‘Filing a resolution’ allows investors to escalate a particular issue to the company directors and other shareholders – who can all then vote on the resolution at the company’s Annual General Meeting (AGM).
Yara International is a Norwegian fertiliser company, and the resolution we’ve coordinated calls on it to set targets for reducing the harmful, planet-heating emissions that exist across its entire ‘value chain’. This refers to the full lifecycle of a product, each step during production and use through to its end of life. In this case, it covers steps such as the extraction and processing of fossil fuels used to make the fertiliser and the emissions released during their use in farmers’ fields once they have been sold.
Fertilisers and their impact on climate change
There is no denying that nitrogen fertilisers play a key role in producing crops that feed people around the world. However, to protect people from the climate crisis, fertiliser companies must shift their business models away from dirty fossil fuels and towards more efficient and sustainable use of nitrogen fertilisers in agriculture.
Fertiliser production and use is often overlooked when compared to other high-emitting industries - but it contributes to 5% of total global greenhouse emissions, which is more than the plastics industry.
The production of ammonia – a key ingredient of nitrogen fertiliser – is hugely energy-intensive, and globally, it produces emissions equivalent to those of Nigeria, Colombia, Bangladesh, and Portugal combined.
What's more, once they've been produced and applied to fields, these synthetic nitrogen fertilisers release nitrous oxide – a greenhouse gas 265 times more potent than carbon dioxide.
The over-use of synthetic fertilisers is also a major driver of water pollution, which can lead to algal blooms, oxygen depletion, and dead zones in waterways - areas where nothing can survive.
So why are we challenging Yara International on its climate impacts?
Yara International is Europe’s largest fertiliser company. In 2022, it emitted almost 63 million tonnes of CO2 across its whole value chain - equivalent to the yearly emissions of more than 16 coal-fired power plants.
ShareAction has engaged with Yara International since 2021 via our Chemicals Decarbonisation Investor Coalition. The coalition brings together a group of investors who hold shares in chemical companies and therefore hold the power to influence them to change policies and practices that are impacting people and the planet.
Since 2021, investors have repeatedly called on Yara International to set emission reduction targets across its whole value chain – known as ‘scope 3 emissions’.
“The climate impacts of companies like Yara International go far beyond its own production and energy use; they encompass the entire lifecycle of its products. Yara’s scope 3 footprint constitutes around 75% of its total emissions and the company should take responsibility for the full climate impact of its products.” — Mariet Druif, Responsible Investment Officer at Cardano, a Yara International investor supporting the resolution.
Investors in Yara International that have been involved in filing the resolution (‘co-filed’) are also keen to stress to the company that any emission reduction targets must be based on the best available science. Investors require verifiable targets based on science to evaluate how well companies they invest in are doing with climate issues, including risks and opportunities. Yara International is a member of Science Based Targets Initiative (SBTi), an expert advisory group working to develop guidance on how the chemicals sector can reduce or move completely away from carbon emissions, so they should be well placed in setting these targets.
“We have noted Yara's participation in SBTi and await the publication of the guidance later this year. We fully expect that Yara will align with the best available science, and we encourage them to set science-based emissions reduction targets ahead of the 2025 AGM; and have them accredited by external standard setters as soon as possible. Demonstrating such commitment to science-based solutions could position Yara International as a climate leader within the global fertiliser industry.” — Vincent Kaufmann, CEO at Ethos Foundation, a Yara International investor supporting the resolution.
The resolution, coordinated by ShareAction and Yara International shareholders, will be voted on at the company’s Annual General Meeting (AGM) on 28 May. We are strongly encouraging environmentally and socially conscious shareholders to demonstrate their commitment to responsible investment by voting ‘for’. This includes the Norwegian Government, who own a 36% stake in Yara International and therefore carries a huge amount of weight in driving positive change.
For more details on why shareholders should be supporting our resolution at Yara International, see our investor briefing here.
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