AkzoNobel

AkzoNobel
Quick Facts
Type	Public
sector	Chemicals
Headquarters	Amsterdam, the Netherlands
Year of Origin	1994
Emissions (All Scopes)	12.8 Megatons of CO2 (2020)
Total Revenue	XXX
Stock Exchange	Bijv. Amsterdam
Key People	Thierry Vanlancker (CEO) Nils Smedegaard Andersen (Chairman)
Number of Employees	32,000
Subsidiaries	Dulux Sikkens Interpon International

AkzoNobel N.V., stylized as AkzoNobel, is a Dutch multinational company manufacturing paint and performance coating. The company has a long history of merges and divestments and was founded in 1994 when Akzo (a Dutch chemicals company) and Nobel (a Swedish chemicals and weapons manufacturer famous for being majority owned by Alfred Nobel) merged. AkzoNobel is headquartered in Amsterdam, the Netherlands and has activities in over 150 countries, employing about 32,000 people. It is the fifth largest paint and coating company worldwide.

Company Structure

AkzoNobel's company management is organized under Dutch law in a two-tier system, comprised of a board of management and a supervisory board.

Board of Management

Name	Function	Remuneration x1000 EUR
Thierry Vanlancker	CEO	6,271 EUR
Maarten de Vries	CFO	2,583 EUR

Supervisory Board

Name	Function	Remuneration x1000 EUR
Nils Smedegaard Andersen	Chairman Supervisory Board	172.5
Bryon Grote	Deputy Chairman Supervisory Board	120.5
Dick Sluimers	Chairman Remuneration Committee	100.0
Jolanda Poots-Bijl	Member Supervisory Board	100.0
Dr. Pamela Kirby	Member Supervisory Board	95.0
Patrick Thomas	Member Supervisory Board	102.5

Accountant

AkzoNobel has PricewaterhouseCoopers Accountants N.V. as an external accountant.

Main Activities

The main activities of AkzoNobel are the production and selling of decorative paints, industrial coatings, automotive and specialty coatings, marine and protective coatings and powdered coatings. Their activities are distributed under a large number of brands and subsidiaries active all over the world. Some big names include Dulux, International, Sikkens and Interpon.

AkzoNobel has its common shares listed on Euronext Amsterdam and is listed in the AEX index. The majority of its shareholders are from the UK and US.

Government

To what extent can the government influence company policy? (shareholder, licensing authority, client etc.) Has company received NOW support or royal status?

Paris Agreement until Today

What has company done or refused to do since the Climate Accord of Paris? Per company, where applicable refer to research on the benefits of fossil companies in the form of subisidies etc.

Financial Results since 2015

This tabel is meant to indicate that the companies have plenty of money to make their company more sustainable. Clearly distinguish between Dutch data and international data.

Financial situation

Year	Revenue	Profit	Dividend
2015	14.859 billion EUR	1.066 billion EUR	0.281 billion EUR
2016	9.434 billion EUR	1.052 billion EUR	1.184 billion EUR
2017	9.612 billion EUR	0.904 billion EUR	0.636 billion EUR
2018	9.256 billion EUR	6.729 billion EUR	1.446 billion EUR
2019	9.276 billion EUR	0.577 billion EUR	0.385 billion EUR
2020	8.530 billion EUR	0.671 billion EUR	0.391 billion EUR
2021	9.587 billion EUR	0.865 billion EUR	XXX billion EUR

In 2018, the Specialty Chemicals Division was sold to the Carlyle Group and GIC. The divestment resulted in an extra profit of 6.274 billion EUR so the profit from continuing operations in 2018 amounted to 0.455 billion EUR.

Scandals and controversies

AkzoNobel reached a secret settlement with employee for mercury poisoning

In 2016, word broke out that two years prior, AkzoNobel reached a secret settlement of thousands of euros regarding a personal injury caused at the factory. The employee in question had been poisoned by mercury, one of the chemicals present at the site. Doctors confirmed this. Despite attempts to keep it quiet, the story was picked up after a moving box with personal affects was found in the proximity of the factory.

