“The potential addition of U.S. Metal’s 11 blast furnaces to Nippon Metal’s operations will nearly actually improve the price of decarbonization for the corporate,” Brynn O’Brien, govt director of the Australasian Centre for Company Accountability (ACCR), mentioned.
ACCR, which has lower than 1% of Nippon Metal’s shares, has filed shareholder proposals with two different stakeholders, Company Motion Japan (CAJ) and Authorized & Common Funding Administration (LGIM), calling on the corporate to enhance its decarbonization technique.
Requested about ACCR’s considerations, Nippon Metal mentioned in a press release to Reuters it deliberate to share applied sciences associated to decarbonization, together with hydrogen injection into blast furnaces, with U.S. Metal ought to the deal shut.
“The mix of the applied sciences developed by Nippon Metal and U.S. Metal to speed up efforts to turn into carbon impartial by 2050,” Nippon Metal mentioned with out giving particulars.
The businesses plan to shut transaction earlier than year-end.
Nippon Metal holds its annual basic assembly on June 21.
Not-for-profit group CAJ needs extra info on the corporate’s carbon emission targets “in order that traders together with ourselves could make applicable assessments of dangers, together with the whole value of decarbonization as a complete group,” Yasunori Takeuchi, CAJ’s chief govt, mentioned in an e-mail.
LGIM didn’t reply to a Reuters request for a remark.
Shareholder activism on local weather change has gained momentum in Japan over the previous few years, however has not essentially led to adjustments in coverage at corporations which have already set out emissions discount plans.
Beneath plans introduced in 2021, earlier than the U.S. Metal bid, Nippon Metal estimated that decarbonization might value it as much as 5.5 trillion yen ($34.8 billion) in capital spending, together with analysis and improvement, by 2050, with a few of the prices to be lined by state help.
“Nippon Metal wants to think about how the acquisition impacts its decarbonization plans, and transparently talk this,” mentioned O’Brien.
As a part of the takeover proposal, Nippon Metal pledged to spend a minimum of $1.4 billion on expertise at U.S. Metal’s mills to “produce extra superior and environmentally sustainable metal”.
To assist decarbonize, Nippon Metal needs to feed hydrogen into its coking coal-exposed blast furnaces, a course of it’s testing at a metal website close to Tokyo. It additionally plans to make use of carbon seize, utilisation and storage and add extra electrical arc furnaces.
($1 = 158.0800 yen)
(Reporting by Katya Golubkova; Modifying by Sonali Paul and Miral Fahmy)