Yes, yes, shareholders. Good afternoon, and welcome to the Ordinary AGM of ROCKWOOL 2021. I wish we could all be here in the flesh, but due to the circumstances, that is still not possible. We still follow the guidelines issued by the Danish authorities to take care of personal safety, and we look forward to your backing and support. I dearly hope that next year we can be together again in an ordinary physical meeting. In pursuance of Article 7A of the Articles of Association, we have decided to appoint Attorney at Law Niels Heering as chairman of our meeting. I hand over to the chairman of the meeting.
Thank you very much for appointing me chairman of the meeting. This meeting is sent directly through a webcast on the website of ROCKWOOL. It will be recorded, and it will therefore be available on the website after the meeting.
First of all, I'd like to find out about the legality of the convening of the meeting and whether it is quorate. The convening notice was published on the company's website and on Nasdaq Copenhagen on the 11th of March. On that same date, it was sent to all shareholders having requested such a notice to be sent to them. The mode of convening the meeting prescribed in the Articles of Association had thus been complied with, and it contained all the information that is required under the Danish Companies Act and the Articles of Association, and all the information about the meeting since the convening was announced had been made available on the company's website. Then there is the question of whether we are quorate with regard to the business to be transacted. So let's have a look at the agenda. It is now on the slide.
First, we will have the report from the board of directors on the company's activities during the past financial year. Two, presentation of annual report with audit report. Three, adoption of the annual report for the past financial year and discharge of liability for management and board of directors. Four, presentation of an advisory vote on the remuneration report. Five, approval of the remuneration paid to the board of directors for 2021-2022. Six, allocation of profits according to the approved accounts. Seven is election of members to the board. Eight, appointment of auditors. Under nine, we have a number of proposals from the board of directors and shareholders. From the board of directors, we have three proposals. We'll get back to them when we reach that item on the agenda, and that also applies to the two proposals we have from shareholders. We'll get back to them later.
The agenda contains all the items that must be contained in an agenda at an AGM according to the articles, and then we have the proposals. When we look at 9B and 9C, to be adopted, the proposals here require the presence of minimum 40% of all voting rights in the company. That is in order for us to be quorate, and the support of minimum two-thirds of both the votes cast and the share capital represented at the AGM. And I can inform you that today, although we are not an awful lot of people present physically, 89.7% of the total voting rights are represented here, and 72.45% of the total capital is represented one way or another. So the requirement with regard to being quorate has been met. All other proposals only require a simple majority, and the vote under item four, the remuneration report, is only advisory.
I find that the AGM has been legally and lawfully convened and is quorate with regard to all the business on the agenda. So let's move on to the items. For practical reasons and because they are interconnected, and since we have no one physically present in the room apart from a small group, we will deal with items one, two, six in one go so that we have the board of directors' report and the annual report in one go. So Mr. Kähler, the chairman of the board, will deal with this, and then it will be possible to put questions. But since we have no physical presence apart from us three, we will do this in a slightly different manner from usual. I will then present other proposals under items four to six until we go to the formal approval.
So I will now hand over to the Chairman of the Board, Thomas Kähler.
Tak for det. Thank you very much. Dear shareholders, it is hard to believe, but it was just three weeks before our last general meeting that the WHO declared that the COVID-19 outbreak was a global pandemic. At that time, markets were falling, and the global health crisis had become an economic crisis. Nationwide lockdowns, shutdowns of some sectors of the economy, rising unemployment, billions of DKK in government relief packages, well, that became the new normal. There was considerable uncertainty regarding market developments, but we have shown strength and resilience in our company. I'm proud of the way management and employees have handled the crisis. ROCKWOOL's employees turned their homes into offices, schools, and childcare centers. They quickly adapted to new online tools and ways of working, and also to inconvenient but important new habits for keeping each other safe.
All while continuing to do their job, we achieved the highest-ever customer satisfaction score in 2020, and that shows us that despite the new ways of working, we did succeed in servicing customers skillfully and efficiently. Society is gradually coming back from this health crisis and economic crisis, but the global community has not solved the biggest crisis, the climate change crisis. Fortunately, our company is in a fortunate position. We can help with that challenge via building renovations and more energy-efficient facilities. The pandemic has obliged us to look critically at the spaces we work, live, and learn and recover in. We need homes, offices, schools, hospitals that are fire-safe and energy-efficient, and obviously, hopefully, they should be made from sustainable materials. That's far from being the case today, but renovation can make it possible. Renovation also creates local jobs.
It makes urban spaces more attractive to residents and workers and cuts energy consumption and emissions, and we know buildings are one of the biggest sources of emissions. We develop products that make a positive impact on people's lives. We call it We Enrich Modern Living, and we really mean that. We have considerable opportunities. We can help solve these challenges in the short and long term. Our products contribute positively towards saving energy and reducing global emissions, but obviously, we also focus a lot on decarbonizing our own processes. I'll come back to that in a minute. Despite the global pandemic, we have delivered good results of the year under review. We focused on safety. We adjusted capacity and operations to specific market conditions, and we strengthened our work in online sales, service tools, and options for customers.
Despite some virus-related delays, we continued our investments in new capacity and green melting technology. Our ongoing factory project in the U.S. is expected to start operations later this year. Successful pilot for electric melting technology in Moss in Norway started in December last year, and the expansion of our factory in Neuburg in Germany was completed in June last year. We also made two minor acquisitions. A Swedish company that makes acoustic ceilings. They're now part of ROCKWOOL, and we've acquired a Singapore company based there and specializing in fiber detection and insulation. Jessica Jonasson became a new Senior Vice President for Human Resources last year, and on the 1st of May this year, Anders Kristensen, who will become our Senior Vice President for the Systems Division. So these are two new faces.
At the end of 2020, we announced our new ambitious decarbonization targets and committed ourselves to the science-based target initiatives. These targets commit ROCKWOOL to reduce the life cycle greenhouse gas emissions by one-third by 2034. The target also includes a reduction of absolute emissions, so we must reach considerable carbon reductions per ton of wool produced in order to take into account the emissions that will result from our expected growth in the period. Such targets are really challenging for an energy-intensive company such as ours, and it requires considerable effort to reach them. But it is important. It's an important commitment. We must have a platform where we can show the way for decarbonization and sustainable growth. Our partnership with SailGP started very well before the pandemic knocked it off course. But again, we adapted.
