UPDATE June 9, 8:25 p.m. EDT: Click here to read more about the drive to get Tesla Motors to stop offering leather interior options during the company's fifth annual shareholder meeting.
Original story begins here:
Tesla Motors has built its business around sustainable transport that would reduce the world’s carbon emissions that all but diehard skeptics and energy-industry backed lawmakers agree play a pivotal role in global warming. But two activist shareholders are calling on company investors to demand Tesla phase out leather interior options, pointing to the global-warming emissions caused by livestock farming. They want the Palo Alto-based maker of the Model S luxury electric car to use instead synthetic alternatives like the ones offered by Mercedes-Benz and Lexus.
“Reducing these emissions is at its core and they’re doing incredible work creating this huge sustainable energy industry. But the biggest problem with greenhouse gas is from livestock, not transport,” said Tesla shareholder Mark Peters.
Peters, an airline pilot, and his wife, Elizabeth, a yoga instructor and dental hygienist, are expected to travel to Mountain View, California, to attend Tesla’s annual shareholder meeting June 9, which was announced by the company Wednesday. The couple from the Fort Worth suburb of Hurst, Texas, became so enamored by the Model S that they bought shares in the company, which afforded them the right to lobby for their proposal to appear on the company’s annual proxy statement -- a document that allows shareholders to make informed decisions on issues that are brought up at a company’s annual meeting.
These votes typically involve appointments to boards of directors, matters regarding executive compensation packages or, in this case, a proposal to remove animal-sourced products from Tesla’s supply chain.
“We spent a lot of time doing this shareholder resolution, many, many hours over many days, which turned into months,” Peters said.
Elizabeth and Mark will be given three minutes apiece during the annual meeting to sell their idea to remove leather from all new Tesla cars by 2019, and for Tesla to become the first “cruelty-free, premium brand” in the automotive industry. Mark admits success is a long shot. Even if it were a binding vote, shareholders typically support the recommendations from the board. Tesla leaned against the proposal in the proxy statement filed Wednesday, advising shareholders to vote against it.
“Tesla’s mission when it was created more than a decade ago was the same as it is today: to accelerate the advent of sustainable transport by bringing compelling and increasingly affordable electric cars to market,” the company said in its proxy statement. “Achieving this mission requires that we prioritize our efforts. In some cases, this means using existing materials to meet consumer expectations, where exploring alternatives would impede or delay us.”
Still, Mark said he hoped the measure would be embraced by the company’s stakeholders, or at least help raise awareness of the issue. A 2006 report from the Food and Agricultural Organization of the United Nations said livestock farming makes up 18 percent of all greenhouse gas emissions.
“This is an elephant in the room,” Mark said about Tesla’s anti-emission mission. He said Tesla could easily adopt synthetic soft-touch materials, like MB-Tex used by Mercedes-Benz or the NuLuxe material that garnishes Lexus vehicles. These synthetics have received high marks for their quality, but cost more than treated and tanned cow skin.
Leather has been used in automobiles for about as long as motorized transport has existed. But since the wide adoption of synthetic fibers, leather had evolved into a premium option that invokes earthy, luxury tastes. In the 1970s, Chrysler famously recruited actor Ricardo Montalbán to sell its Cordoba sedan’s “soft Corinthian leather.” Today, Tesla offers leather trim and seats in two $3,000 option packages.
Tesla shareholders will also decide June 9 whether to authorize PricewaterhouseCoopers LLP as Tesla’s independent registered public accounting firm for the year and will also decide whether or not to re-elect Antonio J. Gracias and Kimball Musk (Tesla CEO Elon Musk’s brother) to the company’s board of directors.