Energy Companies

CLIMATE – ENERGY COMPANIES

2015

ACCR, together with the help of over 100 other shareholders, moved climate change resolutions at the AGMs of both AGL, Australia’s largest carbon polluter and Origin, Australia’s largest electricity retailer and 8th largest carbon polluter.

Just prior to their AGM’s both companies announced they are committing to the ‘We Mean Business’ climate change related initiatives. ‘We Mean Business’ is a coalition of organisations working alongside thousands of the world’s biggest businesses and investors including IKEA, Nike, Unilever, Nestlé, Goldman Sachs, Coca Cola and Westpac to address climate change.

Origin will be the first Australian company and, globally, the first major energy company, to commit to all 7 of the ‘We mean business’ initiatives. AGL has adopted 4 of the “We Mean Business” commitments.

The seven “We Mean Business” commitments are:

  • Adopt a science-based emissions reduction target
  • Put a price on carbon
  • Procure 100% of electricity for own operations from renewable sources
  • Responsible corporate engagement in climate policy
  • Report climate change information in mainstream reports as a fiduciary duty
  • Remove commodity-driven deforestation from all supply chains by 2020
  • Reduce short-lived climate pollutant emissions

ACCR welcomes the commitments made by Origin and AGL. If they had been announced earlier we would have withdrawn our resolutions. At Origin’s AGM the voting on the resolution was 6.4% support with 1.5% abstentions, while at AGL it was 5.1% support with 2.9% abstentions. These results are very high for an Australian climate change resolution.

The Origin and AGL announcements show that shareholders, along with others from civil society, can make a difference to the companies they invest in. However both companies have made climate change commitments in the past and have not followed through so ACCR will continue to monitor them. In particular we want AGL and Origin to make measurable, short term commitments not just long term commitments such as AGL’s ‘no coal by 2050’.

Despite their new commitments, both companies were keen to spruik their existing business models with Origin saying that ‘gas is the fuel for the future’ and expanding production. AGL spoke positively about their change in billing (from quarterly to monthly) which had flattened the decline in electricity consumption. These are not the statements that ACCR would expect from companies who ‘mean business’ in reducing carbon pollution.

Both company AGMs showed there is a lot of community concern about the companies’ corporate social governance program. For AGL the concern focused on Gloucester while for Origin Lock the Gate representatives asked questions and made comments about the wider circumstances relevant to George Bender’s recent death. Corporate social governance is becoming an issue of social license as well as climate change concern.