AkzoNobel sued over Dutch pollution claims

Back in 2004, the Dutch ministry said it would continue a court case against national chemical group AkzoNobel. This court statement came in response to 15 polluted areas.

This was not the last time that AkzoNobel was found guilty of polluting. In 2017, there was a leakage close to AkzoNobel's salt factory in Hengelo.

Corporate Income Tax controversy

Up until 2019 AkzoNobel was exempt from having to pay any income tax (Dutch: winstbelasting of vennootschapsbelasting). This because they, like other Dutch multinationals such as Shell and Phillips, extract the losses made abroad from the profits made in the Netherlands. So, despite the fact that AkzoNobel makes money in the Netherlands, and potentially even profits, their balance sheet does not showcase this as they account for losses made in other countries.

This realization led to a lot of frustration amongst the public and certain political parties such as GroenLinks. Starting 2021, multinationals are no longer allowed to extract losses from outside of the EU from their profits made in the Netherlands. Additionally, losses made in the EU itself are only extractable for the following three years. From that point onwards, this will no longer be allowed either. Simultaneously, the G7 (an informal grouping of seven of the world's advanced economies) are striving to set up a coherent international standard for income tax levels, so that multinationals can no longer flee to so-called "tax havens".

Current Emissions

Total emissions in Megatonnes of CO₂ (2020)

Scope 1	Scope 2	Scope 3
0.051 Megatonnes of CO2	0.168 Megatonnes of CO2	12.6 Megatonnes of CO2

The reported CO₂ emissions of their scope 1 operations are 51.16 Kton (2020). Their reported scope 2 emissions are 168.2 Kton (2020). The emissions from their total value chain are a lot higher. For 2020 AkzoNobel reported that their craddle to grave carbon footprint (scope 1, 2 and 3) is 12.8 Mton. 5.9 Mton of this is attributed to purchased goods and services (scope 3 upstream) and 6.7 Mton to the processing, use and end-of-life treatment of sold products and VOC (scope 3 downstream).

Climate Policy and Plans

AkzoNobel has set as their target to reduce carbon emissions from their own operations and total value chain by 50% by 2030 (baseline 2018) and claims to align their sustainability ambitions with the Paris agreement. By 2030 it aims to run their operations on 100% renewable energy. By 2050 the target is to reduce their carbon emissions with 100%. Whether their 2050 ambition includes their scope 3 emissions is not clear.

Since 2018 the emissions of their own operations (scope 1 and 2) have decreased by 22%, their scope 3 emissions by about 10.5%.

AkzoNobel has listed a couple of strategies to reduce their carbon footprint of their own operations. First of all the company is investing in solar panels to be able to run their operations with renewable energy. So far it has installed over 10,000 solar panels at 17 different sites. However, as the company admits, solar generated electricity will not be sufficient on itself cover its total electricity consumption needs. The second strategy is to lower energy consumption, aiming for a 30% reduction by 2030 (baseline 2018). For their scope 3 emissions, which account for about 98% of their total emissions, AkzoNobel has not put forward any strategies to lower their carbon emissions.

Due Diligence

Keep the broader context in mind. Is the company integer when it comes to deforestation, palm oil, biodiversity, human rights etc etc? Be critical in the sources used here.

Conclusion

Although the 2030 ambitions of AkzoNobel meet the standards of the Paris Agreement its 2050 ambitions are not specific enough to do so since it does not specify whether the 100% reduction of emissions also includes their scope 3 emissions. Furthermore AkzoNobel does not show enough concrete plans to convincingly indicate that they will reach their targets. Although several policies are in place to reduce emissions from their own operations, with limited results, AkzoNobel has not disclosed any concrete plans to tackle their scope 3 emissions. Since their scope 3 emissions are by far the largest share of the total emissions (about 98%) it must be concluded that AkzoNobel does not have sufficient plans and strategies in place to meet their own ambitions and the targets set by the Paris Agreement. In order to commit itself to stay below the 1.5 degrees AkzoNobel needs to develop a concrete strategy to reduce their scope 3 emissions.