<SEC-DOCUMENT>0001104659-23-063448.txt : 20230523
<SEC-HEADER>0001104659-23-063448.hdr.sgml : 20230523
<ACCEPTANCE-DATETIME>20230523091505
ACCESSION NUMBER:		0001104659-23-063448
CONFORMED SUBMISSION TYPE:	DEFA14A
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20230523
DATE AS OF CHANGE:		20230523

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CALIFORNIA WATER SERVICE GROUP
		CENTRAL INDEX KEY:			0001035201
		STANDARD INDUSTRIAL CLASSIFICATION:	WATER SUPPLY [4941]
		IRS NUMBER:				770448994
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		DEFA14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-13883
		FILM NUMBER:		23946703

	BUSINESS ADDRESS:	
		STREET 1:		1720 N FIRST ST
		STREET 2:		C/O CALIFORNIA WATER SERVICE CO
		CITY:			SAN JOSE
		STATE:			CA
		ZIP:			95112
		BUSINESS PHONE:		4083678200

	MAIL ADDRESS:	
		STREET 1:		1720 FIRST ST
		STREET 2:		C/O CALIFORNIA WATER SERVICE CO
		CITY:			SAN JOSE
		STATE:			CA
		ZIP:			95112
</SEC-HEADER>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>UNITED STATES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>SECURITIES AND EXCHANGE COMMISSION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Washington, D.C. 20549</B></P>

<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>SCHEDULE 14A</B></P>

<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">Proxy Statement Pursuant to Section&nbsp;14(a)&nbsp;of</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">the Securities Exchange Act of 1934 (Amendment
No.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;)</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Filed by the Registrant <FONT STYLE="font-family: Wingdings">&#120;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Filed by a Party other than the Registrant <FONT STYLE="font-family: Wingdings">&#168;</FONT></P>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&#168;</FONT></TD><TD>Preliminary Proxy Statement</TD></TR></TABLE>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&#168;</FONT></TD><TD>Definitive Proxy Statement</TD></TR></TABLE>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&#120;</FONT></TD><TD>Definitive Additional Materials</TD></TR></TABLE>

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<P STYLE="border-bottom: Black 1pt solid; font: 14pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>California Water Service Group</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Name of Registrant as Specified In Its Charter)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="border-top: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Name of Person(s)&nbsp;Filing Proxy Statement,
if other than the Registrant)</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Payment of Filing Fee (Check all boxes that apply):</P>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&#168;</FONT></TD><TD>Fee computed on table in exhibit required by Item 25(b)&nbsp;per Exchange Act Rules&nbsp;14a-6(i)(1)&nbsp;and 0-11</TD></TR></TABLE>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Dear California Water Service Group Stockholders:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">California Water Service Group (Group) urges you to vote against <FONT>Proposal
No.&nbsp;6 on your proxy for the 2023 Annual Meeting of Stockholders.&nbsp; Proposal No.&nbsp;6 requests that we set </FONT>near and long-term
science-based greenhouse gas (GHG) <FONT>reduction targets within one year for Scope 1, 2, and 3 emissions.&nbsp;
(Although the proponent of Proposal No.&nbsp;6 acknowledged in a subsequent</FONT> filing that setting a Scope 3 reduction target &ldquo;could
reasonably take more than the one year requested in the Proposal.&rdquo;)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT>As outlined in our 2023 proxy
statement, the Board urges you to vote against this proposal for the following reasons:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT>We have already committed to setting and publishing absolute, science-based Scope 1 and 2 emissions
reduction targets by Q3 2024.</FONT></TD></TR></TABLE>

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<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT>Our recently completed GHG Protocol-aligned emissions inventory only includes three of the 15
categories of Scope 3 emissions thus far; however, we plan to continue to build out this part of the inventory, which is a foundational
step to meaningful target-setting.</FONT></TD></TR></TABLE>

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<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT>The proposal would expose the Company to unnecessary risk without adding meaningful value toward
addressing climate change, due in large part to unique industry challenges related to Scope 3 emissions.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT>If you subscribe to the advisory
services of Institutional Shareholder Services (ISS), you likely are aware that the firm recommended a vote in favor of this proposal,
stating that support is warranted because &ldquo;the company&rsquo;s peers have set more ambitious targets and the adoption of targets
would help the company align with regulatory expectations in California and Hawaii to be carbon-neutral by 2045.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT>We respectfully disagree with
this recommendation and note the following:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT>ISS&rsquo;s conclusion disregards the fact that NONE of the water utilities in our proxy peer
group have set reduction targets for Scope 3 emissions.</FONT></TD></TR></TABLE>

