Regarding Item 2 of the Agenda
The Association of Ethical Shareholders proposes that the allocation of distributable profit as proposed by the management is to be rejected.
By increasing the dividend in the middle of the corona pandemic, Daimler AG is showing its ignorance of the mood of society as a whole. While the Group is receiving the short-time working allowance for some of its workforce, it is now paying out €1.35 per share instead of the 90 cents paid last year. Daimler employees, whose wages have been cut or who are threatened with dismissal due to the savings plan of Daimler CEO Ola Källenius, cannot understand why shareholders are to receive €1.4 billion.
A responsible management aware of the challenges of the future would put aside a significantly larger proportion of the Company’s profits for necessary investments such as the accelerated changeover to electric mobility and the related infrastructure, and the production of buses and rail vehicles. This would also allow jobs that are now being cold-heartedly eliminated to be retained. For this reason, the Association of Ethical Shareholders demands a dividend of only €0.10 per dividend-entitled share instead of €1.35.
Regarding Item 3 of the Agenda
The Association of Ethical Shareholders proposes that the actions of the members of the Board of Management of Daimler AG for the year 2020 are not to be ratified.
The costs of the corona pandemic are being imposed on society
In the 2020 financial year, Daimler AG showed that it feels more committed to its shareholders than to its employees. While many employees had to go onto short-time working and suffered financial losses, the dividend actually increased in what was supposed to be crisis year. Profit sharing of €500 for the employees is only a small compensation. The consequences of the pandemic have thus been socialized, while the profits are now to be privatized.
Anyone who has heard the car lobby VDA, which also represents Daimler AG vis-à-vis politicians in Berlin, with its constant demands for new government subsidies for car buyers, can anyway only be surprised. Despite the corona crisis, or perhaps because of it, Daimler AG achieved an increase in profits last year. In addition to value-added tax cuts and short-time working allowances, the buyers’ subsidies for plug-in hybrids and electric cars had a clear impact in this country. It is therefore fair to say that the dividend for the shareholders, which is even higher than in 2019, was substantially co-financed by the taxpayers.
The official fuel-consumption figures for plug-in hybrids are unrealistically low
An additional side effect for the Group is that by selling a large number of plug-in hybrids with their unrealistically low official fuel-consumption figures, it was also possible to meet the EU’s CO2 fleet limit for 2020. This is a purely theoretical contribution to climate protection, based on loopholes in the legal regulations negotiated at the time by lobbyists in Brussels who were also supported by Daimler AG. The actual objective of those regulations is to reduce greenhouse gases for the sake of climate protection, and this is being counteracted by the exploitation of negotiated loopholes. Studies show that plug-in hybrid variants of a car model often have even higher fuel consumption and thus CO2 emissions in real-world operation than a vehicle of the identical model series with only a combustion engine. Furthermore, neither the parties putting the vehicles on the roads –in this case Daimler AG –nor the users have to prove that these vehicles are ever electrically charged and operated.
Daimler lags behind with electric mobility
Unfortunately, not much happened at Daimler AG in terms of all-electric vehicles in the 2020 financial year. But with the EQA, the electric version of the GLA, a model suitable for the volume market will at least be on the road in 2021, even if it is unfortunately a vehicle that was not designed as an electric car, but primarily as a car with a combustion engine. It is also utterly incomprehensible why there is only a plug-in version of the upcoming C-Class, but no electric version. In times of an electric-vehicle boom, an opportunity for Daimler to establish itself as a brand of change and to compete with other brands is now being negligently wasted.
Name a date for the end of the combustion engine!
Anyone who claims to provide “sustainable luxury” must be measured against this slogan. Large, heavy plug-in hybrids, which in reality consume much more fuel and thus emitCO2accordingly, are the opposite of sustainability; they are wasters of resources. Instead of continuing to launch such sham products, Daimler should follow its public statements on an electric future in the car sector with action: The new Mercedes-Benz AG must –at least for Europe –finally name an early date for the end of new cars with combustion engines; the Board of Management has so far failed to do so. But of course, not every electric car is environmentally friendly. Strict environmental and resource standards must also apply here.
