YARA INTERNATIONAL ASA | Set comprehensive Scope 3 targets and implement measures

Status
7.82% votes in favour
AGM date
Previous AGM date
Proposal number
13
Resolution details
Company ticker
YAR
Lead filer
ShareAction
Co-filers
Cardano, Ethos Foundation, Greater Manchester Pension Fund, PGGM
Resolution ask
Set targets or plans
ESG theme
  • Environment
ESG sub-theme
  • GHG targets / emissions
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Materials
Company HQ country
Norway
Supporting materials
  • FOR DISTRIBUTION_Yara shareholder resolution W COFILERS 20240426.pdf Download
Resolved clause
Shareholders direct the company to publish science-based targets to reduce scope 3 greenhouse gas emissions over the short, medium, and long term, in line with the goal of limiting global warming to 1.5C, and to implement measures to reduce such emissions. Targets and measures should include upstream as well as downstream emissions and entail an absolute reduction in emissions. They should be disclosed before the next annual shareholder meeting in 2025.
Supporting statement
The net-zero transition will come with numerous opportunities for Yara. Yara has taken important steps to realise these opportunities: the company has expanded its use of renewable energy, invested in key renewable technologies, and developed new
sustainability-focused product lines. Yet Yara’s climate strategy is missing a key element: the company does not have
comprehensive targets to reduce scope 3 emissions in the near and long term.Scope 3 emissions are highly material for Yara, accounting for around 75 per cent of the company’s carbon footprint. Despite this, Yara does not have a net-zero target covering scope 3 emissions, and its near-term scope 3 targets are weak. Yara’s 2030 target excludes upstream emissions, which account for 15 per cent of the company’s total carbon footprint. On the downstream side, the target would entail only a modest (11.1 per cent) absolute reduction in emissions. Such limited reductions would make it challenging to achieve the steep long-term decline in fertiliser emissions which several recent 1.5C pathways for the sector have shown to be feasible by 2050, such as the 2022 study co-authored
by the International Fertilizer Association and SystemIQ. Yara also has a near-term intensity target which covers a portion of its upstream scope 3 emissions. The target is set to expire next year, and, according to company disclosures, is not expected to result in any reduction in absolute scope 3 emissions. While Yara has said that it is committed to setting science-based targets across all
scopes, the company has not provided a clear timeline for publishing additional targets, despite several years of engagement with concerned investors on the topic.

How other organisations have declared their voting intentions

Organisation nameDeclared voting intentionsRationale
EdenTree Investment Management LtdForWe view climate-related risks to be financially material to businesses, and are supportive of pushing Yara for a better commitment in this regard. While we acknowledge the recent progress made by the company, Yara's existing climate targets are unambitious and not aligned to science-based pathways.

As part of our proprietary Climate Stewardship Plan, we monitor our highest emitting companies against 13 climate-related expectations, several of which Yara has moved backwards on. In light of this we have decided to escalate our engagement by supporting this proposal, the success of which will help guide the company to make sufficient progress on climate.
Merseyside Pension FundForThe company has made good progress in developing a credible climate transition plan but needs to take the next step on its Scope 3 emissions sooner rather than later. Comprehensive reporting on climate impacts is in shareholders’ interests both as a means of informing them of potential risks and opportunities faced by the company, of strategies put in place to manage those risks and opportunities, and of the evaluation of the potential impact of different scenarios, including a 1.5 degrees Celsius scenario, on their businesses, strategy, and financial planning.

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