Institution Theme Category Industry
  • BlackRock
  • Governance
  • Board & Governance
  • 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
  • Reelect the board of directors
  • Vote
  • For
  • Rationale
  • N/A
  • Details
  • We believe voting against the bundled election of the board of directors would be disruptive and not in the best interest of shareholders. The discharge is a more appropriate mechanism to express our concerns.