We established a new initiative, Team ROCKWOOL Racing, so that the athletes in SailGP team, these athletes, they continue training, and we strengthened our cooperation. SailGP is an exciting sport. We can use it to create more awareness of our brand and our sustainable story. We are proud to be a sponsor, proud sponsor of the Danish SailGP team. And when in Bermuda later this month, the 2021 season will start, and the race will actually come to Aarhus, Denmark, in August this year. Now, okay, let's have a look at our sustainability results. We published our sustainability report on the 18th of March for 2020. It gives a comprehensive overview of the impact of our company and our products on society and what we do to increase positive benefits while reducing the environmental impact from operations.
To ensure data quality, our sustainability goal performance was externally verified for the first time in 2020. The big news story in this year's sustainability report is our global decarbonization commitment. I mentioned that before. We're one of the few energy-intensive manufacturing companies whose decarbonization targets have been verified and approved by Science-Based Targets Initiative, the SBTI. We chose to cooperate with SBTI because we believe it's important to have an independent verification tool and system to ensure our goals are science-based and help achieve the goals of the Paris Agreement. It's also important to ensure that the public can have confidence in our goals. SBTI allows us and others to hold us accountable because there is a scientific base to decarbonization there.
SBTI is a well-respected collaboration partner between CDP, formerly known as the Carbon Disclosure Project, the World Resources Institute, the World Wildlife Fund, or the Worldwide Fund for Nature, as it's called, and the United Nations Global Compact. The sustainability report also has many inspiring examples of how products can make a difference in people's lives in the communities where they live. It's a great reminder of the many applications and benefits we've discovered over the years through constant research and development of our core material, stone wool. We made good progress towards our sustainability goals in 2020. We strengthened the sustainability of our business by meeting or exceeding two of the six interim goals two years ahead of schedule. Those two goals are the reduction of production waste going to landfill by 40%. We reached 50%, and improvement of water efficiency at our factories by 10%.
We reached those two ahead of time. We also made good progress on two of the remaining four. We had fewer lost-time incidents in 2020 than in 2019, but we did not quite reach the goal for the LTI rate. That's incidents based on the number of hours worked. But again, the safety of our colleagues and others working at our locations, at our sites, that's always our highest priority. Trucost, that is part of S&P Global, for the second time around, have classified all of our products as SDG positive. So they contribute positively towards achieving the UN Sustainable Development Goals. Furthermore, we expect that we estimate that 95% of the revenue from our insulation business is taxonomy eligible in the EU Climate Mitigation category. So we do contribute to sustainable development in Europe, and we support our positive impact on the environment.
So we strengthen our position among customers that really focus on ESG, and we help contribute towards a more sustainable society. Before I move on to our financial results, I'd like to comment on a couple of other points. Technological innovation is going to be all important if we are to reach our decarbonization goal. We achieved two important milestones in 2020, specifically regarding our core melting technology. Based on our two Danish factories, we converted the largest melting ovens. We started using natural gas instead of coal, and that was possible because of many years' research and development and innovation by our engineers and our production teams. With the purchase of certified climate-neutral biogas from the start of this year, we've reduced our CO2 emissions in Denmark by more than 70% compared with 1990. Our work for innovative technology. We won an award last month.
The Danish Society of Engineers gave us that, the 2020 European Business Award for the Environment, and we can take pride in that. We're also proud that we are now using our first large electric melter in Moss in Norway. It's the biggest in the industry. This electric melter reduces CO2 emissions from Moss by 80% compared with the previous technology. The electric melter also makes it possible to melt greater amounts of recycled material so that the amount of waste going to a landfill is reduced by 99%. With this new technology, we can also recycle a significant amount of materials we receive back from the market. Earlier this year, we received a separate business award in Norway for the technological innovation we've carried out and the electric melter's contribution to environmental protection and reducing CO2 emissions.
So we hope to use that experience elsewhere also in our global operations in the years to come. After a sharp pullback in the second quarter of 2020, construction activities recovered in most markets in the second half of the year as countries emerged from lockdowns and governments focused on these relief packages. Many European countries understood that deep energy renovation of existing buildings, that is, an effective and efficient recovery vehicle, it creates jobs and stimulates spending and also contributes towards long-term climate goals. The sale of insulation materials for building renovations recovered faster than sales for new construction. This was particularly clear in Southern Europe where the market dropped significantly in the second quarter, but also bounced back quickly in the second half of the year. Constant pressure from legislators and consumers strengthened our demand for non-combustible building materials in the U.K.
Right then, let me move on to our financial results in the year under review. Despite the COVID pandemic, we had a satisfactory result. Net sales fell by 3.7% in local currencies. The EBIT margin was 13%. That was down 0.5% from last year, and our profit was EUR 251 million. That was a 12% decline from the year before. Sales in the insulation segment declined overall, mainly in the markets where there were these shutdowns because of the COVID pandemic. Sales were better in markets where construction stayed alive and was considered an important part of the recovery. The systems segment saw an increase in sales in 2020, primarily driven by a growth and a good second half year for ROCKWOOL and ROCKWOOL Panel in Europe. The return on invested capital was 17.6% compared to 21.7% in 2019 as a result of higher investments and lower profit.
At the end of the year, the group had a net cash positive position of EUR 95 million and unused committed credit facilities of EUR 630 million. On behalf of the board of directors, I want to thank our CEO, Jens Birgersson, the group management, and our 11,500 dedicated employees for the results. You have all contributed to achieving in a uniquely challenging year. You've done extremely well. Sterling effort. Thank you very much. Now, let's take a look in more detail at the different business areas and geographic regions. Globally, net sales were EUR 2.6 billion, a decline of 3.7% in local currencies. Foreign exchange rate had a negative impact on our revenue, 1.9%, because of the U.S. and Canadian dollars and the Russian ruble, resulting in a sales decrease of 5.6% in reported figures in 2020.
