Linde

Linde is a global leader in industrial gases, supplying products for applications that deliver positive impact, including healthcare, water treatment, and improving energy efficiency in buildings and manufacturing. Despite these benefits, Linde was one of the WHEB Strategy’s largest financed emitters, accounting for between 25% and 60% of portfolio emissions during its inclusion. This made the company a priority for climate engagement, particularly on reducing Scope 1 and 2 emissions.

Investor objective: Limiting material negative social or environmental impacts.

Engagement objectives: 

• Drive substantive reductions in greenhouse gas emissions across all scopes.

• Accelerate decarbonisation of fossil-fuel-based air separation units (ASUs).

• Expand renewable power purchase agreements (PPAs).

• Align public policy activities with climate goals.

Activity: 

Since formalising our net-zero carbon (NZC) commitments in 2019, we engaged Linde extensively. Key milestones included, establishing a Board-level sustainability committee, adoption of an SBTi-validated NZC target and a faster carbon reduction timetable and constructive dialogue at the 2025 AGM, where we pressed for electrification of ASUs and expansion of renewable PPAs.

Despite visible progress, financial fundamentals ultimately drove the decision to sell. Concerns about margin expansion and loss of share price momentum outweighed the investment case, even as engagement continued.

Prior to divestment, we wrote to Linde, thanking the company for over a decade of constructive dialogue and highlighting areas for further action, including:

• Electrifying remaining fossil-fuel ASUs.
• Scaling renewable PPAs.
• Developing blue and green hydrogen markets.
• Strengthening alignment between public policy and climate objectives.

Outcome:

The sale of Linde reduced the portfolio’s financed reported emissions by 38% compared to the previous quarter. However, this improvement is largely optical, Linde’s real-world emissions remain unchanged. This underscores the tension between portfolio-level reporting and actual decarbonisation impact.

From an engagement perspective, the exit felt premature. Linde had made meaningful progress but still faced significant challenges in reducing absolute emissions. While divestment is typically a last-resort escalation tool, in this case it was driven by financial fundamentals rather than stewardship concerns. Linde remains in our investment universe, and we continue to support collaborative initiatives such as the IIGCC Net Zero Engagement Initiative and ShareAction’s Chemicals Decarbonisation Working Group.

Selling Linde does not mark the end of our climate stewardship journey. It highlights the complexity of balancing financial performance with sustainability objectives and the limitations of divestment as a tool for real-world impact. We remain committed to engaging the portfolio’s top emitters, now reshaped following Linde’s exit, to drive meaningful decarbonisation and maintain progress toward our NZC targets.