Page 98 - Martin Marietta - 2023 Proxy Statement

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

conversations, we have made important additional GHG-related commitments that we believe are in the best interests of
the Company and our shareholders more broadly, including the proponent.

Management has also engaged with numerous other shareholders and interested stakeholders on questions around
environmental stewardship, GHG reductions and other sustainability issues over the past few years with many of these
calls occurring during the last year, and we believe based on those discussions that our shareholders are generally satisfied
with the Company’s own current ambitious plans for addressing these issues. As discussed further below and in our
Sustainability Report, management reports on these matters to the Board, which meets regularly to review our
sustainability goals, including with respect to GHG reductions. Simply put, these are issues and risks we are giving
significant attention and subjecting to rigorous review from the top down.

We have made several important commitments in response to this engagement. These include expanding our previously-
announced Net Zero by 2050 target for our Scope 2 emissions (indirect emissions from our energy purchases) to a Net
Zero ambition for our Scope 1 emissions (direct emissions from our operations), across all our product lines, which we will
announce in our forthcoming 2022 Sustainability Report. The proponent acknowledged the importance of this
commitment and stated that our willingness to make this commitment is “critical” to them. We also have committed to
the proponent that we will consider potential opportunities to expand the coverage of our existing Scope 1 and 2
reduction targets for 2030 and continue to evaluate a process for undertaking the measurement of our Scope 3 emissions.
Advancing our efforts in both of these areas are necessary to being able to set and verify reduction targets under the
Science Based Target initiative (SBTi) framework, as requested by the Proposal. The proponent has expressly acknowledged
the importance of the above commitments in its communications to us.

Despite the efforts and achievements described above and our track record of attention to these issues, the proponent has
repeatedly failed both to credit our strong commitment to continuously advancing our efforts relating to GHG emissions
reductions or to appreciate key aspects of our business, including dramatic differences between U.S. and non-U.S. product
specifications in the cement industry and emission calculations methodology.

Proponent’s request to issue science-based targets within one year is unnecessary; the commitments described above are
requisite first steps in that process and, thus, voting against the Proposal would not delay or prohibit our ability to set such
targets in the future. Under the SBTi framework requirements, if we were to commit to setting science-based targets, we
would have two years to develop, submit and verify such standards (rather than one year, as requested by the Proposal).
Given the progress we have already made and that we are committed to continue meeting the challenges of reducing
emissions, it would impose a needless constraint to commit now to adopt the goals and fixed timetable sought by the
Proposal.

Moreover, committing now to science-based targets would likely require us to measure and report Scope 3 emissions well
within that time frame, which is unrealistic, even given the significant attention we are already dedicating to GHG matters.
While we are committed to advancing our efforts to meet the challenges of GHG emissions reduction, our approach is
appropriately thoughtful and deliberate, which includes balancing the needs of our businesses, employees, investors and
other stakeholders and understanding the implications on our operations and our ability to meet any such commitments. It
also is commonly acknowledged (including by the proponent) that E.U. cement companies that have set long-term science-
based target are relying on the advancement of carbon capture technology that remains unproven on a commercial scale.
We believe that setting targets that require substantial future technological achievements outside our control could create
reputational risk and potential harm to our business and shareholders should such advancements fail to materialize. It is
not in the interest of the Company or our shareholders for us to engage in greenwashing and make commitments
dependent on speculative developments while we are continuing to advance our more rigorous processes. These same
companies have also set near term targets that rely on reducing clinker factor in their cement by product blending and
other favorable regulatory advantages currently unavailable to U.S. operators. In the absence of similar regulatory
opportunities in the U.S., we have achieved GHG reductions through significant investment in our plants and other
operational improvements.

Our GHG Approach and Profile
Our approach to addressing GHG emissions in our operations starts with the oversight of our Board and management. The
Board considers sustainability issues an integral part of its business oversight and takes an active role in determining Martin

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