Regionally, sales in Western Europe declined by 4.8% in local currencies, even if the Nordic markets and the Netherlands showed good growth. Sales in Eastern Europe were down 2.1% in local currencies, but especially in Hungary, Romania, and Russia, they bounced back from the decline in the pandemic and delivered a full-year sale at the level or higher than 2019. The rest of the world, sales declined by 1.9% in local currencies. Sales in Asia affected by pandemic-related slowdowns in building activity, while in North America, insulation sales were overall flat. In technical insulation, there was a slowdown in the oil industry, particularly in the U.S. and in Asia. Sales in the insulation segment was EUR 1.9 billion, a decline of 5.8% in local currencies and 7.8% in reported currencies. That was mainly the reduction in Central Europe and in technical insulation.
Building insulation in North America ended 2020 with good growth despite the pandemic. The systems segment amounted to EUR 688 million, an increase of 2.7% in local currencies, including 2.4% from the acquisition of Parafon and 1.3% in reported figures. This growth was driven primarily by growth and a good second half year of the year for ROCKWOOL and ROCKWOOL Panel in Europe. The insulation segment in 2020 accounted for 74% of group sales. The systems segment was then 26%. In 2019, the split was 75/25. Compared to the outlook, the guidance we had in the annual report 2019, obviously the COVID-19 pandemic disrupted sales growth and market dynamics, especially in the second quarter, but sales then recovered partially in the second half of the year. The group EBIT was EUR 338 million in 2020, a 9% decrease from 2019.
The EBIT margin was 13%, that's a decrease of 0.5% at this point compared to 2019. Operational cost savings combined with lower raw material prices led to an EBIT increase of 9% in local currencies in the second half of the year. The EBIT margin full year to 13% was actually at the upper end of the latest guidance we've given because of good sales in December. Operational efficiency improved throughout the year as we continued to prioritize cost savings. This led to a focus on driving efficiency while still investing in new competencies, in digitalization, and growth initiatives, and that helped deliver improved profitability for the group as a whole.
There was a legal settlement to the North American ROCKWOOL case in 2019, but adjusting for that, the EBIT margin for 2020 was only 0.2% below the record year 2019, and that was mainly because of the negative currency impact. If you look at profitability per segment, the EBIT in the insulation business reached EUR 236 million with an EBIT margin of 10.7%. That was 0.6 percentage points down from 2019. Operational efficiency at the factories could not fully compensate the startup cost at the German factory, and then the electric melter project cost in Norway combined with the overall lower capacity utilization because of these sales decrease. In the systems segment, the EBIT was EUR 102 million with an EBIT margin of 14.8%, down 0.3 percentage points compared to 2019.
Adjusting for the positive impact from, again, this legal settlement involving ROCKWOOL in 2019, the EBIT margin increased 1.1 percentage points, and most businesses contributed positively. Now, due to the increased uncertainty because of the COVID pandemic and because we wanted adequate funding, ROCKWOOL decided to draw a loan of 150 million EUR. This allowed the group to maintain its investment program, pay out dividend to the shareholders, and carry out the share buyback program that had been adopted. As an extra security measure, an agreement was also reached to extend the guarantee credit facilities by a further 200 million EUR. At the end of 2020, the group had a net positive cash position of 95 million EUR, down 170 million EUR from 2019. In addition, the group had unused credit facilities worth 630 million EUR.
Cash flows from operating activities were 438 million EUR, up from 402 million EUR in 2019, and this indicates a stable inflow of cash from operations. Free cash flow flows were 76 million EUR, an increase of 74 million EUR compared to 2019, primarily due to lower investments and lower working capital. The investments in the year under review were 362 million EUR. This was a decrease of 38 million EUR compared to 2019, but that's in line with the most recent guidance we gave. Compared to our expectations, we announced in February 2020 some investment expenditure relating to ongoing factory projects in the U.S. and Norway and the relocation project in China. They were postponed from 2020 to 2021 because of COVID-related delays. The largest individual investments in 2020 related to the factory projects in the U.S., Norway, and Germany.
In December 2020, as planned, we received EUR 1 million extra grant from Chinese authorities in connection with the relocation of our factories in China, so the total grants received now amount to EUR 19 million. In February 2020, ROCKWOOL acquired Parafon Acoustic Ceiling. It's a Swedish ceiling tile factory and its Nordic sales organization that are now part of ROCKWOOL in our systems segment. In September 2020, ROCKWOOL acquired the assets of Best o fire & Thermal Pte Ltd, a Singapore business that specializes in supplying fire protection and thermal insulation in the marine sector and the building sector in Singapore. They are now part of our insulation segment. The consideration for both businesses was EUR 19 million in total. Both ROCKWOOL share categories saw increase.
The ROCKWOOL A Share was up 44% and the B Share 45% up, compared with a decline of 4% in the benchmark index STOXX Europe 600 Construction & Materials, and an increase of 34% in the Nasdaq OMXC25 index in 2020. In line with our policy to pay out a stable dividend, at least one-third of the net profit after tax, we are pleased to propose payment of a dividend of DKK 32 per share for the 2020 financial year. There'll be a formal vote, of course, later this afternoon. On the 6th of February 2020, ROCKWOOL started its first share buyback program, up to EUR 80 million, completed as planned 12 months later. In 2020, a total of 345,584 shares were bought back. The transaction value was about EUR 77 million. The ROCKWOOL Foundation participated proportionally to their ownership.
As part of this annual general meeting, the board of directors proposes that shares purchased under this program will be canceled. Now, if we take a look at the rest of 2021, COVID-19 and its variants will continue to be the primary challenge for global health and for a stable economic recovery. It's still too early to say about the anticipated acceleration of global vaccinations. This is encouraging, and we must expect that it'll have a positive effect on overall economic activity. So we do expect construction sites to remain open even if we were to see increasing infections because more and more governments understand. There are many governments that have recognized the economic climate and health benefits of building renovation. So there's focus on that. There's focus on non-combustible, recyclable building materials, and that will have a positive influence on our market, particularly in the medium to long-term effect.
There'll be a medium to long-term effect on our market. We are financially strong. Our core material has a growing number of applications and increasing relevance for society and the challenges it faces. We continue to invest in R&D and technology to improve our products and services so our business can be more sustainable, so we can best, as best as possible, meet customer needs and meet also society's expectations of us as a credible green company. In accordance with relevant legislative requirements, ROCKWOOL published its remuneration report for 2020 in connection with the annual report earlier this year, and there's going to be an advisory vote here at the AGM on the remuneration report. It has an overview of the remuneration allocated to ROCKWOOL's board of directors and executive management. The remuneration for the board of directors was EUR 728,000. Executive management, that was EUR 3,268,000.
