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Task Force on Climate-related
Financial Disclosure Response

Disclose the organization’s governance around climate-related risks and opportunities.

a) Describe the board’s oversight of climate-related risks and opportunities.

The General Motors Board of Directors is committed to overseeing the company’s integration of environmental, social and governance (ESG) principles throughout the enterprise. The Board is committed to elevating GM’s leadership profile and reputation among investors, policymakers and others on ESG issues and practices and believes GM has a unique opportunity to address these important issues.

The Board’s activities in ESG oversight include an annual multiday session devoted to discussing, debating and validating management’s overall strategy. In the past year, these strategic reviews and discussions have included the workplace safety during the pandemic, capital allocation, corporate purpose, the accelerated electrification of the company’s portfolio of vehicles and related workforce issues, the continued development and execution of autonomous vehicles, fuel economy regulation, vehicle safety, international reorganizations and various alternative business scenarios.

Governance and Corporate Responsibility Committee

ESG oversight includes frequent ESG strategic discussions by the Board’s Governance and Corporate Responsibility Committee (GCRC). The GCRC assists the Board in its oversight of the company’s governance structures, programs and policies. This committee brings to the attention of the Board and management, as appropriate, current and emerging global political, social and policy issues that may affect the business operations, profitability or public image or reputation of the company. The GCRC also oversees specific functions of the company, as appropriate. Company functions reviewed by the GCRC include Legal, Global Public Policy and Sustainability, including climate change. The GCRC has recently reviewed the company’s ESG strategy, with a broader focus on corporate purpose and culture and how those attributes align with the company’s corporate strategy.

Risk and Cybersecurity Committee

The Risk and Cybersecurity Committee of the Board is responsible for overseeing the company’s management of enterprise-level risks. The Risk and Cybersecurity Committee receives regular reports from the Strategic Risk Management (SRM) team, led by an executive director who has dedicated resources, risk management responsibility and is supported by the Risk Advisory Council (RAC). The RAC is an executive-level body with delegates from each business unit and function tasked with championing risk management practices and integrating them into their functional or regional business units. All top risks, including climate-related risks, such as increased and more stringent greenhouse gas (GHG) emission regulations, have approved mitigation plans and are reviewed regularly by Senior Leadership Team (SLT) and the Board.

Compensation Committee

The Compensation Committee considers ESG performance when making compensation determinations for certain members of management. The Compensation Committee factors ESG performance related to strategic goals, which account for 25% of the short-term incentive plan for each named executive officer. Linking total compensation to the achievement of these individual measures increases focus on efficiency and performance across the business for our sustainability initiatives. Please see GM’s 2021 Proxy Statement, beginning on page 41, for further discussion of individual performance results that had a positive impact on ESG measures.

b) Describe management’s role in assessing and managing climate related risks and opportunities.

Sustainability Office

Management of climate-related risks and opportunities ultimately resides with the Chief Executive Officer, who leads our SLT. This group includes the Executive Vice President of Global Manufacturing to whom our Chief Sustainability Officer (CSO) reports. The CSO oversees the Sustainability Office, which works cross functionally to:

  • ensure responsible consumption of materials and production of vehicles;
  • lead the strategic design and implementation of our electric vehicle (EV) infrastructure; and
  • engage both internal and external stakeholders to realize a zero emissions future.

Our Sustainability Office is using a cross-functional “team of teams” approach to ensure that areas across the enterprise have accountability for their respective functions in accelerating the company’s zero emissions future. Within each functional area, a single leadership point represents sustainability objectives and priorities, as well as owning sustainability goals and metrics. This also ensures that sustainable attributes are incorporated into every vehicle across GM’s product portfolio, helping to bridge between an evolving EV portfolio and an internal combustion engine (ICE) portfolio. Additionally the Sustainability Office solicits feedback from internal and external advisory groups related to climate change issues.

Manufacturing Leadership Teams

While the majority of GM’s carbon emissions result from the use of our vehicles, a category of Scope 3 emissions, the scale of our manufacturing operations also presents significant opportunities for emissions reduction.

On a monthly basis, GM’s progress toward public energy, emissions and water goals, all of which are climate-related, are reviewed by the Manufacturing Leadership Team (MLT). If targets are not meeting our defined pathway, countermeasures are developed at the plant level and reviewed by the MLT.

