NGOs call on German corporations to invest more in climate protection

Instead of distributing increasing amounts of their profits to shareholders, publicly-listed German corporations should invest more in climate protection, development and aid NGO Oxfam Germany and Berlin-based financial reform activist organisation Finanzwende Research argue in a report. The NGOs are calling for a corporate legal framework that ensures that corporations no longer put shareholder interests above the common good. Oxfam and Finanzwende examined 30 companies listed on Germany’s DAX stock index and found that many of them would have the financial leeway for the investments that the EU says are required to reach climate neutrality by 2050 but they instead choose to use increasing parts of their profits for shareholder dividends or to build up financial reserves.

Between 2009 and 2020, dividends increased by 85 percent, almost twice as much as profits, which rose by 48 percent, according to the report. Energy companies RWE and E.ON and steelmaker ThyssenKrupp, for instance, even paid out dividends in years of loss. In addition, the companies’ financial reserves grew from 122 billion euros in 2014 to almost 200 billion at the end of 2020, also mainly benefitting shareholders, the NGOs said. At the same time, there has been a lack of climate protection investments. Oxfam and Finanzwende argue that all companies invest too little, and many would be able to do so without any problems, even without government subsidies or tax breaks. In the transport sector, for example, the investment gap for climate neutrality by 2050 among BMW, Daimler, Volkswagen and Lufthansa amounts to 13.8 billion euros per year, while their profits have recently more than doubled on average. The companies could make the necessary climate investments and still distribute profits at the levels of 2009 and 2010, they add.