The remuneration is in accordance with our remuneration policy that was approved at the general meeting last year. The remuneration can be seen from the presentation given, and there is more information in the remuneration report that you can find on the company's website. On behalf of the board of directors, let me conclude by thanking the corporate management, the executive management team, and all the employees for the hard work and solid results in a uniquely challenging year. Job well done, I must say. I also want to thank you, our loyal shareholders, for your continued support and investment in the ROCKWOOL Group. Thank you very much.
[Foreign language] . So we've heard the report from the board of directors, and we have received two written interventions. One is from Klaus Jørgen Sørensen, and I'm going to read it out because the shareholder is not present as recommended.
I'm quoting here. My name is Klaus Jørgen Sørensen. I represent the Danish Association of Shareholders. The Danish Association of Shareholders safeguards the interests of small and medium-sized shareholders. We work to develop a healthy share culture in Denmark. The Danish Association of Shareholders participates every year in a number of AGMs in Denmark to give information about our association's hallmarks and what we find important for shareholders. This year, we are focusing on good investor guidance in a time of COVID. We are focusing on succession planning and on whistleblower schemes, and I'll come back to that. Thank you to the board of management for the annual report and the review. The annual report is very thorough. It's about 120 pages. It covers an excellent summary and an excellent ESG report and an excellent corporate governance report.
The negative impact on the financial statements here because of COVID, so a decline of 12% compared with 2019. But it's positive to see the customer satisfaction is growing again. This is the sixth year in a row. Dividends, you're not changing that. You're proposing DKK 32 per share. It's about one-third of the net profit after tax. And compared with the share buyback of EUR 77 million, combined with that, this is certainly satisfactory. The Danish Association of Shareholders is pleased about the development in the price for the share. ROCKWOOL's B share increased by 45%, the A share 44%, much better than the OMXC25 with an increase of 34% and a decline of 4% in index STOXX Europe 600 C onstruction & Materials. Now, expectations concerning 2021 are subdued because of the impact of COVID-19, and you expect increased costs of energy. How have you converted?
How have you changed here with COVID? How do you guide investors now that there is so much uncertainty? What is ROCKWOOL thinking about how to best utilize this and how to make the best strategy? Succession planning. Even good management and good leadership needs new profiles. What is ROCKWOOL doing to ensure the talent, the young management candidates are prepared to take over from the current leaders when that time comes? The Association shareholders are happy to see that ROCKWOOL has a whistleblower hotline, and in 2020, there were nine incidents that are all being examined. Finally, let me wish Board of Management, employees, and shareholders a good 2021, and Thomas Kähler will give a reply to these questions.
Thank you very much. I'll try to give a reply. First, there was the question of how we have converted, how we have changed because of COVID-19.
The safety of our employees and servicing our customers have been the most important point for us. In 2020, we were quick. We adapted production to demand when there was a decline and when it came back up. We suspended our guidance for a period in 2020 when external factors made it difficult for us to predict how the market was going to get through the lockdowns. Our guidance for 2021, well, there's also uncertainty about when the markets will be back at the level before COVID, and there's also an assumption that green transition that requires a lot of funding will really take off, but in the coming years. There was the question of turning the situation into a strategy. Well, we believe energy efficiency and renovation of existing buildings will be an important growth potential for ROCKWOOL.
Also, because of our work with ESG and the adaptation of our marketing, we have ensured that we are in a favorable position when this important work is to be started across the countries in Europe and North America. And another question here had to do with talent development. We are developing a new succession plan. There's a new process for all layers of management in the organization, and it will be part of it, as are the processes that focus on developing and retaining talented employees. So we look at development potential at the same level and a higher level in the organization. We expect this initiative will make us even better at developing good candidates for leadership and specialist positions at all levels.
All we have a second written contribution from a shareholder, a shareholder by the name of Boris Reimann, and I will now read it out as I did with this one. In my capacity of shareholder for a long time and an analyst of fundamentals, I use accounts as a basis for my assessment of a company's health. This applies to both annual accounts and quarterly accounts. I can warmly recommend shareholders to study the accounts in general and ROCKWOOL's accounts in particular. If, as a shareholder, you wish to obtain more understanding of the figures, ROCKWOOL's accounts are a very good example, a textbook example, actually. I can only commend both board and management. It's wonderful to see that the high level of ethics that pursued for many years is continued. What is quality in accounts?
First of all, I wish to mention three tables: consolidated income statement, consolidated cash flow, and consolidated balance sheet. Operating income gives very important information about the company's operating profit, operating income. This is related to revenue, and this year this is 13%. That's a fine achievement because an average of the best performers found a couple of years ago was 14%. ROCKWOOL is really one of the good boys in the class, also at the international level. This is very important. It's the operating income table. Among the 25 large Danish companies, perhaps five behave properly and decently and include depreciation and write-downs in income statement. I'm sure internationally the performance is poorer. Other companies use all sorts of tricks to get depreciation and write-downs out of the way by putting them in the cash flow table.
This is a way of embellishing the operating accounts. Another example is balance, assets, and liabilities. One of the items is intangible assets. Intangible means something you cannot really grasp, such as goodwill and licenses. And in the accounts, you find total intangible assets, and the relationship here is 6.6%, a very fine low figure. This means that management throughout makes sure that an acquisition is followed up by write-downs. Thank you very much to board and management. You make sure that equity is not eroded. Companies use all sorts of tricks, and there are many of these companies, and they don't use write-downs. They book these amounts under intangibles. Many large companies have both 30%-40% in intangibles, and some call it hot air. This is very rarely described in the newspapers. They simply don't have the time.
If the poor-performing companies are to be put under pressure to behave decently, it requires better international standards, but standardization work in relation to IFRS is very slow. It would be fine if the CFO would tell the AGM about the development that ESMA is currently starting. This is the EU Financial Supervisory Authority, and this looks promising. It's going to be a pretty quiet affair this year at the AGM. I've tried now to blow a little life into it. And of course, Boris Reimann would like to have some replies to this from the CFO, but for reasons of COVID-19, the CFO is not present, so it will be the chairman of the board.