Local Management

Asset-level risks have mitigation plans that are the responsibility of local management. Exposure to and experience with catastrophic risk or losses from climate change or other natural events are continuously analyzed and reviewed for ongoing operations and when evaluating new sites and selecting suppliers.

Disclose the actual and potential impacts of climate-related risks and opportunities on the organization’s businesses, strategy and financial planning.

a) Describe the climate-related risks and opportunities the organization has identified over the short, medium and long term.

General Motors takes the challenge of climate change seriously, which is why we have announced plans to become carbon neutral in our global products and operations by 2040. This is a driving force behind our vision of a future with zero crashes, zero emissions and zero congestion. We have consistently and publicly advocated for climate action and awareness, as well as policies putting a value on carbon. Our global commitment to an all-electric, zero-emissions future is unwavering, regardless of the prevailing vehicle emissions standards in any region in which we operate. In the U.S., we support modernizing the standards and creating one national program working with California and all stakeholders.

b) Describe the impact of climate-related risks and opportunities on the organization’s businesses, strategy and financial planning.

Below we have identified climate-related risks and opportunities with potential impact to our business over short (1–3 years), medium (3–5 years) and long-term (5+ years) time horizons and our approach to each. Per TCFD guidelines, risks are categorized as transition risks or physical risks. Transition risks result from a global transition to a low-carbon and climate-resilient economy, and physical risks result from extreme weather events and increasing average global mean temperatures.

Transition Risks

Risk Type

Policy and legal: Mandates on and regulation of existing products and services

Description

The California Air Resource Board’s latest requirements include increasing zero-emissions vehicles (ZEVs) offered for sale in California and ZEV volumes for 2018 model year and later. Quebec adopted ZEV requirements starting with 2018 model year; other jurisdictions may follow. The Clean Air Act permits states with air quality compliance issues to adopt California emission standards in lieu of federal requirements; 13 states use these standards, 10 of which have adopted ZEV requirements.

Impact

  • Time horizon: Medium-term
  • Likelihood: Likely
  • Magnitude of impact: Medium-high
  • Potential financial impact figure: $23 million
  • Cost of management (mitigation): $7.8 million

Approach

We’ve announced our intent to allocate more than $27 billion in capital and engineering resources to EV and autonomous vehicle (AV) programs between 2020 and 2025. By mid-decade, we aim to sell more than a million EVs per year globally. We believe our flexibility and engineering focus will drive the scale required to accelerate our path to zero emissions in a profitable and efficient way.

Risk Type

Market: Changing customer behavior

Description

Changing consumer behavior due to fuel pricing volatility, tax incentives and preference for more fuel-efficient vehicles could weaken the demand for our higher-margin full-size pickup trucks and sport utility vehicles. This could reduce our market share in affected markets, decrease profitability and have a material adverse effect on our business if we are unable to offer alternatives that are of interest to our customers.

Impact

  • Time horizon: Medium-term
  • Likelihood: More likely than not
  • Magnitude of impact: Medium
  • Potential financial impact figure: $97 million
  • Cost of management (mitigation): $6.2 billion

Approach

Continuous innovation and advanced technology development are key to keeping up with changing consumer behavior. One way GM achieves this is through our global network of R&D labs around the world, as well as through active collaboration with academia, suppliers and startups to develop new technologies which improve fuel economy, reduce emissions, enhance vehicle safety, reduce vehicle mass, support the expansion of our EV offerings and accelerate the advent of the autonomous vehicle.

Physical Risks

Risk Type

Chronic: Changes in precipitation patterns and extreme variability in weather patterns

Description

Increases in the frequency of drought conditions can further depress water availability for production in water-stressed areas. GM has production facilities in Mexico, an area hard hit by drought in recent years, and there is a risk that increases in the frequency of such events could disrupt production due to lack of water availability. Mexico accounts for approximately 12% of GM’s global production.

Impact

  • Time horizon: Short-term
  • Likelihood: About as likely as not
  • Magnitude of impact: Medium-to-high
  • Potential financial impact figure: $97 million
  • Cost of management (mitigation): $20.2 million

Approach

GM has integrated water management into our annual business planning process and has set a new target to reduce the water intensity of our operations by 35% by 2035 compared to a 2010 baseline. Further, we also have signed the CEO Water Mandate—a UN Global Compact Initiative—joining other global business leaders to address key challenges around water security and further aligning the UN Sustainable Development Goals.

