The Australasian Centre for Corporate Responsibility​ (ACCR) is commenting on AGL Energy’s (ASX:AGL) announcement that it will provide shareholders with a ‘Say on Climate’ at its 2022 AGMs for both of the proposed demerged companies.

Earlier this year, Oil Search, Rio Tinto, Santos and Woodside similarly committed to ‘Say on Climate’ votes in 2022, following resolutions filed by ACCR.

This week, ACCR filed a shareholder resolution with AGL, calling on the company to set short, medium and long-term targets that are aligned with the Paris Agreement for Scope 1, 2 and 3 emissions for both of the proposed demerged companies.

Commenting on the resolution, Dan Gocher, Director of Climate and Environment, said:

“ACCR welcomes AGL’s commitment to give shareholders a ‘Say on Climate’ in 2022. Despite saying that AGL couldn’t commit to Paris-aligned targets for the proposed demerged companies, as that would be a matter for the new boards, it has now made this commitment to ‘Say on Climate’.

“AGL can’t commit to one thing on behalf of the new boards and not the other.

“Until AGL sets Paris-aligned targets for both Accel Energy and AGL Australia, for Scope 1, 2 and 3 emissions, investors will rightly be sceptical of its commitment to climate action.

“Investors in AGL have suffered terribly in recent years because of the company’s failure to effectively manage the energy transition. This has resulted in seeing its share price plummet by more than 70% since its peak in 2017.

“AGL has not presented a viable transition plan to its shareholders, instead it is attempting to quarantine what are likely stranded assets in Accel Energy.

“To provide investors with the confidence they sorely need, it is imperative that AGL provide a Paris-aligned climate transition plan for both of the proposed entities, with short, medium and long term targets, capital expenditure alignment and a remuneration framework that incentivises rapid decarbonisation.

“The International Energy Agency’s recently published ‘Net Zero by 2050’ report recommended that all unabated coal plants must be phased out in advanced economies by 2030. Incredibly, Bayswater is scheduled to close in 2035, and Loy Yang A in 2048.”

Background

Text of the resolution and supporting statement can be found here.

ACCR filed a shareholder resolution to AGL Energy in 2020, calling for the early closure of its Bayswater and Loy Yang A coal-fired power stations, which was supported by >20% of shareholders, including the world’s largest asset manager, Blackrock.

AGL Energy - Electricity output by primary energy source

*All coal
**All renewables
Source: https://www.2020datacentre.agl.com.au/environment, 2021 Half Year Results

AGL Energy - Operational greenhouse gas footprint (material sites and fuels)

Source: https://www.2020datacentre.agl.com.au/environment