ACCR Shareholder Resolutions to J-Power on emissions reduction targets and disclosures

The Australasian Centre for Corporate Responsibility (ACCR) has co-filed shareholder resolutions to J-Power to set credible emissions reduction targets and disclose plans to achieve them. The co-filing investor group includes Man Group, the world’s largest publicly traded hedge fund company, Amundi, Europe’s largest asset manager, and HSBC Asset Management.

Owing to local legal requirements, the shareholder group has presented a package of three proposals, each framed as a partial amendment to the company’s Articles of Incorporation. Each proposal stands alone legally, but we believe the package is in the interests of shareholders.

This page contains the resolutions and supporting statements.

Resolution 1

Partial amendment to the Articles of Incorporation

The following clause shall be added to the Articles of Incorporation:

1. To promote the long-term value of the Company, given the risks and opportunities associated with climate change, and in accordance with the Company’s commitment to achieve net-zero GHG emissions by 2050, the Company shall set and disclose a business plan with science-based short-term and mid-term GHG emissions reduction targets aligned with Articles 2.1(a) and 4.1 of the Paris Agreement.
2. The Company shall report, in its annual reporting, on its progress against such business plan on an annual basis.

Supporting statement to Resolution 1

Long term institutional investors in the Company see its corporate value depending upon a credible decarbonisation strategy and science-based short-, medium- and long-term GHG emissions reduction targets aligned with the goals of the Paris Agreement and investor expectations.

While we welcome the Company’s intention to achieve carbon neutrality by 2050, the Company’s targets are not yet aligned with the goals of the Paris Agreement. This presents a range of material financial risks to shareholders. We consider that setting science-based targets, and disclosing a business plan to achieve them, would best manage these risks and protect corporate value.

Resolution 2

Partial amendment to the Articles of Incorporation

The following clause shall be added to the Articles of Incorporation:
The Company shall disclose, in its annual reporting, details of how it assesses the alignment of capital expenditure plans with the Company’s GHG emissions reduction targets.

Supporting statement to Resolution 2

Long term institutional investors in the Company see its corporate value depending upon a credible decarbonisation strategy and science-based short-, medium- and long-term GHG emissions reduction targets aligned with the goals of the Paris Agreement and investor expectations.

Capital expenditure aligned with such targets is of particular significance for the Company’s corporate value given the high emissions from its coal-fired power generation business, and the low level of economic and feasibility certainty attaching to technologies detailed in the Company’s Blue Mission 2050. We consider that corporate value would be better protected with greater disclosure of how the Company assesses the alignment of its capital expenditure with GHG emissions reduction targets.

Resolution 3

Partial amendment to the Articles of Incorporation

The following clause shall be added to the Articles of Incorporation:
The Company shall disclose, in its annual reporting, details of how the Company’s remuneration policies will incentivise progress against the Company’s GHG emissions reduction targets.

Supporting statement to Resolution 3

Long term institutional investors in the Company see its corporate value depending upon a credible decarbonisation strategy and science-based short-, medium- and long-term GHG emissions reduction targets aligned with the goals of the Paris Agreement and investor expectations.

We consider that a direct linkage between remuneration and achievement of GHG emissions reduction targets to be in the Company’s interests, as an important mechanism to incentivise executive performance against decarbonisation goals and protect corporate value.

ESG engagement initiative of the year, Asia: Investor coalition at J-Power

The initiative, representing around $3 trillion, became the first institutional investors to file a climate resolution in Japan when it called for more ambitious action by J-Power. The coalition was formed in January 2022 by the Australasian Centre for Corporate Responsibility and is made up of Man Group, HSBC Global Asset Management, and Amundi.