AGL climate plan falls short of Paris, McKenzie not the Chair to deliver

The Australasian Centre for Corporate Responsibility​ (ACCR) has published its analysis of AGL's Climate Transition Action Plan (CTAP), and will vote against the plan at the company's upcoming AGM, on November 15, 2022.

ACCR will also be voting against the re-election of AGL Chair, Ms Patricia McKenzie, on the basis of her previous record.

ACCR has engaged with AGL since 2015, on its management of climate risk, decarbonisation strategy, and governance matters.

In 2021, ACCR and shareholders - representing 53% of votes cast -  called for the company to disclose its Paris Agreement aligned goals and targets for the proposed demerged companies, and to publish details of how the proposed demerged companies’ capital expenditure would align with those targets.

Commenting on AGL's Climate Transition Action Plan, and the vote against AGL Chair Ms Patricia McKenzie, Brynn O'Brien, Executive Director, The Australasian Centre for Corporate Responsibility (ACCR), said:

“While there is no doubt that Ms McKenzie is a competent and capable company director in a general sense, her record at AGL is lamentable. Since 2019 she has held leadership roles on various committees responsible for significant value destruction and grave errors of judgement.

“Our governance concerns relating to Ms McKenzie’s elevation to the role of board Chair, after the nominations committee she chaired failed to identify any other suitable candidate, are well known and have been raised publicly, and directly with the company.

“While of course ACCR does not get a vote on the company chair (that being a matter for the board as constituted after the AGM), ACCR is using its vote on Ms McKenzie’s re-election to signal our opposition to her continued tenure as company Chair. ACCR does not object to Ms McKenzie remaining as a non-executive director.

“While AGL’s Climate Transition Action Plan represents progress against previous offerings, the bar was, frankly, low. This plan is not Paris-aligned, despite the company’s stated commitment to the Paris Agreement.

“AGL’s plan is insufficient in both ambition and detail to justify shareholder support at this AGM, let alone to carry the company through the critical next three years, as the company proposes.

“The pace of transition has been badly underestimated by AGL in the past. AGL needs to keep up with its competitors or risk destroying further shareholder value. ACCR will vote against the plan in its current form and is strongly of the view that the company should present a refined plan for a vote at the 2023 AGM, with the benefit of a new Managing Director and refreshed board.”

Background

Disclosure of potential conflict of interest: Ms Armina Rosenberg, who sits on ACCR’s Office Bearers’ committee, is a portfolio manager at Grok Ventures. Grok Ventures is a business name used by the private investment group controlled by Mike Cannon-Brookes. "Grok Ventures" is a registered business name of Cannon-Brookes Services Pty Limited (ACN 616 170 542) (CBS). An affiliate of Cannon-Brookes Services Pty Limited, the Galipea Partnership, is the holder of an 11% interest in AGL. Ms Rosenberg has had no role in ACCR’s decision-making and analysis in relation to AGL and its CTAP, the directors proposed for election, and the expired takeover bids. No financial relationship exists between ACCR and Grok or any Mike Cannon-Brookes entity, and no Grok or Mike Cannon-Brookes entity is or has ever been an ACCR donor.