WWF: Fortum Corporation’s Articles of Association to include Paris Agreement 1.5 degree target
WWF has sent Fortum a proposal for the AGM to decide to insert the Paris Agreement 1,5 degree target to the Articles of Association. In order to meet the target Fortum should among others publish a plan to phase out also the coal powered energy production of the German company Uniper.
Environmental NGO WWF Finland proposes for the Annual General Meeting of Fortum Corporation that a resolution that inserts the Paris Agreement 1.5-degree Celsius climate target into the Articles of Association. WWF Finland owns one single share in Fortum which under Finnish law is sufficient for bringing a proposal to the AGM.
Fortum becomes this spring the majority shareholder of the German energy company Uniper SE. The government of Finland is the biggest shareholder of Fortum with over 50% ownership. The combined CO2 emissions of Fortum and Uniper are significant because of coal power plants.
Fortum and Uniper have not announced a plan for the phasing out of coal. The phase-out happen by 2030 in order for the target of the Paris Agreement to be met and the increase of global temperature to be limited to 1.5 degrees Celsius. On the contrary, Fortum seems to support the continuing of the use of coal in Germany even up until 2038. Also, the company appears to approve the starting of production by Uniper at the new coal plant Datteln4.
WWF Finland suggests adding the following new clause to the Articles of Association:
The Board of Directors shall assess the climate risks of the operations and set up a scheduled science-based plan for aligning the operations of the company and the group with the Paris Agreement climate target limiting warming to 1.5 degrees Celsius. Climate risks, the alignment plan and its implementation shall be reported annually, for the first time at the Annual General Meeting in 2021.
“Fortum has published its vision (“For Cleaner World”). Without a clear and scheduled plan for phase-out, the fossil-intensive parts of the business operation will tarnish Fortum’s reputation and destroy market position as well as drive away responsible customers, partners, financers and investors”, says Raija-Leena Ojanen, Legal Advisor of WWF Finland.
Approval of the proposal requires qualified majority of two thirds at the AGM. Together with other environmental organizations, WWF Finland has in September last year proposed adding a similar principle into the Finnish government ownership steering policy. Fortum shareholders include many institutional investors such as pension insurance companies.
“Institutional investors are increasingly conscientious about how the companies they invest in contribute to the phase-out of fossil fuel. We encourage all Fortum shareholders, also private investors, to participate in the AGM and support the proposal”, Ojanen concludes.