(3rd August) ShareAction today welcomes the announcement by Legal and General Investment Management that it will vote against the re-appointment of EMS-Chemie's chair, Bernhard Merki, at the company’s upcoming AGM. The UK’s largest asset manager said the chemicals producer does ‘not meet our minimum standards with regard to climate risk management, as set out in our net-zero guide for the chemicals sector.’
Swedish pension fund AP7 has also announced that it will vote against Mr Merki at its AGM on 12 August.
EMS-Chemie’s most recent sustainability report, published in July, reveals that the company expects its carbon emissions to increase by more than 20% over the next decade.
At a time when the consequences of global climate change are being felt across the planet, EMS-Chemie has no credible climate strategy. In June, the Swiss people voted in support of a new law requiring that all companies achieve net zero emissions by 2050. But the company’s 2050 target covers less than 1 per cent of its reported emissions and its intermediate targets in pursuit of this goal rely overwhelmingly on offsetting.
ShareAction is calling on all investors in EMS-Chemie to weigh up the mounting evidence, recognise that with Mr Merki as chair the board is asleep at the wheel on climate risk.
Simon Rawson, Deputy Chief Executive of ShareAction, said: “Investors are waking up to the fact that companies like EMS-Chemie are sleepwalking into climate catastrophe. With wildfires raging only 150km from the company’s headquarters in Switzerland, it is clear that there is no tolerance among investors or the public for climate pledges made in bad faith.
This is another example of an increasing trend of investors using the power they have in appointing directors to demand climate competent boards. Bernhard Merki and his board are failing to ensure that EMS-Chemie effectively manages the climate-related risks facing the company.”
The chemicals industry is globally responsible for six per cent of greenhouse gas emissions and a major driver of oil and gas demand. EMS-Chemie, a polymer and specialty chemicals manufacturer, is the sixth largest European chemical company by market capitalisation. Its top customers include most of the world’s best known car manufacturers.
The vote against Mr Merki is a last resort action following more than two years of attempted engagement with EMS-Chemie by investors. In that time, the company has rebuffed meetings with investors, remained opaque about its climate targets and strategies, kept minimal transparency with weak disclosures, and demonstrated a worrying lack of will and ambition to tackle carbon emissions.
Notes to editors
- EMS-Chemie's full sustainability report can be found here. ShareAction’s analysis of this report can be found here.
- EMS-Chemie is majority owned by a prominent family in Switzerland, the Blocher family, of whom Magdalena Martullo-Blocher is the CEO. Without proper oversight from a climate-competent board, all shareholders and stakeholders bear the risk of the company’s failure to manage its climate transition. Ms Martullo-Blocher is a politician for SVP, the only major Swiss party that led a referendum campaign against the Swiss net-zero referendum.
- Oliver Fluher, EMS-Chemie's former CFO, publicly campaigned for the Swiss Climate Law to be voted down while he still held his position at the company.
- The Swiss Climate and Innovation Act, passed after a public referendum on 18th June, requires Swiss companies to attain net-zero emissions by 2050 and sets an emissions reduction target of 90% for the industrial sector. It also offers technical and financial support to companies as they transition to net zero.