Shareholders Demand Yara Cuts Emissions to Meet Climate Targets

Investors are calling for Yara, Europe’s largest fertiliser manufacturer, to make deep cuts to greenhouse gas emissions. Five shareholders have filed a vote for Yara to strengthen its climate targets at its AGM on May 28. If successful, Yara will need to align its climate targets with the 1.5°C warming limit, the vital international goal for limiting temperature rise.

Yara, a Norwegian chemical giant, is the largest natural gas user in the EU, with a carbon footprint equivalent to over 16 coal-fired power plants, according to ShareAction, the group behind the investor call. The initiative is backed by four major investment firms: Cardano, Ethos Foundation, PGGM, and Greater Manchester Pension Fund.

High-polluting companies face growing pressure from investors to address their carbon emissions, which are seen as a threat to future corporate profits. Fossil fuel giants like Exxon, Chevron, and Shell have also faced climate resolutions at their AGMs, but shareholders have largely resisted calls for stronger action.

Norwegian environmental campaigners urge the Norwegian government and its pension fund, which own over 40% of Yara, to support the climate targets call. “Yara’s carbon footprint isn’t sustainable for people or the planet,” said Penny Fowler from ShareAction.

Yara’s board has called on shareholders to vote against the resolution, pointing to its existing climate measures. However, critics argue these measures are insufficient, as they exclude emissions from the supply chain and product use, which make up around 75% of Yara’s footprint. Yara has set targets to reduce the “emission intensity” of its products rather than absolute reductions, which could allow emissions to increase with production expansion.

The upcoming vote will decide whether Yara should introduce science-based targets across all emissions to limit global temperature rise to 1.5°C above pre-industrial levels. Yara claims it is committed to setting such targets, but ShareAction insists urgent action is needed within this decade to reduce emissions quickly.

Major Carbon Emitter

Fertilisers contribute around 5% of global emissions, more than aviation and shipping combined. Yara, which had a turnover of £12.2 billion last year, claims to be the largest producer of nitrates, a common chemical fertiliser produced with natural gas. While fertilisers have increased food production, scientists warn they are overused, releasing large amounts of nitrous oxide, a potent greenhouse gas, when applied to fields.

In the US, Yara plans to build new plants to produce ammonia, a key fertiliser ingredient, which could increase emissions and lock in long-term dependence on fossil fuels. Shareholders warn that without comprehensive targets, Yara’s operations may not align with the Paris Agreement goals.