Water usage is managed on a local basis, with each facility working toward its own targets for year-over-year improvement. Innovative approaches have allowed facilities to continue production without disruptions, even in water-stressed areas. At our San Luis Potosí Assembly plant in Mexico, GM uses a Zero Liquid Discharge system to minimize the reliance on well water withdrawal. The system purifies and transforms wastewater into reusable water for the facility’s paint and machining processes, as well as irrigation.

Climate-related Opportunities

Opportunity Type

Products and services: Development and/or expansion of low-emission goods and services

Description

Today’s transportation revolution is transforming how people move, an effect similar to the debut of the automobile more than a century ago. The technologies leading this transformation of personal mobility will be autonomous, electric, connected and, in many cases, shared. We are focused on initiatives that capitalize on these new technologies and business models to create products, offer services and advocate for policy that looks at transportation as a system and mobility as a service.

Impact

  • Time horizon: Short-term
  • Likelihood: Likely
  • Magnitude of impact: Medium-to-high
  • Strategy

Our global commitment to realize an all-electric, zero-emissions future—from battery chemistry and architecture to safety validation and infrastructure—requires unprecedented investment in people and resources. This is why we’ve announced our intent to allocate more than $27 billion in capital and engineering resources to EV and autonomous vehicle (AV) programs between 2020 and 2025. By mid-decade, our intent is to sell more than a million EVs per year globally. Further, we aspire to eliminate tailpipe emissions from new light-duty vehicles by 2035.

GM’s flexibility and engineering focus will drive the scale required to accelerate our path to zero emissions in a profitable and efficient way. In addition, we are leveraging existing assets, such as production tools and body and paint shops, so that economies of scale can be realized with less capital and further position the first generation of these products for profitability.

Opportunity Type

Resource efficiency: Increased efficiency of facilities

Description

While the majority of the emissions that we are trying to reduce result from the use of our vehicles, the scale of our manufacturing operations also presents significant opportunities for energy efficiency improvement.

Impact

  • Time horizon: Current
  • Likelihood: Virtually certain
  • Magnitude of impact: Medium-low

Renewable energy

Just as we are accelerating our all-EV future, we also are accelerating our renewable energy commitments. In 2016, GM committed to sourcing 100% of our global electricity demand from renewable sources by 2050. In early 2021, in response to the need to accelerate efforts to address climate change, we pulled forward our 100% global renewable energy commitment to 2035 with interim goals of achieving 100% of U.S. sites by 2030. At the end of 2020, we were sourcing 21% of global electricity needs from renewable energy sources, making us the 10th-largest off-taker of renewable energy in the world.

Energy conservation

By reducing energy use overall, there will be fewer electricity needs to be covered by renewable sources. GM uses an energy management system (EMS) and performance contracts to achieve energy-reduction goals. In 2020, more than 90% of our U.S. manufacturing footprint implemented the U.S. Department of Energy’s (DOE) 50001 Ready program. This program is an application tool through which 25 tasks are measured to demonstrate an effective energy management system. We plan to expand this program to all of our manufacturing facilities globally in order to continuously monitor and improve our EMS.

GM also uses a variety of Energy Star initiatives as a framework for charting our progress in building energy efficiency. Energy Star’s Building Portfolio Manager (BPM) allows us to benchmark our progress and make continuous improvements. BPM integrates with our utility bill management system, sending an automated monthly analysis of building scores to evaluate building performance.

c) Describe the potential impact of different scenarios, including a 2°C scenario, on the organization’s businesses, strategy and financial planning.

Climate change has been incorporated into our enterprise risk management framework. This designation ensures that these issues are a part of our decision-making processes.

We have utilized scenario-planning as a tool to help us assess climate-related risks in alignment with the guidance developed by TCFD. That planning has been based on a key assumption that the world is on a path to limit emissions by 2030 to the extent necessary to limit any global temperature increase to 2 degrees Celsius.

