Institution Theme Category Industry
  • BlackRock
  • Environmental
  • Climate
  • Utilities
Company Year Market Link
Fortum Oyj 2020 N/A

Fortum recently acquired a majority stake in Uniper, increasing its stake in the company from 49.9% to 70%. Upon closing of the complete agreement, the transaction will substantially increase the company’s exposure to coal-fired power generation due to Uniper’s portfolio. More than 30% of the combined capacity is expected to be based on coal1. Consequently, this transaction will significantly increase the company’s carbon intensity. Due to these concerns, the World Wildlife Fund (WWF) Finland submitted a climate risk shareholder proposal for voting consideration at Fortum’s 2020 annual meeting, asking the company to “Include Paris Agreement 1.5-degree Celsius Target in Articles of Association”.
We recently engaged with Fortum to better understand the background of the transaction and the company’s perspective on the WWF shareholder proposal. The company provided useful context about the intricacies of the shareholder proposal but did not entirely alleviate our concerns about the company’s overarching direction of travel.
We note that Fortum recently published a sustainability report addressing all the pillars of the TCFD (Task Force on Climate-related Financial Disclosures) framework.
We look forward to seeing how these transparency commitments evolve with the expected integration of Uniper. We also note that Fortum’s carbon-free generation will increase in absolute terms as a result of the transaction and that Uniper has announced a plan to phase out more than half of its German coal-fired power production.
…Based on our assessment of company leadership from our analysis and engagement, BIS chose to withhold support for management on certain key issues, specifically by: (1) voting against the discharge of the board due to concerns relating to its corporate strategy to significantly increase its exposure to coal and (2) abstaining on the shareholder proposal asking the company to amend its Articles of Association to include a 1.5-degree target.


  • Proponent
  • Management
  • Resolution
  • Approve Discharge of Board and President
  • Vote
  • Rationale
  • N/A
  • Details
  • We believe that the board’s decision to significantly increase the carbon intensity of the portfolio with the phased acquisition of Uniper is at odds with the direction of travel in the industry and the goals of the Paris Agreement, and brings uncertainties about the future financial risk profile of the company. The decision by the board to significantly increase its exposure to coal energy generation calls into question the board’s integration of climate risks into its corporate strategy. Our vote against the discharge reflects these concerns.