Thank you for the kind words. We appreciate it. Boris Reimann would like to hear more information about ESMA.
ESMA is the EU's European Securities and Markets Authority, and it works to increase protection of investors and create stable and well-organized capital markets. Among its objectives is to facilitate the implementation of a uniform and structured reporting taxonomy in the EU to enhance transparency of the capital markets and make data more easily accessible to analysts, investors, and other stakeholders. The compulsory implementation of the new digital taxonomy has been deferred to 2022 because of COVID-19. However, ROCKWOOL has decided to implement it already now in relation to the digital reporting. The digital annual report for 2020 is available on our website.
Thank you. Since there are no further contributions from shareholders, I will go over to the formal process in relation to items one to six that we have now been dealing with in one go.
Item one, the proposal is from the board of directors that the AGM makes note of the board's report, and I find that this is the case. Item two, we heard the report from the board of directors, and there is a proposal in item three that the annual report be approved and that members of board and management be discharged of liability. I can also refer you to the annual report page 109 to 111 for the unqualified audit report. There are no reservations, no additional information, and I also make the conclusion here that the annual report for 2020 has been approved. The board also proposes that members of board and management be discharged of their responsibility in relation to the annual report 2020, that too has been approved in the absence of objections or comments.
Item four, presentation and advisory vote on the remuneration report, and we know that the company has prepared a remuneration report for the year 2020, and according to the Danish Companies Act, it must be submitted to the AGM for an advisory vote. The board would like to point out that the report has been prepared in accordance with applicable legislation and applicable recommendations for good corporate governance and is intended to create more transparency in the reporting of remuneration to management, and it's available on the company's website. It includes remuneration paid to the company's board and management for fiscal 2020. The board proposes, of course, that the report be approved, and we have heard no objections, no comments, no questions, so I find that it has been approved in an advisory vote.
Item five, the board proposes that the AGM approve the remuneration to management in the period until the AGM in 2022, and we find the numbers on the slide now. The proposal is that the base fee for ordinary members be DKK 360,000, twice that amount to vice chairs, and three times that amount to chairs. Then there's an additional fee or remuneration if you are a member of the audit committee and the remuneration committee: DKK 300,000 for the chair, DKK 180,000 for members of the audit committee, and DKK 90,000 for members of the remuneration committee. It should be pointed out that the proposed level of remuneration is unchanged from last year. We have received no contributions from shareholders with regard to the remuneration level, so I take it that this has been approved.
With regard to item six, distribution of profit, the proposal is, as the chairman said, that a dividend be paid of DKK 32 per share of DKK 10. That is a total payout of EUR 94 million, and the proposal will, well, not only it's on the slide, but it's also available in the annual report in a number of places, for instance, page 57, 58, and 62, and here you see at group level the distribution of profit. We have heard no objections concerning this proposal, also the proposal for the payment of a dividend of DKK 32, so I find that it has been approved. Under Article 13A, board members are elected by the AGM for one year at a time. Søren Kähler has turned 70, so he will leave the board. This is in accordance with Article 13A.
Therefore, the board proposes the re-election of the other members of the board: Thomas Kähler, Carsten Bjerg, Andreas Ronken, Jørgen Tang -Jensen, and Rebekka Glasser Herlofsen, and that a new member be elected, namely Carsten Kähler. And I would also add that the board has three employees elected members: Connie Enghus Theisen, Christian Vesterberg, and René Binder Rasmussen. The background and the management positions of the candidates to board membership are available in annex one to the convening notice and also in the annual report on pages 52, 53. There is a duty to inform about this, and this has been done in the places I've just referred to. If these candidates are all elected, the board expects to appoint Thomas Kähler chair and Carsten Bjerg vice chair.
We have not received any comments to this proposal, so I find that Thomas Kähler, Karsten Bjerg, Andreas Ronken, Jørgen Tang -Jensen, Rebecca Glaser-Hallowsen have all been re-elected, and Karsten Kähler is a new member of the board. According to article 20, we also need to appoint an auditor for one year, and the proposal is for PricewaterhouseCoopers to be elected. The audit committee, it is stated in the convening notice, has not been affected or influenced by third parties and has not been subject to any agreements with third parties that will limit the AGM's election of certain auditors or audit companies. I find that PricewaterhouseCoopers has been re-elected. Item nine, a number of sub-items here: three proposals from the board of directors and two from shareholders.
The first proposal is from the board and has to do with authorization to acquire treasury shares, and as always, the proposal is for the company to buy treasury shares, both A shares and B shares, at a total nominal value of up to 10% of the company's share capital. Also, the proposal is that the share price paid for these shares must not depart more than 10% from the listed price at the time of the acquisition. I have not received any objections or comments, so I find that this proposal has been carried. 9B. This was also referred to by the chairman in his report. There's a proposal, also in continuation of the share buyback program, to reduce the company's share capital from a nominal amount of 219,749,230 to 216,207,090 by the cancellation of A and B shares that have been bought back.
As a consequence, there should be an amendment to Article 3A concerning the size of the share capital. The details were described in the convening notice and also appear on the screen. We have not received any contributions from shareholders in relation to this, so I take it that it has now been approved. 9C, the third proposal from the board of directors. The proposal is for the AGM to approve the amendments to the articles proposed by the board. There's a proposal to the effect that the board be authorized to decide to convene and organize future AGMs as completely electronic meetings in case extraordinary circumstances prevail, in case it is deemed appropriate, and that if it's possible to have the meeting in a safe manner. This should be a new Article 6F in the Articles of Association.
The second amendment to the articles of association concerns an update in relation to the remuneration report. In future, it will be presented on an annual basis for an advisory vote in the same way as we did it today, and therefore, it is proposed to amend article 10 by adding a new item four on the agenda with standard items for the AGM. I have not received any comments, so I find that this proposal has been approved, and now we go to 9D. Yeah, actually. So this is Timothy L. Ross, who has proposed that the company should prepare a population assessment that goes beyond the existing disclosures and those required by law of the results of the company policies and practices to minimize the adverse environmental or community impacts, particularly to children, from the company's siting and operation of its manufacturing facilities.
