AGL says it will change
AGL, Australia's biggest carbon polluter, has just announced that it will ‘engage with its stakeholders to demonstrate that its business activities are consistent with a 2 degrees C carbon-constrained future’ and, as well, it undertakes to make additional disclosures.
ACCR welcomes this! No wonder, because the AGL has, in effect, agreed to the ACCR’s climate change resolution that was to be debated at the AGL AGM on 30 September 2015. The AGL resolution been well reported and it, along with pressure from environment groups and other shareholders, has made a difference.
AGL's announcement came to late for ACCR to withdraw the resolution. Despite AGL now basically agreeing with the substance of the resolution we expect them the AGL board to vote against it because due to the issues with Australian corporate law we had to lodge it as a resolution to change the company constitution.
It is clear from its timing, just before the AGM, that AGL was making this commitment because of the pressure from shareholders. Thank you to all who helped this happen, Tas Ethical, Getup, Ethinvest, AODP and the hundred plus individual shareholders.
At the AGM, 5.1% of the shares voted supported the resolution with 2.9% abstentions. This is more support than last year climate change resolutions at CBA and ANZ received.
AGL said that the main reason it did not support the resolution was that it was not appropriate to amend the constitution and that it would largely do as requested. This is the reason why ACCR is involved in long running legal action with CBA seeking to make it possible to move ‘ordinary’ resolutions at AGM and not have to try to change the company constitution. The result at AGL underlines how important that legal action is as otherwise the resolution might have been supported by the company.
This new commitment is a victory for shareholders, and for others in civil society who have been saying that AGL needs to change. As shareholders we think it is vital that Australia’s largest greenhouse gas emitter shows how it can operate profitably into a 2 degrees C carbon-constrained future.
Commitments are easy to make and ACCR will watch ACL to ensure it makes tangible commitments that reduce its emissions to keep to a 2 degree objective. Renew Economy wrote this description of where AGL's business is now.
In an earlier response to the resolution, AGL has brought forward its reporting to the Carbon Disclosure Project and it is on AGL's website .
Why did we lodge the resolution?
AGL is Australia’s biggest carbon emitter. 81% of its power is generated from coal, 7% gas and only from 11% renewable energy. AGL was Australia’s greenest big power retailer, with the lowest emissions intensity (or the amount of carbon emitted per unit of electricity) and is now its blackest. Last year it bought 4.6GW of coal-fired generators in New South Wales’ Hunter Valley and 3 years ago it bought the 2.2GW Loy Yang A brown coal generator in Victoria, Australia’s biggest single greenhouse gas emitter.
Despite this, AGL Energy tries to bury coal, even as profits surge.
In the past AGL has had a policy on carbon emissions and in 2012 AGL set a target, “From next year, AGL’s target will be for investments in new generation capacity to have a combined intensity lower than 0.7 tCOe/MWh.” Despite this during the period 2011 to 2014 AGL’s greenhouse gas emission intensity from power generation actually tripled from 0.32 to 0.97.
(infographic source GETUP)
In September 2014 AGL purchased Macquarie Generation owner of the Liddel and Bayswater black coal fired power stations in NSW. This has made them Australia's biggest carbon polluter. These plants have combined estimated emissions intensity of 1.02 vastly exceeding their stated target. In April 2015 AGL revised its Greenhouse Gas Policy. It now contains nine commitments but none of them involve any quantitative targets for emissions or emissions intensity reductions. It does however contain a commitment to cease coal based generation by 2050 which will be at the end of the design life of its existing plants.
Here is our shareholder briefing on AGL.
Overseas power companies are going the other way. In America 200 coal fired power plants are due to shut.
As well as coal, AGL is also investing in CSG production most controversially in Gloucester. Photo courtesy of K Klinger.
What was the climate change resolution?
The climate change resolution sponsored by over a 100 shareholders from ACCR, Getup, the Asset Owners Disclosure Project and a number of ethical financial advisers including Tas Ethical about climate change is now on the AGL AGM agenda. Its been well reported and it hasl make a difference.
The AGL AGM is on 30 September and ACCR has lead filed a resolution about AGL’s greenhouse gas emissions. Despite AGL agreeing to the substance of the resolution, ACCR does not expect that AGL will endorse the resolution. This is because AGL chose to put an resolution to change the company constitution to require greenhouse gas action, rather than an ordinary resolution requesting such action.
This is the resolution:
That, at the end of Clause 31 ‘Notice’ the following new sub-clause 31.5 is inserted: “That, (a) the board must prepare a business model that demonstrates sufficient diversification of the power generation and supply activities of the company to ensure continued profitability under pathways that limit the world to 2˚C warming; and (b) include in future annual reporting to shareholders, at reasonable cost and omitting any proprietary information, information about ongoing power generation and supply chain emissions management benchmarked against that model.
And here is the accompany statement.