The discussion about the faster spin-off of RWE's lignite activities is now also reaching the Supervisory Board.

In a letter to the chairman of the committee, Werner Brandt, the activist shareholder Enkraft expressed his displeasure at the hesitant action.

"Unfortunately, the public statements made by the Executive Board and statements made in previous discussions with us do not indicate that the Executive Board is responsibly driving forward what is probably the most strategically important issue for RWE, the separation and cessation of lignite activities, with the necessary urgency and transparency," says in the writing.

Inken Schoenauer

Editor in business, responsible for the financial market.

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The mere reference to ambitious long-term investment goals in the field of renewable energies and the associated transformation process initiated is not enough to maintain RWE's competitiveness and to ensure RWE's sustainable, long-term success on the capital market.

At the end of 2021, Enkraft, a company managed by the investor Benedikt Kormaier, asked the RWE Executive Board to tackle the realignment more quickly.

When asked about this in a FAZ interview at the end of January 2022, RWE CEO Markus Krebber said: “We agree with Enkraft on the goal.

Of course we want to create higher values ​​for our shareholders and improve the course.

But we do not agree on the right way to get there.” The concern is to phase out the lignite in agreement with politicians and after weighing up all interests in an orderly process.

"A company cannot simply ignore issues such as security of supply, employee protection and the impact on the regions." Krebber said that he could only warn against trying to use a crowbar and thus opening up dangerous conflicts.

Enkraft boss Kormaier now writes that it is "at least doubtful"

Only limited critical discussion

The activity report for 2020 suggests that the supervisory body focused primarily on the formal aspects of its function and that the management board only critically examined the strategy and its timing in terms of content.

The impression is reinforced that the Supervisory Board only marginally deals with the major strategic issues facing the Group.

RWE has one of the world's largest portfolios of renewable energies and has announced that it will invest EUR 50 billion in this area over the next eight years.

"Nevertheless, there is hardly any relevant expertise on the supervisory board," writes Kormaier.

This also applies to experiences in companies that are exposed to a rapidly changing market environment,

Brandt, as chairman of the supervisory board, should come to an honest assessment with the individual members together with the other members of the nomination committee before the invitation to this year's annual general meeting as to whether the supervisory board as a body and the individual members on the shareholder side are capable and also willing to appoint the executive board to support you in the upcoming fundamental, structural and strategic decisions.

According to earlier information, Enkraft holds more than 500,000 shares in RWE.

That's a comparatively small number in relation to the energy giant's more than 672 million shares outstanding.

However, 500,000 is an important threshold because a shareholder can – by virtue of the German Stock Corporation Act – influence the agenda of the general meeting.