The emissions scandal is not being dealt with
In 2020, Daimler AG still has to deal with its failings of the past. The Group still refuses to come to terms with the diesel emissions scandal in full. There are still no admissions of guilt or effective improvements to the vehicles. Just recently, Germany’s Federal Motor Transport Authority (KBA) once again made it clear that the more than one million vehicle recalls are still in effect. Challenges to this decision by Daimler AG have been rejected. The KBA has apparently found a total of five different defeat devices in the Group’s various vehicles, with some models even having two of them. The courts have already confirmed that at least some of these defeat devices are illegal. Despite all this, Daimler continues to claim that the Group has not cheated on its diesel vehicles’ emissions; these claims were and are obviously false and either indicate a lack of oversight by the Group’s Board of Management, or were and are deliberate misstatements. International authorities also continue to assume that illegal defeat devices are installed in further Mercedes-Benz diesel vehicles.
Regarding Item 4 of the Agenda
The Association of Ethical Shareholders proposes that the actions of the members of the Supervisory Board of Daimler AG for the year 2020 are not to be ratified.
The Supervisory Board has failed to set the course for the transport turnaround. This would require strategic instructions for the Board of Management so that it can initiate the measures necessary to restructure the Group.
Initiate the transport turnaround!
Motorized private transport in its current form is harmful to the climate and to health and contributes significantly to reducing the quality of life in cities. This is why alternatives to the car and the strengthening of public transport are necessary. Continuing to rely heavily on the production of private cars is not sustainable and jeopardizes the continued existence of the Group.
At the same time, there is a growing demand for electric buses and rail vehicles for local public transport, which the market is not currently meeting. Daimler AG slept through this trend for a long time and became involved in the development of electric buses very hesitantly. It didn’t start until 2018 with the eCitaro, while other manufacturers, especially from China, have been active in this market for years. And those persons responsible for the Group obviously do not have their eyes on the future market for rail vehicles.
Politicians have now recognized that the massive expansion of local and long-distance public transport is just as essential for a sustainable transport revolution as its decarbonization. For this reason, public funds are increasingly flowing into the conversion and expansion of this sector. At the same time, it is to be expected that the subsidization of motorized individual transport through instruments such as the company-car privilege will not be politically sustainable for much longer. The abolition of these subsidies will lead to further declines in unit sales, especially for suppliers that rely heavily on typical company cars.
Daimler has non-climate-friendly batteries produced, mainly in China
At first glance, electric vehicles are significantly more climate friendly than cars with combustion engines. However, if the energy comes from non-renewable sources, electric vehicles are not climate-neutral either. This problem also exists with the production of batteries such as those needed by Daimler for its electric vehicles because the batteries used by Daimler and other German automakers come mainly from Asia, especially China. Daimler only began cooperating on this with the Chinese company Farasis in mid-2020. Battery production requires enormous amounts of energy, which in China comes mainly from climate-damaging coal-fired power plants. A study by the Association of German Engineers (VDI) shows that 8.4 metric tons of CO2 emissions are currently produced for a diesel car, while 16.8 metric tons are produced for an electric car with a battery from China.(https://www.vdi.de/news/detail/einseitige-fokussierung-auf-pkw-mit-batterieantrieb-gefaehrdet-co2-ziele)
It is no coincidence that reporting by Daimler AG on responsible raw-material sourcing is very selective. As the current CSR Directive Implementation Act allows companies to decide for themselves what they report on and to what extent, the Daimler Sustainability Report has many gaps.(https://power-shift.de/wp-content/uploads/2020/12/Performance-Check-Automobilindustrie-Verantwortungsvoller-Rohstoffbezug-PowerShift-Inkota_Fehlerkorrektur.pdf).
Lack of transparency on arms exports
Daimler is a member of the Federal Association of the German Security and Defense Industry (BDSV), which represents the interests of the German defense industry. Daimler also makes appearances at arms fairs and is, for example, on the list of exhibitors at the IDEX arms fair, which was held in Abu Dhabi at the end of February. Nonetheless, one searches in vain for terms such as “military” or “armaments” in the annual report. This is why we regularly ask at annual shareholders’ meetings where Daimler military vehicles are exported to. Until now, Daimler AG has always listed all recipient countries by name in its answers. As a result, it has become known that in recent years, Daimler military vehicles have repeatedly been delivered to countries that are involved in wars, are located in crisis regions, and where human rights are trampled underfoot. In 2020, however, it was stated, “As a matter of principle, we do not comment on the individual recipients.”
What has become known, however, is that 86% (in terms of total value) of Daimler military vehicles exported in 2019 were delivered to third countries (countries outside the EU, NATO and equivalent countries), so military-vehicle exports cannot simply be swept under the carpet. Especially since the Group emphasizes that respect for human rights “[is] a fundamental component of responsible corporate governance” for Daimler and that the Group (would like to) communicate its “handling of the issue of human rights even more transparently.”
