Climate Policy Engagement Overview: Covestro appears to support climate change policy globally, with some exceptions regarding specific EU policies. The company seems to be actively and mostly positively engaged on high-level climate policy issues. However, the entities’ engagement with specific climate policies at EU level between 2021-23 is somewhat limited, Covestro taking negative positions on the Carbon Border Adjustment Mechanism (CBAM), Emissions Trading System (ETS). The CEO holds influential positions in several industry associations, including the Federation of German Industries (BDI), the German Chemical Industry Association (VCI), and the European Chemical Industry Council (CEFIC).

Top-line Messaging on Climate Policy: Covestro has expressed general high-level support for climate policy ambitions in its top-level messaging, with a few exceptions. On its corporate website, accessed in November 2022, the company supported GHG emissions reductions in line with 1.5°C target. In its 2021 Annual Report, published in March 2022, the entity expressed support for a climate neutral global economy by 2050 as well as the Paris Agreement. However, in a December 2022 social media post, the entity emphasized that climate policy should not put industry under more pressure and in September 2021, CEO Markus Steilemann advocated against governments regulating industry on climate matters.

Engagement with Climate-Related Regulations: In its limited engagement on specific European and German climate policies, Covestro has engaged mostly supportive yet with some exceptions in 2021-23. In an open letter signed by energy intensive industries in June 2022, Covestro advocated against the EU Parliament Environment Committee’s proposal to increase ambition of the EU's Carbon Border Adjustment Mechanism and the EU Emissions Trading System reform, stressing risks of carbon leakage. However, in its 2021 CDP Climate Change Disclosure, Covestro stated support for increasing energy efficiency in buildings in Europe and for increasing renovation rates. In a December 2021 interview, Covestro CEO Markus Steilemann advocated for the German government to expand renewable energies rapidly, criticizing the slow speed in the past. Furthermore, the CEO called for] a 50% GHG reduction target in the United States by 2030 in an April 2021 interview.

Positioning on Energy Transition: Covestro appears to take generally supportive positions on the energy transition, with minor exceptions. In a June 2022 press release, the company supported switching from fossil energy sources to renewables, alongside the electrification of sectors like transport and buildings. Furthermore, in May 2022, the CEO advocated for a phase out of fossil fuels in Europe, in response to reducing dependency on Russian fossil fuels, and in March 2022 he advocated for the chemical industry to phase out carbon made from fossil fuels and a shift towards alternative feedstocks. The company supports the use of green hydrogen in the transformation of the chemical sector, as stated in a January 2022 press release. However, in a social media post in January 2023, Covestro supported new fossil gas infrastructure in Germany.

Industry Association Governance: Covestro has disclosed only limited information on some of its trade association engagement in its 2021 annual report. It has not published a review of its indirect engagement. The company has not published a dedicated review of its industry association memberships. Covestro holds board-level membership of a number of trade associations, including the European Chemical Industry Council (Cefic), the German Chemical Industry Association (VCI), and the Federation of German Industries (BDI), all of which take unsupportive positions on ambitious climate change policy in the EU and Germany respectively. In addition, Covestro is a member of the strategically negatively engaged German Association of the Automotive Industry (VDA).