Such assessment and disclosure should be made at reasonable cost, and maintaining confidential information should be updated at regular intervals in line with changes in the company's footprint and operations. The full proposal and the shareholders' motivation are described in the complete proposals. The board has said they do not support the proposal. Mr. Ross has sent further motivation, and he has asked that I should read it out, and that will be in English. I quote. Dear Chairman, Board of Directors, and fellow shareholders, I regret once again that I cannot attend the meeting in person. I would very much like to present these remarks face to face, but safety and proper risk management prohibits my presence. I thank Mr. Heering, Chairman of the meeting, for presenting my comments to you this afternoon.
So you may better understand what I'm seeking, I will begin by reading my submitted proposal in part. So that, and that's a quote within the quote, so that shareholders can understand and manage risk more effectively as shareholder proposals that ROCKWOOL prepare and publish an assessment above and beyond existing disclosures and those required by law of the results of company policies and practices to minimize the adverse environmental and community impacts, particularly to children from the company's siting and operation of its manufacturing facilities. And now the response from the board of directors. Quote, "The board of directors appreciates the concerns expressed by the shareholder while noting this proposal is close to identical to the one submitted in 2019 and 2020, and reiterating that it believes that the company adequately discloses relevant risks and material impacts via its annual report and sustainability report.
The board of directors further notes that the company observes local and national regulations when locating new manufacturing facilities," unquote from the board's response. And back to Mr. Ross, "When I saw the director's response, I said, 'Well, let's take a look at the documents the board refers to and see the relevant risk and material impacts they considered.' First, this is how the risk and material impact are determined." I quote from the 2020 annual report. "All managing directors and our subsidiaries and group functional heads must ensure that the risk review within their areas of responsibility is conducted at least once a year and that risks are discussed, described, scored for severity and likelihood, and quantified in terms such as predicted financial impact." Unquote from that.
Note that nothing prohibits evaluating the risk facing the company more than once a year, and the statement seems to encourage to do so. The company found that in 2020, the most likely risks with the highest financial impact were climate risks, competition law compliance, and cyber threats. The change from 2019 was to drop financial risk and corruption and bribery while adding climate risk. Only these three risks are disclosed and discussed with investors even after a shareholder has brought a specific risk to the attention of the board of directors two years in a row. No discussion of the company's approach to ensuring appropriate risk management is occurring even after the pandemic underway is still having an impact on the company. I take no comfort in the board's response and the very limited disclosure of the risk faced by the company.
The second reason the board gave for voting against my proposal was, quote, "The board of directors further notes that the company observes local and national regulations when locating new manufacturing facilities." Unquote. Back to Mr. Ross's motivation. A major point of my proposal is that the board should prepare and publish an assessment above and beyond existing disclosures and those required by law. Please note that the proposal doesn't just ask ROCKWOOL to follow local and national regulations, but that the disclosure and assessment of the results of the company's policies and practices on siting and operating its manufacturing facilities should comply with the relevant portions of OECD Guidelines for Multinational Enterprises and relevant guidance thereto. In other words, international guidelines. The company states on page 35 of the annual report that we continuously aim to minimize the impact of our processes on people and the environment.
For some environmental areas, we have internal mandatory minimum requirements in case where our own requirements exceed legal requirements, our standards prevail. That was from the annual report. And back to the motivation. How can you aim to minimize the impact on people and the environment when there is no policy in place to consider the impact on the very bedrock of community, its children? For instance, no environmental impact statement was performed in Jefferson County, West Virginia, prior to locating the new factory very close to several schools, and the directors have rejected my proposal to adapt a policy to disclose the results of the company's management of such impacts.
Without the policy, I have proposed the company is setting itself up for the same problems in their next location that they have encountered in Jefferson County, especially now that the issues have been raised by U.S.-based activists who are making their concerns widely known. I'm talking about environmental justice here. There is a huge financial and public relations risk to the company. If school children are impacted, then the possible monetary risk will increase every time ROCKWOOL insists its current policies are good enough. The company's current position is that if they build another factory next to a school, to a school, they will follow the same process they have followed in the past. Looking at their experience in Jefferson County over the past three years, adopting the policy I propose seems like a financially smart thing to do.
Perhaps ROCKWOOL would have avoided a nearly two-year delay in starting production, could have avoided the cost and delays from numerous lawsuits and the international spotlight on the situation in West Virginia from the Washington Post and a very recent summary article in Vice News. Perhaps even decided to choose a better location if the policies I propose were in place. Accusations of environmental injustice will increase as more and more people realize that those benefiting from ROCKWOOL's products will primarily be in urban areas, while the poor neighbors of the factory will be the ones that suffer. ROCKWOOL boasts that over the lifetime of its product, they will save 100 times the carbon emitted in its manufacturing, but the company makes no mention of where that carbon will be emitted, and there is no mention of PM2.5 particularly.
In the case of Jefferson County, there is no mention of where 133 tons of PM2.5 will go. There are four schools within two miles of the factory in Jefferson County. Did ROCKWOOL investigate the hazards to children that would spend their entire school career feeling the impact of the factory emissions? No. And if ROCKWOOL had asked where the water for their factory would come from, they would have learned it would come from wells subtly acquired from the elementary school and poor neighborhood across the road. And now the acquisition of the school's well and thus ROCKWOOL's water is under litigation.
The great Danish philosopher Søren Kierkegaard wrote, "Life can only be understood backwards, but it must be lived forward." To me, this means that the best way to identify risk to the future might present is to look at mistakes and successes of the past and adjust your actions accordingly. I firmly believe that if Kierkegaard was a shareholder, he would support my proposal. But dead philosophers can't vote. Thus, I ask all of you to support my resolution and will close with a statement that I think is apropos made by a great American philosopher, Dr. Martin Luther King Jr. And the quote is here, "The time is always right to do what is right." Unquote. You should start now by doing a small part to treat people with dignity, courtesy, and respect. Thank you all for considering my remarks and proposal. And unquote. [Foreign Language]
I know that the Chairman of the Board would like to comment on that on behalf of the Board of Directors. So over to the Chairman of the Board.
Thank you for this intervention. Yes, I'm just going to repeat what the Board says. The Chair has already read it out. You can see it also in the material. We take it seriously. The worries are specified by the shareholder, but we also see that the proposal is practically the same as the one made in 2019 and 2020. The Board finds that the company appropriately gives information about relevant risks and significant consequences in the annual report and the sustainability report. Furthermore, the Board finds that the company does observe local and national rules and regulations when siting new production facilities. So the Board of Directors does not support the proposal.
