Union Investment rejects Enkraft proposal for the RWE general meeting

FRANKFURT (Dow Jones) — The RWE investor Union Investment will not support a motion by the activist investor Enkraft at the general meeting of the energy company on Thursday with the aim of quickly spinning off the coal division. “We do not consider a rapid spin-off of the lignite business, as Enkraft is now demanding, to be expedient,” said Henrik Pontzen, Head of Sustainability/ESG in Union Investment’s portfolio management, in a statement at the RWE Annual General Meeting.

Pontzen explained that it would not help the environment if RWE emits less CO2 and another owner uses the Rhenish lignite to generate electricity. Coal does not belong in other hands, but abolished. “We will not support Enkraft’s supplementary request,” he clarified.

However, Union Investment is demanding more speed from RWE CEO Markus Krebber when it comes to the coal phase-out and transformation. “Mr. Krebber, you are reliable, but not ambitious enough,” the statement said. “Don’t let yourself be carried away, take the lead – then RWE can soon be sustainable.” Transformation not only requires a sure instinct, but also penetrating power.

Enkraft has been campaigning for a quick spin-off of RWE’s lignite segment for months. In the application to the general meeting, the investor demands that the board of directors and the supervisory board should be instructed to submit draft contracts and plans for the spin-off of the coal business by next year’s general meeting at the latest.

As a reason, Enkraft states, among other things, that the business area is not only economically negligible in the long term and ecologically questionable, but that continuing it also leads to the company being undervalued and hinders the focus on the expansion of the core business of renewable energies.

In a statement on the Enkraft application, RWE explained that a “legally binding preliminary determination would close off other room for maneuver for the Executive Board”. This applies in particular to more promising alternatives that could be developed in agreement with politicians, such as outsourcing to a foundation.

Enkraft’s application does not contribute to accelerating RWE’s sustainability-oriented strategy, the statement continues. “A spin-off would not save a ton of CO2, but there would be considerable uncertainty for the employees and regions affected,” says RWE.

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(END) Dow Jones Newswires

April 26, 2022 10:34 ET (14:34 GMT)