Via Financial Times

Siemens’ embattled chief executive has lashed out at “grotesque” environmental protests, as he faced the ire of investors over his company’s handling of a controversial Australian coal contract.

Speaking at the German industrial giant’s annual meeting in Munich, Joe Kaeser said the €18m rail infrastructure deal, which sparked a global backlash, was “irrelevant” to the commissioning of the Carmichael mine in Queensland.

With bushfires raging across Australia, the minor contract became a flashpoint for climate campaigners, who demanded that Siemens renege on its agreement with the site’s Indian developer, Adani.

Last month, after several weeks of co-ordinated protests outside company premises and a social media uproar spurred on by high-profile activists such as Greta Thunberg, Mr Kaeser announced that there was “no legally and economically responsible way to unwind the contract”.

Mr Kaeser, who is due to step down in 2021, insisted that “protests alone won’t solve anything” and emphasised that Siemens was helping its customers reduce their carbon emissions.

Given the company’s commitment to reduce emissions by 50 per cent by the end of the decade, he added, “it is almost grotesque, that a signalling project in Australia became a target for activists”.

But speaking in front of hundreds of shareholders in the Olympic Hall, institutional and retail investors rounded on the Bavarian boss for failing to foresee the fallout.

“One thing is clear: the Adani case was a communications disaster,” said Vera Diehl, a portfolio manager at Union, which represents German co-operative banks.

“If all environmental and reputational risks had been carefully examined, Siemens would never have signed this order,” she added, before asking: “Must a catastrophe occur before the company finally understands that coal has no future?”

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Winfried Mathes from Deka, which holds almost 9m Siemens shares on behalf of German savings banks, said the “incomprehensible” decision was “threatening to cause massive damage” to the company’s image.

Opening the meeting, Siemens chairman Jim Snabe conceded that “business must fundamentally reinvent itself” and “pay more attention to the environmental impact of investment decisions”.

But protesting outside the event, 23-year-old Luisa Neubauer, who refused an offer to join a Siemens’ board and is a figurehead in Germany’s Fridays for Future movement, founded by Ms Thunberg to protest at the lack of climate change legislation, said Mr Kaeser’s “understanding of corporate responsibility is stuck in the last century”.

“Companies such as Siemens must have a clear plan for how they will phase out fossil fuels,” she added.

Addressing the annual meeting inside the hall, Varsha Yajman, a 17-year-old Australian activist, said Siemens’ coal-related contract was a “slap in the face” to those who had lost their homes in the recent fires.

In response to activists, Mr Kaeser pledged that Siemens “would assume a leadership role” in the fight against climate change, and pointed to the growth of the company’s renewable energy business.

“We are in complete agreement as far as the diagnosis is concerned, but so far, only we have started with the treatment,” he said.

On Tuesday, Siemens announced it would spend €1.1bn to take control of the Spanish wind-turbine manufacturer Gamesa, and make the company “a vital cornerstone” in the transition to emissions-free energy.