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October 13, 2009Mr. James W. OwensChairman and CEOCaterpillar 100 NE Adams StreetPeoria, IL 61629Dear Mr. Owens:We are writing to applaud Caterpillar for its significant achievements in corporate responsibilityand sustainability, particularly with respect to climate change. As investors, we are also writingto express our concern over the glaring contradiction between the company’s position and that of the National Association of Manufacturers (NAM) and the U.S. Chamber of Commerce(Chamber) on this critical issue.The Center for Political Accountability, a nonpartisan advocacy group promoting corporate political transparency and accountability, has highlighted this misalignment as posing risks tocompanies and their shareholders and has urged companies to take steps to address thiscontradiction, in conjunction with investors.We commend Caterpillar  for the leadership position it has taken on environmental issues such asclimate change. Your company is a member of US Climate Action Partnership (USCAP),actively supports climate legislation, and has made multiple public statements that demonstrateCaterpillar’s commitment to sustainable business.On the other hand, Caterpillar is also a member of NAM and the Chamber, trade associationsthat have played a particularly antagonistic role in climate negotiations and which hold viewscounter to those of USCAP. The Chamber has even gone so far as to propose a “Scopesmonkey”-like trial challenging the science around global warming, while the scientificcommunity has concluded that the evidence of global climate change demands a swift and urgentresponse to reduce pollution. NAM and the Chamber’s position and active voice on climate change are especiallyembarrassing for numerous members who are proactive leaders on reducing greenhouse gasesand limiting their negative impact with respect to climate change. Furthermore, while somecompanies, including Caterpillar, have articulated a business rationale for a national policy thatreduces greenhouse gas emissions, their membership in NAM/Chamber is sending a starklycontradictory message. Shareholders and the media are becoming increasingly aware of themisalignment between a company’s stated policies and positions and those of its tradeassociations. As investors we urge Caterpillar to integrate its political spending and associationmemberships with its publicly stated, forward looking policy and positions on climate change.We are pleased to see the growing number of companies that have announced their disagreementwith these trade associations. Apple, PNM Resources, Exelon and PG&E recently quit theChamber and Duke Energy withdrew its membership from NAM. Other companies, including
 
Johnson & Johnson and General Electric, have publicly stated that the Chamber does notrepresent their position on climate change. In addition, Nike resigned from the Chamber Board.We urge Caterpillar to also make its voice heard on this critical issue.There are a number of ways concerned companies can respond including:
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Withdrawing Caterpillar’s membership from the Chamber/NAM or resigning from theassociations’ boards
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Declaring in a public letter that Caterpillar does not share the basic position of theChamber/NAM on climate change and that it has informed the association of its verydifferent position
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Asking that the Chamber/NAM publicize on its website that Caterpillar does not sharethe same view on climate change
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Disclosing the portion of the company’s payments to trade associations and politicallyactive organizations that are used for political purposes
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Requesting a credit or refund of the portion of Caterpillar’s payments to theChamber/NAM that have been used to lobby on climate changeAs Caterpillar clearly understands, the time for action on climate change is now. It is critical thatcompanies such as Caterpillar take a position of industry leadership to address this game-changing problem. We hope Caterpillar will demonstrate its leadership on the climate issue bytaking urgent action to highlight your opposition to NAM and the Chamber on climate change.To follow up on this request please contact Tim Smith of Walden Asset Management attsmith@bostontrust.comor 617-726-7155 or Emily Stone of Green Century Capital Managementatestone@greencentury.comor 617-482-0800.Sincerely, Kristina Curtis Timothy SmithSenior Vice President Senior Vice PresidentGreen Century Capital Management, Inc. Walden Asset ManagementBruce FreedRob ThomasPresidentPresidentCenter for Political Accountability Social(k)
 
 Susan Vickers, RDMBruce Herbert, AIFVP Community HealthChief ExecutiveCatholic Health Care WestNewground Social InvestmentMargaret WeberJulie Fox GorteCorporate Responsibility DirectorSenior Vice PresidentBasilian Fathers of TorontoPax World Management CorpAdam KanzerJohn GonzalezManaging Director & General CounselExecutive Director Domini Social InvestmentsNorth American PassionistJPIC Office Steven HeimJames McRitchieDirector of Social Research and AdvocacyPublisher Boston Common Asset ManagementCorporate GovernanceSanford LewisTimothy BrennanAttorney Treasurer & CFOStrategic Counsel onUnitarian Universalist AssociationCorporate AccountabilityConrad MackerronRaymond C. Offenheiser Director, Corporate Social Responsibility PresidentAs You SowOxfam America
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