The Supervisory Board must work to ensure that a critical evaluation of Daimler’s military-vehicle export practices is once again made possible and that military-vehicle exports to warring and human-rights-violating countriesare stopped immediately.
Regarding Item 6 of the Agenda
The Association of Ethical Shareholders proposes that the candidates stated under b) and c) are not to be elected to the Supervisory Board of Daimler AG.
The Association of Ethical Shareholders considers the candidate proposed under b), Ben van Beurden, Den Haag, the Netherlands, Chief Executive Officer of Royal Dutch Shell plc, United Kingdom, the Netherlands, to be unsuitable. At a time when climate and environmental protection are high on the agenda, it would be a devastating signal if the head of one of the world’s largest oil companies, which is responsible for environmental pollution and the production of climate-damaging fossil fuels, joins the Supervisory Board of Daimler AG. In 2015, in order to expand Shell’s empire, van Beurden pushed through the USD70 billion purchase of BG Gas, a company primarily active in deep waters. His justification is that BG would advance Shell’s financial growth strategy–especially in deep waters and with LNG (liquefied natural gas). Shell is already one of the industry leaders in both fields. https://www.manager-magazin.de/unternehmen/personalien/shell-chef-van-beurden-und-der-70-milliarden-dollar-deal-a-1027474.html
In Germany too, the reputation of the oil multinational headed by van Beurden is as bad as can be imagined. As became known in July 2020, a total of up to 450,000 liters of diesel oil leaked from a pipeline at the Shell refinery in the Cologne district of Godorf, contaminating the soil. Shell had already been aware of the environmental disaster since April 2020. The environmental association BUND accuses Shell of neglecting safety checks on pipelines, with excessively long intervals between inspections of that 60-year-old pipeline, for example. Shell was initially unable to assess the extent of the damage; it has stated that the leak was discovered by chance. https://www1.wdr.de/nachrichten/rheinland/neuer-umweltskandal-bei-shell-in-koeln-godorf-100.html
The Association of Ethical Shareholders considers the candidate proposed under c), Dr. Martin Brudermüller, Mannheim, Chairman of the Board of Executive Directors of BASF SE, to be unsuitable.
As a long-standing member of the Board of Executive Directors of the world’s largest chemical company and as its Chairman of the Board of Executive Directors since 2018, Brudermüller is jointly responsible for numerous irregularities. For example, BASF SE does not live up to one of its corporate objectives, namely –as it states itself– “to act responsibly in purchasing and production.”
At least since BASF’s 2015 annual shareholders’ meeting, the Board of Executive Directors –and thus Brudermüller as well –have been aware that BASF was not taking sufficient care of supply chain violations and for years ignored the disregard for internationally recognized standards at its British-South African platinum supplier Lonmin plc (now Sibanye-Stillwater). For example, mining company Lonmin was partly responsible for the bloody crackdown in 2012 on a miners’ strike at a platinum mine near Johannesburg, South Africa. In the “Marikana massacre,”34 miners were shot dead by South African police (https://basflonmin.com/home/). The handling by the BASF Board of Executive Directors of publication of audits that the Company had carried out at its supplier Lonmin in South Africa is also problematic. Despite repeated requests from the Association of Ethical Shareholders, other non-governmental organizations and shareholders, BASF has refused to review the audits.
Furthermore, the Association of Ethical Shareholders objects to the current Supervisory Board member Dr. Bernd Pischetsrieder being proposed as candidate for the chairmanship ofethicl the Supervisory Board, following the departure of Dr. Manfred Bischoff from the Supervisory Board. The advance praise for Pischetsrieder is clear: “The fact that Daimler is now presenting the ex-VW [and BMW] boss as successor for the head of the Supervisory Board is a step backwards and not a signal for a departure into a better future.” (https://www.wiwo.de/unternehmen/auto/neuer-aufsichtsratschef-bei-daimler-pischetsrieder-ein-mann-aus-der-steinzeit-der-autoindustrie/26683820.html).
The business magazine Wirtschaftswoche is not alone in its assessment of the “man from the Stone Age of the automotive industry. The fact that the 72-year-old Bavarian is replacing the 78-year-old Swabian Manfred Bischoff is not a sign of a new dawn in the Stuttgart board of old-men.