Responsible investing: Coutts helps cut carbon emissions from chemicals giant

Shareholders including Coutts have prompted a global chemicals company to set clear targets and take tough action to tackle climate change.

LyondellBasell, one of the largest plastics, chemicals and refining companies in the world, has committed to achieve net zero – and not add to the amount of greenhouse gases in the atmosphere – by 2050.

The action they’re taking following concerns raised by shareholders includes launching a global renewable energy strategy, using lower-emitting fuels and phasing out coal.

Leslie Gent, Head of Responsible Investing at Coutts, said: “This is a great example of shareholder power at work. And there are many, many more. As a responsible investor and B Corp, we want to ensure the companies in which we have a stake have the same commitments to a low carbon future as we do.

“With COP26 now finished, climate change and sustainability are top of the agenda for governments and businesses across the globe, so this is more important and necessary than ever.”

Ambitious goals were needed

Coutts was part of a group of investors that put climate change squarely on the agenda of LyondellBasell’s 2021 annual meeting, working with our voting and engagement partner EOS at Federated Hermes.

The group raised concerns about the company’s existing strategy and performance in managing climate-related risks and opportunities. They also highlighted the importance of setting ambitious targets consistent with the United Nations’ Paris Agreement – an international treaty on climate change.

These efforts prompted LyondellBasell to accelerate its efforts towards a net zero commitment. Then, in September, it laid out a plan for achieving net zero emissions across its global operations by 2050, including short- and medium-term targets aligned with the Paris Agreement. The strategy includes the company’s commitment to achieving an absolute reduction of 30% in direct and indirect emissions by 2030.

LyondellBasell has also prioritised actions to help advance a circular economy – which involves repairing, reusing and recycling products and materials as long as possible – and eliminate plastic waste from the environment.

This shareholder action was driven as part of Climate Action 100+, an investor-led initiative to ensure the world’s largest corporate greenhouse gas emitters take necessary action.

Bob Patel, CEO of LyondellBasell, said: "While climate science is extremely complex, there is little doubt greenhouse gases contribute to global warming. The UN's Intergovernmental Panel on Climate Change report is the most recent indicator that firm commitments, collective action and a sense of urgency are needed to help address the global challenge of climate change.

“We are confident in our approach and committed to doing our part."

Bruce Duguid, Head of Stewardship, EOS at Federated Hermes, said: “We aim to take companies up a ladder of ambition, starting with an initial commitment to net-zero emissions by 2050 or sooner. This should be followed by putting in place short, medium and long-term targets. Ultimately it should lead to a portfolio of net-zero companies, ideally by 2030 or sooner.”

Our latest responsible voting and engagement activity

Through our partnership with EOS, Coutts works to ensure the companies we hold in our client portfolios and funds meet our high standards on sustainability. Full details of our voting and engagement activity for the third quarter of 2021, broken down by topic, are in the charts below.

Highlights include:

• over the last quarter we engaged with 115 companies held in the Coutts portfolios on a range of 377 environmental, social and governance issues and objectives – including climate change, executive pay and board diversity
• we made voting recommendations at 103 meetings (1,342 resolutions)
• at 49 meetings we recommended opposing one or more resolutions

OUR VOTING AND ENGAGEMENT IN NUMBERS, Q3 2021

voting