Our goal has been to develop an understanding of a range of different world scenarios; identify risks, opportunities and success factors for GM; and make recommendations for GM to analyze, prepare, adapt and act. In the process, we modeled the impact of different scenarios and asked questions such as:

  • “What types of regulation will govern the sector?”
  • “What will cities look like?”
  • “What are the mobility limitations of dense urban communities?” and
  • “What sort of transportation modes and services, such as ride share, will be most accepted by consumers?”

All of our scenarios shared common themes. Within the vehicle market, for example, it was assumed that new passenger vehicles would be required to make faster and greater adjustments than other users of energy and that there would be significant changes in the vehicle ownership paradigm, as well as a decline in the proportion of single-person vehicle miles. Outside the transportation sector, we envisioned significant changes and investments in infrastructure, power grids and power sources; penalties and costs associated with manufacturing and supply chain emissions; and increased accountability in areas such as commodity lifecycles.

Our consideration of these scenarios has helped us understand and clarify risks and highlight opportunities, many of which are influencing our strategy today. Some examples include:

Risks/Opportunity Recent Strategy Developments
Adoption of new business models Continued investment in Cruise, the self-driving vehicle company in which we are majority owners; and the development of the Cruise Origin, which exemplifies our vision for the future of mobility: electric.
Response to new energy vehicle regulations in China Through our SAIC-GM joint venture, we have committed to 40% of new vehicles introduced in China over the next five years will be EVs.
Focusing on new technologies by shifting capital resources and talent toward vehicle electrification programs We are allocating more than $27 billion in capital and engineering resources to EV and AV programs between 2020 and 2025. These investments will allow GM to offer 30 EVs globally by 2025—and 40% of U.S. entries will be battery electric vehicles by that time.
Prioritizing renewable power sources We have accelerated our goal to source electricity from 100% global renewable energy sources from 2050 to 2035, with the interim goal of achieving 100% of U.S. sites by 2030.

In summary, scenario planning processes are an example of how GM monitors the real world to understand how assumptions evolve and corresponding changes to strategy are made.

Disclose how the organization identifies, assesses and manages climate-related risks.

a) Describe the organization’s processes for identifying and assessing climate-related risks.

b) Describe the organization’s processes for managing climate related risks.

c) Describe how processes for identifying, assessing and managing climate-related risks are integrated into the organization’s overall risk management.

As part of our comprehensive climate change strategy, we identify and monitor climate-related risks on a regular basis across our business. The need for this constant process reflects the volatility of risk factors and dynamics that can quickly change scenarios. By institutionalizing climate change risks as part of our enterprise risk management function, we believe GM is better positioned to anticipate, detect and, ultimately, plan around these changes.

The Role of the Board and Senior Management

The Board has the overall responsibility for risk oversight, with a focus on the most significant risks facing the company, including climate change. While GM does not follow the precautionary approach, it does have a comprehensive risk management plan in place. Our Board implements its risk oversight function both as a whole and through delegation to Board Committees. Each of the Board Committees is responsible for oversight of risk management practices for categories of risks relevant to its functions, with the GCRC being responsible for risks related to the sustainability of our operations and products.

The process and terminology in place for assessing relative significance of all identified risks, including climate-related risks such as increased and more stringent GHG emission regulations, is as follows:

  • Risks and opportunities are categorized based on frequency, velocity and impact on financials, operations, reputation, etc.
    • All top risks have approved mitigation plans and are reviewed regularly by the SLT and the Board.
    • All other risks have either approved mitigation plans and are reviewed at least once a year by the SLT, or after being fully analyzed are put on a “watch list” and are monitored by the risk officer and their respective SLT member.

For additional detail on the critical role our Board’s Committees and senior management play in the execution of risk management, please see the Governance section of the 2020 Sustainability Report.

Environmental Governance

GM reduces operational risks through sound environmental management. We measure and manage natural resources use at all manufacturing locations, engineering centers, parts distribution centers and proving ground sites around the world. These facilities vary in function, geography, size and surrounding natural environments, which gives rise to varying concerns such as resources scarcity, dozens of different regulatory requirements and different levels of environmental quality. And, although GM-owned and -operated facilities have their own operating plans depending on their location, all function under a common Environmental Policy which provides an effective foundation for environmental stewardship. In addition to GM’s Environmental Policy, which provides guidelines to help minimize the impact of our activities, products and services on the environment, GM manages climate-related risks through:

  • Setting Environmental Commitments which encourage environmental consciousness in both daily conduct and in the planning of future products and programs.
  • Implementing an Environmental Management System at all manufacturing facilities that GM owns and operates, and a majority of our nonmanufacturing sites around the world.
  • Complying with applicable environmental laws and regulations globally.
  • Monitoring GM’s performance according to GM’s own Environmental Performance Criteria, which are universal corporate performance requirements designed to protect human health and the environment in accordance with the GM Environmental Policy.
  • Providing strategic training and guidance to our environmental professionals to help them keep pace with evolving environmental issues and best practices that could have application worldwide.
  • Publicly disclosing environmental performance through reporting frameworks such as GRI, SASB and CDP, in addition to TCFD. The reporting process not only helps us manage and measure our progress, but also helps us to engage with both internal and external stakeholders around the world.

Supply Chain Risks

GM is working diligently to further integrate environmental sustainability into all aspects of our supply chain functions. A cross-enterprise Global Purchasing and Supply Chain (GPSC) Sustainability Team is supporting this effort through their focus on:

  • Supply chain carbon footprint reduction—Concentrating on Scope 3 emissions to include:
    • Emissions disclosure—Increasing visibility and supplier engagement in carbon footprint reduction through tracking of CDP engagement by select Tier I suppliers.
    • Sustainable logistics—Increasing shipping container packing density, route efficiency monitoring, supplier emissions reduction and alternative fuels.

In 2020, workstreams included holding several virtual symposia for suppliers. One explored sustainability through innovation and attracted more than 650 participants from 18 countries, while others focused on packaging and energy. The latter was followed by ongoing monthly webinars on a wide variety of energy management, water management, conservation and goal-setting topics.

Also in 2020, GPSC surpassed its goal to increase participation among selected suppliers in its annual CDP Supply Chain Initiative. A multipronged effort to engage targeted suppliers resulted in a 96% participation rate, well ahead of GPSC’s 90% goal.

Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities.

a) Disclose the metrics used by the organization to assess climate-related risks and opportunities in line with its strategy and risk management process.

b) Describe the targets used by the organization to manage climate-related risks and opportunities and performance against targets.

Sustainability Office leaders are charged with innovating and advocating for the acceleration of our zero crashes, zero emissions and zero congestion vision. To manage and measure progress over the next decade and beyond, the team will work against a new comprehensive set of enterprise goals that includes:

  • Achieving carbon neutrality in global products and operations by 2040 and aligned with SBTi
  • Sourcing 100% renewable electricity globally by 2035 and 100% in the U.S. by 2030
  • Reducing operational energy intensity by 2030 against a 2010 baseline
  • Reducing operational water intensity by 2035 against a 2010 baseline
  • Achieving greater than 90% Zero Waste globally by 2025
  • Ensuring at least 50% sustainable material content in vehicles by 2030
  • Making packaging 100% returnable or made from majority sustainable content and zero waste by 2030
  • Enrolling 100% of our “targeted Tier 1 supplies” in GM’s Supplier Sustainability Program.

A key consideration in developing these enterprise-level goals has been to ensure all impacts of the business—both operational and product—are managed and measured to support our zero emissions future.

These goals build on the progress that has been made over the past decade through our 2020 Manufacturing Commitments. Introduced in 2010, these commitments focused on GM’s extensive manufacturing footprint around the world and have served to significantly reduce the impact of our operations. Progress includes meeting our initial goal to increase renewable energy to 125 MW four years early and continuing to grow renewable energy capacity to greater than 1,061 MW as of the end of 2020. In the past 10 years, we also have reduced energy intensity by 11%; water intensity by 13% and waste intensity by 31%—all against the 2010 baseline.

c) Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse gas (GHG) emissions and the related risks.

2020 Emissions Performance

2020 Emissions Metric Tons CO2e1
Scope 1 1,214,1242
Scope 2 3,087,8163
Scope 3 259,731,2203

For a comprehensive summary of the environmental metrics related to GM’s products and operations, please see our ESG Data Center. For emissions methodology, please see our CDP Climate Change response.

1 Reporting is based on GHG Protocol, and the source of emission factors is regulatory or IPCC.

2 Calculation includes CO2, CH4 and N20.

3 Calculation includes CO2, CH4, N20, HFCs, PFCs, SF6 and NF3.