BMW (BAMXF), Daimler (DDAIF) Sued Over Inadequate Climate Goals
BMW AG BAMXF and Daimler DDAIF are being sued by a German environmental group for refusing to strengthen their carbon emission goals.
The heads of Deutsche Umwelthilfe (DUH), a non-governmental organization (NGO), have filed a lawsuit application to courts in Stuttgart and Munich. The DUH argues that the two German carmakers need to set more ambitious climate goals, including terminating the sale of fossil-fuel cars by 2030. While the car giants have plans to shift from petrol and diesel vehicles to green modes of communication, the plaintiffs contend their strategies are inadequate to meet the global climate targets.
Per the DUH, the car giants are quashing the climate protection and the Paris agreement by manufacturing highly polluting vehicles.
The story dates back to early September when the DUH and another climate group, Greenpeace, sent letters to the two carmakers as well as Volkswagen VWAGY and the gas company, Wintershall, requesting them to enhance their climate goals and set more aspiring zero emission targets, such as ending the sale of fossil-fuel vehicles by 2030.
This was followed by BMW and Mercedes-Benz maker, Daimler, declining to sign the climate organizations’ proposals. Daimler stated that it was in clear acceptance of the targets in the Paris climate agreement and the need for an electric future in the auto industry. BMW responded by saying that it had taken charge of its responsibility and the company’s climate targets were already at the forefront of the industry, wherein it is making significant contribution with regards to tackling the aggravating climate-change concerns. It also claimed that its carbon neutrality goals were in sync with the ambition of keeping global warming under 1.5 degrees. Volkswagen has until the end of October to respond to the letter.
The refusal of BMW and Daimler to accept the NGOs’ demands triggered the lawsuit filing by the environmental activist groups.
This is a unique case in Germany and is based on a recent milestone ruling by the country’s constitutional court. In April 2021, Germany's constitutional court passed a judgement that the country's plans to curb carbon emissions were inadequate to meet the targets of the Paris climate agreement, which places an unjustified load on future generations. The ruling forced German Chancellor Angela Merkel's government to advance its date for carbon neutrality by five years to 2045, and raise the 2030 target for greenhouse gas reductions.
Daimler and BMW, which share the space with auto biggies like Ford F and General Motors, both currently carry a Zacks Rank of 3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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