Ethos considers that Holcim's climate report has sufficiently improved to be approved this year. The company has taken into account the main criticisms expressed by Ethos in last year’s vote. Ethos will re-evaluate its position next year based on the company's progress on climate issues. However, Ethos recommends to oppose the remuneration report as well as the remuneration of the executive management.

This year, Ethos recommends to approve Holcim's climate report at the annual general meeting to be held this Thursday in Zug (item 8 of the agenda). This is the second time that Holcim has submitted its strategy for reaching its 2050 net zero emissions target to a consultative vote of its shareholders since Ethos requested this in 2020.

At the 2022 annual general meeting, Ethos had recommended to vote against the report as it considered that Holcim's CO2 emission reduction targets were not sufficiently ambitious and not aligned with a scenario that would limit global warming to +1.5°C. This year, Ethos considers that Holcim, which is the world's largest cement company and one of the main industrial emitters of CO2, has addressed several concerns expressed last year. In particular:

  • Holcim has strengthened its reduction targets which are now compatible with a scenario of limited warming to 1.5°C and validated by the Science-Based Target initiative;
  • Holcim publishes for the first time all of its indirect greenhouse gas emissions (scope 3), which are linked to its investments and joint ventures and which represent 17% of the group's total emissions;
  • While an important part of Holcim's strategy is based on CO2 capture and storage technologies, the company publish for the first time the planned investments in this area by 2030 (CHF 2 billion) and the resulting capture potential (5 million tonnes of CO2 per year); 
  • Other information was also published for the first time this year, such as the level of scope 3 emissions for the reference year (2020) on which the reduction targets are based, as well as an estimate of the contribution of each measure implemented in reducing CO2 emissions.

Ethos is aware of the controversies and environmental scandals that have tainted the group's reputation in recent years and has been in regular dialogue with Holcim for many years in order to encourage the company to improve and not repeat the mistakes of the past. However, the item submitted for shareholder approval concerns the future and the strategy developed by the company to achieve its "Net Zero" objective. In view of the transparency efforts and the improvements made to the climate strategy, Ethos considers that the climate report can be approved this year. 

Ethos will however review its position next year depending on the progress, or lack thereof, made by the company. The whole point of an annual vote is to allow shareholders to assess the credibility and effectiveness of the measures implemented each year and, if necessary, to increase the pressure on the company's management to act even more.

In particular, Ethos asks Holcim to set reduction targets for emissions from its joint ventures, especially Huaxin Cement. Ethos will continue its engagement with the company and express its concerns. 

The remuneration of the executive management remains too high

Ethos recommends to vote against the remuneration report (item 1.2) and against the amount foreseen for the remuneration of the general management in 2024 (item 6.2). Ethos considers that the level of the variable remuneration, which reached 4.5 times the base salary for the CEO in 2022, is too high and that the environmental performance criteria taken into account for the calculation of the bonus are not sufficiently challenging. 

Finally, regarding the succession to the chairmanship of the board of directors, Ethos thanked today the outgoing chairman, Beat Hess, for the quality of the dialogue with Ethos during his chairmanship and the improvements made in terms of corporate governance as well as in terms of environmental and social responsibility of the company.

Ethos has taken note of the temporary combination of the functions of Chairman and CEO, which will be assumed by Jan Jenisch as of today. While Ethos regrets this combination of functions, which suggests that the board of directors did not adequately anticipate the succession plan, Ethos notes that the company has undertaken to separate the functions again within the next twelve months once a new CEO has been appointed. Consequently, Ethos was able to approve the election of Jan Jenisch as the new chairman of the board.

General meetings