Origin makes climate commitments
On the morning of its 2015 AGM Origin announced that it was committing to to all 7 of the ‘We mean business’ initiatives.(http://www.wemeanbusinesscoalition.org/) climate change related initiatives. ‘We Mean Business’ is a coalition of organizations working with thousands of the world’s 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. They 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
This commitment came after 100 plus shareholders, lead by ACCR, had lodged a resolution about climate change which received 6.4% support with 1.5% abstentions. Had Origin announced its commitment earlier we would have withdrawn the resolution. As it was it is clear that the resolution was one of the reasons Origin made its commitment.
Renew has written this article on what the new commitments mean for Origin.
The AGM was a week after the tragic death of George Bender due at least in part to concerns about CSG and Origin's threat to take him to court. This issue featured in the AGM discussion and a protest on the day and we hope that it will lead to positive change. There is a clear social license issue with CSG as well as the climate change concerns.
Origin certainly needs to change. Origin Energy is Australia’s largest electricity retailer. It is also Australia's 8th biggest carbon polluter. It is responsible for 2.4% of Australia’s total carbon emissions. The AGM was dominated by discussion of Origin's gas business with Origin saying that gas is the 'fuel of the future.'
Origin's Eraring coal-fired power plant in New South Wales is the Australia's fifth largest carbon emitter amongst the electricity generators (http://reneweconomy.com.au/2015/graph-of-the-day-australias-top-20-greenhouse-gas-emitters-98644).
Eraring accounts for 47% of Origin’s generation portfolio, with gas generators making up 42% of generating capacity and renewables less than 1% (http://cdn.getup.org.au/1009-The_Dirty_3.pdf).
Prior to the meeting Origin's policy on carbon emissions states “We acknowledge and continue to maintain that climate change is a global societal challenge and as such, Origin continues to support measures to reduce carbon emissions.” In fact, over the past 3 years Origin's own (scope one) emissions have increased by 55% pa.
ACCR hopes that the Origin will honor its new commitments with more carbon reductions than it did with the previous ones. We will continue to watch what it does.
The 2015 Resolution
Over 100 shareholders, including shareholders from Getup, the Asset Owners Disclosure Project and a number of ethical financial advisers including Tas Ethical, Ethinvest and Ethical Investment Services, want that to change and have lodged a resolution that was debated at the Origin AGM on 21 October 2015.
(infographic source GETUP)
The resolution is "That, at the end of Clause 8.3 'Notice of general meetings' the following new sub-clause 8.3(e) is inserted: "Each year from 2016, at reasonable cost and omitting any proprietary information, routine annual reporting will include further information about ongoing power generation and supply chain emissions management, generation portfolio resilience to the International Energy Agency's (IEA's) scenarios; relevant strategic key performance indicators (KPI's) and executive incentives; and our public policy positions relating to climate change."
You can read more about why we are moved this resolution in our shareholder briefing.