11 https://www.state.gov/implementation-of-the-uyghur-forced-labor-prevention-act/ 12 https://www.business-humanrights.org/en/big-issues/mandatory-due-diligence/ 13 https://www.justsecurity.org/78097/corporate-criminal-liability-for-human-rights-violations-france-and-sweden-are-poisedto-take-historic-steps-forward/ 14 https://media.businesshumanrights.org/media/documents/Investor_Statement_on_the_Crisis_in_Ukraine_16_May_2022.pdf 15 https://investorsforhumanrights.org/investor-statement-myanmar-human-rights-and-business-activities-supporting-militaryjunta 16 https://investorsforhumanrights.org/sites/default/files/attachments/202103/XUAR%20Investor%20Expectations%20Statement.pdf