Page 97 - Martin Marietta - 2023 Proxy Statement

/ PROPOSAL 5: ADVISORY VOTE ON A SHAREHOLDER PROPOSAL REGARDING GREENHOUSE GAS EMISSIONS REDUCTION TARGETS

achieve them. The targets should cover the Company’s full range of operational and supply chain emissions. In addition,
these targets should omit proprietary and personal information.

SUPPORTING STATEMENT:
In assessing targets, we recommend, at Board’s discretion:

• Consideration of approaches used by advisory groups, such as the one developed by the SBTi; 4
• Development of 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, and other measures deemed appropriate
by management.

BOARD RECOMMENDATION

The Board recommends you vote AGAINST this proposal for the following reasons:
Martin Marietta is committed to greenhouse gas (GHG) reductions in both the short and long term, including meeting our
previously established GHG reduction targets and goals, and we have been actively engaged with the proponent and many
of our shareholders about these issues over the past few years. We take these conversations seriously and have engaged
with the proponent and many other shareholders at the highest level within the Company including our Chairman and
CEO, our Executive Vice President and General Counsel and our Chief Financial Officer among others. We share the
concern for companies doing their part to combat climate change that led to the proponent’s proposal (the “Proposal”),
but the Proposal is unworkable as drafted, it asks us to commit now to steps we are still evaluating and working toward,
and the Board urges you to vote against it while it restates our strong and unequivocal commitment to our common goals.

The Proposal requests that we align our reduction targets within a year with certain science-based frameworks, which
would include measuring, reporting and likely setting reduction targets for so-called Scope 3 emissions. Scope 3 emissions
are those from operations controlled entirely by third parties (such as our suppliers), both up and down our value chain.
Measuring such emissions is a significant and complex undertaking, and the reporting of such emissions is the subject of
significant public debate, including in still-pending rulemaking by the U.S. Securities and Exchange Commission. Many
companies do not currently report Scope 3 emissions, including many of our aggregates peers, and we believe that
adopting an approach to collecting and reporting Scope 3 emissions while these rules remain pending is imprudent.
Unfortunately, one of the primary reasons for the proponent’s submitting the Proposal is a misclassification of our
Company in a peer group in which it does not belong. Martin Marietta is overwhelmingly an aggregates (crushed stone,
sand and gravel) business from the perspective of our revenue, profitability and the number of facilities. The proponent
insists on identifying us as a cement company due to the ownership of two cement plants in Texas. In doing so, the
proponent also advised us it is pursuing strict GHG remedies against us in a mechanical, rather than thoughtful approach
out of proportion to our climate impact. Given the unavoidable process emissions inherent to cement production, it is
commonly acknowledged by independent standards-setting bodies and others that science-based reduction targets for
cement plants would require technologies that are still unproven at a commercial scale and may remain so for years. If
adopted, the Proposal would box the Company into a commitment that may not be achievable or a situation where it may
not even be possible to “prove” that the requisite conditions have been met.

For these and other reasons described in greater detail below, the Proposal is unnecessary and unrealistic, and
we urge you to vote against it.

Our Engagement and Response
Due to the importance of the subject matter, we have conducted substantial engagement with many investors, including
the proponent, regarding our GHG activities, which the proponent acknowledged in its correspondence has been
engagement at the “Company’s highest levels.” Over the past year, we have welcomed numerous calls and other
communications with the proponent with respect to the matters addressed in the Proposal. In response to these
4 https://sciencebasedtargets.org/resources/files/SBTi-Cement-Guidance.pdf

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