Productive cooperation between the Net Zero Engagement Initiative and Veolia regarding Veolia's climate plan

Since February 2023, investor signatories of the Net Zero Engagement Initiative (NZEI) have been working with Veolia Environment S.A to strengthen its climate action plan, which was later approved in July 2024 by the Science Based Targets initiative (SBTi) and rated “Advanced” by Moody’s.

The engagement group of seven investors worked closely with Veolia in support of a shared goal: a climate action plan aligned to the growth objectives of Veolia’s “Green Up” strategic program, with the potential of contributing to global efforts to reduce greenhouse emissions while also improving risk adjusted returns for investors.

The group was led by Francois Humbert, Engagement Lead Manager at Generali Asset Management, and included ERAFP, Allianz Global Investors, EOS at Federated Hermes Limited, Phoenix Group, and the Pension Protection Fund.

The scale of NZEI, which has grown from 93 to 115 signatories since its launch in 2023, further highlighted the importance of climate risks and opportunities to investors.

NZEI signatories met with senior leaders at Veolia in a series of meetings and workshops, sharing resources to outline investor expectations of a company transition plan, including:

• A pedagogical explanation and breakdown for each business
• Emissions trajectory and contributing levers
• Disclosures on coal in Central and Eastern Europe (CEE) and China
• Related climate governance

This interaction added value for the company, which had already been formulating the plan before it received a letter from NZEI signatories in February 2023.

The plan, published in February 2024, includes targets for a 50% reduction in scope 1 and 2 emissions by 2032 and a 30% reduction in scope 3 emissions by the same year, compared to 2021 levels, signalling an important step towards Veolia’s 2050 net zero commitment.

The climate action plan also includes details on the organisation’s governance practices, risk management policy, and performance indicators, meeting requirements from the Task Force on Climate-related Financial Disclosures (TCFD). Veolia invested €650 million in its climate strategy between 2018 and 2024 and has pledged a further €950 million by 2030.

Sophie Duval-Huwart, Veolia Head of Strategy, and Guillaume Darmouni, Veolia previous Head of Climate, led the engagement from the company side.

Starting from March 2025, following new EU Corporate Sustainability Reporting Directive (CSRD) requirements, Veolia will report operational emissions which are not under its financial control under scope 3 (initially scope 1&2), in line with its financial reporting and as approved by auditors. Veolia has therefore updated its climate plan accordingly on 31 March 2025. Veolia’s targets remained unchanged. Veolia has resubmitted its targets to SBTi for a formal re-approval.

Together, Veolia and NZEI signatories agree to continue the dialogue and encourage progress on the role of avoided emissions, or scope 4; the European coal exit plan and decarbonisation of coal assets in China; improvements in methane capture; and how different parts of the transition are reflected in Veolia’s investments.

Francois Humbert, Engagement Lead Manager at Generali Insurance Asset Management, as lead of the engagement group said: “We would like to congratulate Veolia for the very significant work performed to publish the Veolia Climate Report, issued in February 2024 and the subsequent SBTi approval in July 2024 along with the “Advanced / NZ-2” transition plan rating from Moody’s.

"We believe that this is one of the most comprehensive climate reports we have seen in recent years, including a pedagogical explanation and breakdown for each business, emissions trajectory and contributing levers, disclosures on coal in CEE/China and related climate governance. Following the CSRD implementation, we take note of the scope changes, we welcome the clarification which was expected, and we look forward to the SBTi re-validation. We will continue to work with the company on avoided emissions, coal in China, methane, the various business models of the transition, and related improvements in reporting.

“This positive outcome was helped by the joint work started in early 2023 between our group and Veolia’s strategy, climate and investor relation teams, who we thank for this very fruitful partnership. The Net Zero Engagement Initiative helped us demonstrate formally that climate is important for many investors, while gathering a sub-group to work with Veolia.”

Emmanuelle Menning, Deputy CEO Finance & Purchasing at Veolia said: “Veolia is the first company to obtain double validation of its climate commitments by two leading international rating agencies. The dialogue initiated with NZEI was an important step for us to build our communication and strengthen the display of our climate strategy for the release of our Net Zero Engagement.

"The collaborative process with NZEI gave us the opportunity to get valuable insights on the expectations and needs of the investor community regarding our climate strategy and a better understanding of the diversity of counterparts on the investor side. We valued the opportunity to get feedback and transparent exchanges with investors from the NZEI during the process of drafting our communication on the topic as well as the sharing of best practices. It's very important for us to work with all our stakeholders to become the leader in green finance.

"Concretely, the constructive dialogue engaged with the NZEI investors group led by Generali AM was useful to the drafting of our climate reports and helped us calibrate the level of details but also of explanations which were necessary to make our decarbonisation plan as clear and understandable as possible for the investor community. This led to more detailed disclosure notably on our Coal Exit strategy in Europe and our Methane Capture plan, for instance providing more granularity on investments and CO2 reduction at asset level.

"We are pursuing our collaboration and discussing specific topics such as the decarbonisation of our coal-fired assets in China, the importance and recognition of scope 4: we appreciate the opportunity to have open and pragmatic discussions on these topics. Veolia was the first Group to display erased emissions for its clients.”

Pierre Devichi, Head of Responsible Investment at ERAFP, as supporter in the engagement group said: “We are very pleased with the high level of this engagement, leveraging participants' expertise to develop a shared understanding of each party’s constraints and objectives. This has generated significant value, notably for strategic areas such as the coal exit plan.”

Peter Taylor, IIGCC Corporate Programme Director said: “Building on Veolia’s commitment to develop a transition plan, investors entered a dialogue with the company through NZEI to underscore the importance of climate risks and opportunities and to provide input on the plan. The positive reception further highlights this as a successful disclosure, made stronger by the joint work between Veolia and investors.

“NZEI offers the ‘how’ for investors looking to engage with public companies that are critical to the energy transition, and with more than 100 signatories and counting, it makes clear that investors take climate seriously. With many more companies on its focus list we look forward to further positive outcomes in the coming months.”

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 About IIGCC

IIGCC is an investor-led membership organisation. We bring the investment community together to make progress towards a net zero and climate resilient future. We work with our members to create guidance, tools, frameworks and resources that can help them, in their individual contexts, in managing climate-related financial risk within their portfolios and making the most of opportunities presented by the transition towards a decarbonised global economy and the realities of a changing climate. We have 400+ members across 27 countries representing over €65 trillion in assets under management. More information at www.iigcc.org

About NZEI

NZEI is a global, investor-led initiative launched by IIGCC to help investors align more of their individual portfolios with net zero pathways through corporate engagement. The initiative began in March 2023 when 107 companies received personalised letters from 93 investors, outlining their expectations for a robust company transition plan. Now in its second year, the initiative has expanded to engage 160 companies with 107 investor signatories.

Designed for scalability, NZEI updates its company focus list annually, integrating the latest thinking to support impactful engagement. Know more

 About VEOLIA

Veolia group aims to become the benchmark company for ecological transformation. Present on five continents with 215,000 employees, the Group designs and deploys useful, practical solutions for the management of water, waste and energy that are contributing to a radical turnaround of the current situation. Through its three complementary activities, Veolia helps to develop access to resources, to preserve available resources and to renew them. In 2024, the Veolia group provided 111 million inhabitants with drinking water and 98 million with sanitation, produced 42 million megawatt hours of energy and treated 65 million tonnes of waste. Veolia Environnement (Paris Euronext: VIE) achieved consolidated revenue of 44.7 billion euros in 2024. www.veolia.com