Thank you very much. No other comments have been received to that. And on behalf of the proxies and personal votes received and the shareholders' votes, this proposal has not been adopted. It has been adopted by far more than 90% of the votes.
[Foreign language] . So let's go to 9E, a proposal from another shareholder, Kathleen Joswick. We are under 9E, and there's a proposal to the effect that the company prepare a report to be updated twice a year with information about policies and procedures in relation to the giving, referring, or incurring of contributions or expenditures to a participation or intervention in campaigns on behalf of or in opposition to a candidate to a public office, or b, to affect the general public or a segment of it in connection with an election or a vote, and monetary and non-monetary contributions and incurrence of expenditures spent in a similar manner.
The proposal is for the report to contain information about the identity of the recipient and the amount paid out and the title of the person or the persons in the company that are responsible for making the decision. The proposal is to publish the report on the website of the company within a 12-month period. The full proposal and the shareholders' motivation is described in the complete proposals. The board has announced that it does not support the proposal. We'll come back to that. And Kathleen Joswick has sent a brief motivation of the proposal. She has asked me to read it out, and I will do that. And this is in English. 2020, the heightened risk posed by engaging in political activity makes it paramount that companies adopt policies to govern their political participation and disclose political expenditures.
Whether a company is directly contributing to or spending in elections or indirectly participating through payments to political or advocacy organizations, formal policies commit senior management and directors to responsible participation in national politics. Such transparency and accountability in corporate electoral spending allows for the exercise of appropriate oversight over actions that otherwise can create material risk to the reputation and financial position of the company. Relevant actions include contributions and expenditures on any activity considered involvement in local political activities under the OECD Guidelines for Multinational Enterprises or intervention in political campaigns under the U.S. Internal Revenue Code or similar legal or policy frameworks globally, such as direct and indirect contributions to political candidates, parties, or organizations, and independent expenditures or electioneering communications on behalf of local, state, provincial, or national candidates. Disclosure is in the best interest of the company and its shareholders.
The U.S. Supreme Court recognized this in its 2010 Citizens United decision, which said, and there's a quote, "Disclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages." Unquote from the decision. While the company publishes certain information about its sustainability and ethics programs, such as its whistleblowers' hotline, it does not currently disclose sufficient information, if any, about its expenditures in election-related spending from corporate funds. In relation, relying on publicly available data would not provide a complete picture of the company's electoral spending. For example, the company's payments to non-governmental organizations or trade associations that may be used for election-related activities in support of opposition to local voting for candidates or issues are undisclosed and unknown.
This proposal asks the company to disclose all of its electoral spending, including payments to trade associations, advocacy groups, and other organizations which may be used for electoral purposes. Particularly in the United States, which is a target market for the company's expansion, this proposal would bring our company in line with a growing number of leading companies, including over 332 companies or over half of the U.S. S&P 500 that disclose some or all of their election-related spending or that prohibits at least one type of such spending. For these reasons, we urge your support for this critical governance reform. And this is unquote. [Foreign Language]
Thank you very much. The board notes that the company complies with all local and national provisions concerning the disclosure of expenses and expenditure to lobbyism and political contributions, and thus we feel that the current disclosure of information is sufficient. We would point out that the shareholder is residing in the U.S., and we can inform you that ROCKWOOL does not make any political contributions, monetary or non-monetary, in this country, and we do not support the proposal.
We can now conclude, in the absence of other comments to this proposal, that on the basis of votes received through proxies, postal votes, and from the major shareholders, the proposal has been rejected. Much more than 90% of the votes were against, and now item 10, the last item on the agenda, any other business. Here it is possible to make comments or other contributions, but we have received nothing from the shareholders.
I find that the formal agenda has been exhausted, and I'd like to hand back to the chairman of the board for a final comment.
[Foreign language] . Thank you very much. And thank you, Niels Heering, for once again taking us so expertly through the agenda. I'd also like to thank my colleagues on the board of directors for excellent cooperation in the year under review. And Søren Kähler, in particular, his resigning from the board is made a great effort over the last eight years. Carsten Kähler, congratulate you with being newly elected, and I congratulate the rest of the board with re-election. Now there would normally have been a guest speaker from one of our business areas who would come and talk to us about the company.
In the circumstances we have this year and inspired by our commitment to CDP, we have made a video instead, and we're going to play that now. So that's it. Thank you very much for your virtual participation here in the AGM. I hope we'll meet physically next year. Thank you.
2020 was a year that we'll never forget. Together, we've faced the most unpredictable global challenge in living memory. The past year has been a true test of our resilience, personally, professionally, and as a society. But together, we've stood firm in the face of a unique and unprecedented threat. Strong foundations help us to remain resilient when things become a little uncertain. Where we've been forced to spend time apart, we've stood together. And where we've faced adversity, we've adapted.
You could even say we've learned to thrive in the new normal, despite missing the old times every now and again. Oh, thank you. Unexpected obstacles come in many shapes and sizes. But when we invest in the right building blocks, they keep us strong and ready to bounce back from trying times. And as we enter a new era of recovery, we have a renewed focus on what's important: our health, our family, community, and the planet around us.
It is fair to say that 2020 will be a year we will never forget. The pandemic is hopefully weakening its grip, but the challenges will be with us for some time. In any crisis, challenges come with opportunities and lessons for us all. For ROCKWOOL, the last year showed who we are and what we can do. We got knocked around, but reacted calmly and quickly.
Without panic, we quickly adjusted the business to reflect changing conditions, and we did it while keeping ourselves safe and continuing to deliver for our customers. Looking at the outside world, I'm encouraged to see political leaders increasingly understand that buildings play a pivotal role in addressing the health and economic challenges brought on by the pandemic, as well as the climate crisis that becomes more urgent every day. Many governments are now seizing the opportunity to green the recovery, to tackle all three challenges at once, leveraging climate initiatives to spur economic growth and create healthier, safer communities. Perhaps 2020 will go down as the trigger year for getting serious about energy efficiency and climate change. We can be proud of the contribution we make and optimistic about the future.
That's right, Jens. ROCKWOOL is right there where economic, social, and climate recovery come together.