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<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT>ISS&rsquo;s recommendation does not consider how Proposal No.&nbsp;6 will impact stockholder
value.</FONT></TD></TR></TABLE>

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<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT>ISS&rsquo;s conclusion does not acknowledge that, as a regulated utility, we must get approval
on expenditures from our U.S. state utilities commissions.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>ISS&rsquo;s
recommendation disregards the fact that NONE of the water utilities in our proxy peer group have set reduction targets for Scope 3 emissions.
It also overlooks the fact that we have already committed to setting absolute, science-based Scope 1 and Scope 2 emissions targets, which
should enable us to catch up with, and in some cases, surpass our peers</B></FONT><B>.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT>These facts were noted by another
proxy advisory firm, Glass Lewis, which recommended voting AGAINST Proposal No.&nbsp;6 because &ldquo;the Company provides meaningful
climate-related disclosures and has recently made a commitment to setting absolute, science-based Scope 1 and 2 emissions reduction targets
by the third quarter of 2024.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">Although NONE
of the water utilities in our proxy peer group have set Scope 3 reduction targets, three have set Scope 1 and Scope 2 emissions reduction
targets. Our existing commitment to set absolute, science-based Scope 1 and Scope 2 emissions targets (rather than Scope 3 targets, as
requested by the proponent&rsquo;s proposal)</FONT> <FONT>will enable us</FONT> to align more closely
with, and in some cases surpass, the water utilities in our proxy peer group, <FONT>given the fact that
our reduction targets will be based on our Greenhouse Gas Protocol-aligned emissions inventory conducted by an independent sustainability
consultant.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT><B>ISS&rsquo;s recommendation
does not consider how Proposal No.&nbsp;6 will impact stockholder value.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">Importantly,
Glass Lewis also considered stockholder value, stating: &ldquo;We do not believe that </FONT>the proponent has sufficiently demonstrated
how the Company&rsquo;s existing practices threaten shareholder value or that adoption of this proposal would meaningfully benefit shareholders.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT>As we have noted in our proxy
and Definitive Additional Materials, achieving Scope 3 reductions is challenging and complex, given our business model. We acknowledge
that our Scope 3 emissions are significant, with the biggest contributors being the Capital Goods and Purchased Goods&nbsp;&amp; Services
categories. However, the most emissions-intensive expenditures in these categories are tied to our investment in water system infrastructure,
which is 1) the basis for stockholder returns, and 2) critical to performance on two other, more material ESG topics: water quality/customer
safety and water supply reliability.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT>Another contributor to Scope
3 emissions is our purchased water. While we have been working to maximize our local water production capacity to reduce the need to purchase
water, in many areas, purchased water is the only available source of water. ISS references a claim made by the proponent, stating that,
 &ldquo;many of the company&rsquo;s suppliers are government agencies in states such as California, Hawaii, and Washington that have set
state-wide GHG reduction targets.&rdquo; However, in most cases, the adoption of state-wide targets has not resulted in purchased water
suppliers publishing reduction targets; in fact, only 21% of our purchased water suppliers have published GHG emissions reduction targets.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT>We maintain that it is irresponsible
to set Scope 3 emissions reduction targets without first completing a full GHG Protocol-aligned inventory in order to identify opportunities
to meet future Scope 3 reduction targets without jeopardizing our ability to make necessary investments in water system infrastructure
or limiting our ability to purchase needed water supplies from single-source wholesale suppliers. In fact, failure to complete this foundational
work and develop achievable Scope 3 emissions reduction targets could threaten stockholder value.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT><B>ISS&rsquo;s conclusion does
not acknowledge that, as a regulated utility, we must get approval on expenditures from our U.S. state utilities commissions.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT>In reaching its conclusion,&nbsp;ISS
references a proposed government rulemaking that is not yet in effect. Although we believe we are well-positioned to meet future regulations,
our U.S. state utilities commissions must approve our cost structure and capital investments.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT>Additionally,&nbsp;ISS references
the Hawaii Supreme Court ruling that recognizes a human right to a stable climate, but it does not consider how this ruling functionally
impacts the Hawaii Public Utilities Commission&rsquo;s regulatory authority over our operations in Hawaii. Importantly, it also does not
