RWE's Profits Rise Amidst Global Environmental Concerns

The annual general meeting of RWE, the German energy giant, is set to take place this Wednesday in a virtual format once again. The company has reported a substantial profit of EUR2.3 billion for the previous year, exceeding initial forecasts. This impressive financial performance is attributed to thriving energy trading operations and adaptable electricity generation capabilities. CEO Markus Krebber has highlighted the pivotal role that renewable energy sources will play in the company's future, with ambitions to achieve climate neutrality by 2040. Shareholders are promised an increased dividend of EUR1.10 per share, reflecting a 10-cent rise from last year, with expectations of a 5 to 10 percent annual growth in dividends. Additionally, Krebber's compensation is poised to rise from EUR9 million to EUR11 million, along with increased remuneration for supervisory board members, justified by comparisons to compensation levels at other major corporations.

While RWE projects optimism for its future, critics have expressed grave concerns regarding the company's operations across various regions, including Texas, Namibia, and the Rhineland. The umbrella organization of Critical Shareholders held a press conference on Tuesday, where stakeholders affected by RWE's activities voiced their grievances, underscoring that RWE's impact reaches far beyond Germany.

In Port Arthur, Texas, RWE is constructing a terminal for liquefied natural gas (LNG), set to commence operations next year. The company has entered into a 15-year agreement to supply 2.25 million tons of LNG annually. Local community representative John Beard, a former refinery worker, highlighted the detrimental environmental effects this project could have, stating that the LNG terminal would worsen air quality and exacerbate health issues, including cancer rates, among residents.

In Namibia, RWE is involved in a green hydrogen initiative through its partnership with Hyphen. The project aims to produce hydrogen that will be converted into ammonia for easier transport. RWE has committed to purchasing 300,000 tons of this hydrogen annually starting in 2027. However, Maboss Johannes Ortmann from the Nama Traditional Leaders Association accused RWE of perpetuating 'green colonialism,' arguing that the Global South is being exploited in the name of energy transition. He criticized the project for legitimizing past illegal land grabs from the Nama people. Advocates from the European Center for Constitutional and Human Rights also emphasized that the energy transition must not infringe on human rights and must be equitable, condemning the colonial patterns being repeated on indigenous territories without ensuring proper consultation and consent.

Concerns regarding local operations in Germany were echoed by Timon Turban of the Water Alliance Rhineland. His organization is scrutinizing RWE's plans to fill the mining pits in the Rhineland with water from the Rhine River. He criticized this approach, arguing that instead of expanding the mining sites, they should be reduced, especially as the Rhine faces drought conditions as early as March. Turban urged the North Rhine-Westphalia state government to ensure that RWE bears the long-term costs associated with coal mining.

In response to these issues, the Critical Shareholders have submitted multiple counterproposals for consideration at RWE's general meeting, although the likelihood of garnering majority support from shareholders remains low. Nonetheless, these proposals will be presented during the meeting.