When we talk about recovery, it's really important that we talk about our buildings. Buildings account for more than a third of all carbon emissions worldwide. With the pandemic still a factor in people's lives, our homes are more than just where we live. In many cases, they have become our place of work, a classroom for our children, or even an auditorium. It is encouraging to see that the European Union has placed such a strong focus on the renovation of buildings as an effective way to jump-start the economy while achieving climate targets. The European Commission sees doubling the renovation rate over the next 10 years as essential to meeting its 55% carbon emission reduction goal. Renovating those buildings to be more energy efficient will save energy and reduce emissions while creating healthier and safer places for people to live, work, learn, and recover.
It can create up to 18,000 jobs per EUR 1 billion invested. This is especially important in times of economic recovery. ROCKWOOL products play a big part in making that happen. As you say, Jens, there are challenges out there, but we have a good reason to be optimistic about our future. The future is exciting. As new innovative solutions help us to become even more energy efficient, our collective footprint will be much reduced. But we also know that sometimes it takes a little energy to create these sustainable solutions that can significantly reduce energy consumption on a long-term basis. Sorry, guys. My laptop died. Story of 2020. But while I go and find my charger, Anthony, as a global manufacturing company, ROCKWOOL's production process inevitably has some environmental consequence. How mindful of that are you? And how can ROCKWOOL positively contribute to global climate goals?
So you're right about the environmental impacts, but perhaps not entirely as you might think. ROCKWOOL is already a net carbon negative company in that in the lifetime of the building insulation products that it sold in 2020, it will be saving 100 times the carbon emitted and the energy consumed in production. We're really proud of this. And what's more, in 2020, for the second time, Trucost, part of S&P Global, classified 100% of our products as being SDG positive, meaning that they will have a positive impact in reaching the United Nations Sustainable Development Goals. But of course, we also know that we need to continue to minimize the environmental footprint of our production. And that's why in 2020, on top of the six sustainability goals that we set back in 2016, that we would set science-based targets.
Those science-based targets are reducing our absolute life cycle greenhouse gas emissions by one-third in 15 years, so by 2034. Reduction of emissions from any business growth will be on top of that. To underline this ambition level, ROCKWOOL is one of the few global energy-intensive companies that have verified approved science-based targets by the Science Based Targets initiative. Getting to these targets will contribute to helping to achieve the global ambition of zero carbon emissions in 2050. That is fantastic news. These science-based targets are the gold standard in goal setting. It's about doing what's right, not just what's easy or convenient. These targets are clear, consistent, long-term, and transparent. They also help businesses like ROCKWOOL to plan ahead and set strategy to address global challenges. Of course, targets are nice, but action is ultimately what's important.
ROCKWOOL is leading the way in the face of a changing planet to take us into a new era of green recovery. So Bjørn, tell us a bit more about these targets and how we plan to achieve them. Well, it's not going to be easy. In fact, it's actually going to be quite challenging to reach the decarbonization targets that Anthony speaks about. We're building our decarbonization strategy on three pillars. First is to improve the energy efficiency of our operations. Second is technology innovation. And thirdly, how can we exploit the inherent circularity properties of stone? And I would like to speak a little bit more about the technology innovation. Let's take for an example the large-scale electric melter we have piloted in Moss, Norway. Here we have built the biggest electric melter for stone in the world.
This type of technology is really efficient to use in countries where the electrical grid has already been decarbonized. In fact, using this very advanced melting technology in Norway has helped us reduce our carbon emissions by more than 80%. This has helped us switch from coal to natural gas or biogas. And as an example, we have converted our two Danish factories to natural gas in 2020 and certified climate-neutral biogas in 2021. This has helped us reduce our carbon emissions in Denmark by more than 70%. We still have a lot of ground to cover to reach our decarbonization goals, but I'm sure we will get there. More efficient buildings, innovation, and technology. They're all fantastic ways to enrich modern living. That begins in our factories and offices.
Healthy habits aren't just made indoors, despite the fact that we've spent a little bit more time there than we'd like in 2020. As we enter an era of recovery, we have renewed opportunity to get back outdoors into the elements and to do the activities that we enjoy. There's no better showcase for the elements than the sport of sailing, with boats racing on the ocean powered only by the wind. When ROCKWOOL and SailGP came together in a groundbreaking partnership around the Denmark SailGP team led by Nicolai Sehested, it was a perfect fit. With season two of SailGP about to get underway, look out for ROCKWOOL at the heart of the action. We have a lot to look forward to this season. At Denmark SailGP team, we're really proud to represent ROCKWOOL.
We race in some of the world's most iconic cities alongside the best sailors on the planet in SailGP. The partnership between ROCKWOOL and the Danish SailGP team is much more than just traditional sports sponsorships. As a team, we are cast in ROCKWOOL's image. The company ethos and purpose gives our team strong foundations, and the Danish heritage is in our DNA. SailGP is powered by nature and gives us a unique global platform to tell the world about ROCKWOOL, its leadership, and the solutions that it provides. As a sports event, SailGP has the most skilled sailors, Olympic champions, round-the-world adventurers, record breakers, and the fastest boats. It's about far more than just top-level sport. Ultimately, it's about showcasing a better future and bringing people together around a common goal. The boats we race are at the height of technology and innovation.
The F50 foiling catamaran has already broken the 100 km/h barrier, and we're always pushing for more performance and faster speeds, and just like ROCKWOOL, SailGP is making progress off the water too. SailGP has bold ambitions to be the world's most sustainable purpose-driven sports and entertainment platform, using its global reach to drive change through an action-oriented plan, spanning events, venues, tech, partners, and athletes. As an important and trusted partner to SailGP, ROCKWOOL is playing a key role in that journey, and I believe that together, we will achieve something truly great through this collaboration. Season two of SailGP begins in Bermuda on the 24th and 25th of April, and we hope you will tune in and support us as we race for ROCKWOOL and fly the Danish flag on the global stage. We hope to make you proud. 2020 was a year we'll never forget.
But together, we can make 2021 a year to remember for the right reasons. We've all shown adaptability, commitment, and resilience. And we've also shown that even in unpredictable circumstances, together, we can achieve something remarkable. But we're not done yet, and we're not standing still. Together, we can build a better future.