consider that the State of California passed a law establishing a human right to clean, affordable water. In our experience, U.S. state
utilities commissions have prioritized affordability and physical climate change risk adaptation over emissions reductions. However, we
are keenly focused on including emissions-reduction-related projects in upcoming proceedings at our commissions and seeking to demonstrate
that these projects directly benefit customers.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT><B>We respectfully request that
you vote AGAINST Proposal No.&nbsp;6 so that we can continue to execute our strategy thoughtfully and methodically in order to continue
making progress on all of our material ESG topics while delivering value to stockholders.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">We
agree that it is critical that we reduce our Scope 1, 2, and 3 emissions, and we have communicated thoroughly and transparently about
our climate change governance, strategy, risk management, and metrics, as well as our plan to reduce emissions and set quantifiable emissions
reduction</FONT> targets<FONT>. Doing the right thing has always been in our DNA, and we have historically
focused on the ESG topics that are foundational to our business: water quality and customer safety; water supply reliability; affordability
and access; and water protection and conservation. A rigorous materiality assessment confirmed that these foundational areas are also
our most material ESG topics. However, since formalizing our ESG program, we have recognized and embraced the need to sharpen our focus
on climate change and our GHG emissions. In the first quarter of 2023, we completed a GHG Protocol-aligned inventory of our Scope 1 and
2 emissions as well as the three categories of Scope 3 emissions that we believed would be most relevant to our business. This work will
be foundational to our setting of Scope 1 and 2 reduction targets in the near term. It is also a first step in advancing our future disclosures
and target-setting for Scope 3 emissions. This thoughtful and methodical approach allows us to continue making progress on our emissions
reduction journey without compromising our ability to deliver value to our stockholders.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT>Forward-Looking Statements and
Other Important Information</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT>This letter and our other ESG
disclosures referred to herein (collectively the &ldquo;ESG Disclosures&rdquo;) contain forward-looking statements within the meaning
established by the Private Securities Litigation Reform Act of 1995. The forward-looking statements in the ESG Disclosures include Group&rsquo;s
objectives, goals, targets, progress, or expectations with respect to ESG, sustainability, and corporate social responsibility matters,
and business risks, opportunities, and plans. Because they are aspirational and are based upon currently available information, expectations,
and projections, they are subject to various risks and uncertainties, including limitations on our ability to make ESG investments without
the support of our regulators, and actual results may differ. Because of this, Group advises all interested parties to carefully read
and understand Group&rsquo;s disclosure on risks and uncertainties found in Forms 10-K, 10-Q, and other reports filed with the SEC. Group
undertakes no obligation to update any forward-looking or other statements, whether as a result of new information, future events, or
otherwise, and notwithstanding any historical practice of doing so. Group may determine to adjust any objectives, goals, and targets or
establish new ones to reflect changes in our business.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT>Historical, current, and forward-looking
ESG-related statements and data in the ESG Disclosures may be based on standards for measuring progress that are still developing, controls
and processes that continue to evolve, and assumptions that are subject to change in the future.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT>The information included in,
and any issues identified as material for purposes of, the ESG Disclosures may not be considered material for SEC reporting purposes,
and the use of the term &ldquo;material&rdquo; in the ESG Disclosures is distinct from, and should not be confused with, such term as
defined for SEC reporting purposes.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT>Due to the inherent uncertainty
and limitations in measuring GHG emissions under the calculation methodologies used in the preparation of such data, all GHG emissions
or references to GHG emissions in the ESG Disclosures are estimates. There may also be differences in the manner that third parties calculate
or report GHG emissions compared to Group, which means that third party data or methodologies may not be comparable to our data or methodologies.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT>Website references and hyperlinks
throughout the ESG Disclosures are provided for convenience only, and the content on the referenced third-party websites is not incorporated
by reference into the ESG Disclosures, nor does it constitute a part of the ESG Disclosures. Group assumes no liability for the content
contained on the referenced third-party references.</FONT></P>

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