AGL and Origin make climate commitments after shareholder pressure
ACCR, with the help of over 100 other shareholders, moved climate change resolutions at the AGMs of AGL, Australia’s largest carbon polluter and Origin, Australia’s largest electricity retailer and 8th largest carbon polluter.
Both of them have now (at or just before the AGM) announced they are committing to the ‘We Mean Business’ (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. AGL has adopted 4 of the “We Mean Business” commitments.
The seven “We Mean Business” commitments 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
ACCR is really pleased that Origin and AGL made their commitments. If they had been announced earlier we would have withdrawn the resolutions. At Origin’s AGM the voting on the resolution was 6.4% support with 1.5% abstentions, while at AGL it was 5.1% support with 2.9% abstentions. These results are very high for an Australian climate change resolution.
The Origin and AGL announcements show how shareholders, along with others from civil society, can make a difference to the companies they invest in. However both companies have made climate change commitments in the past and then not followed thru so ACCR will continue to monitor them to see if they stick to their word. In particular we want them to make measurable short term commitments so that we can see progress, not just long term commitments such as AGL’s ‘no coal by 2050’ where no one can tell for possibly 35 years if they meet the commitment.
Despite their new commitments, both companies were keen to spruik their existing business models with Origin saying that ‘gas is the fuel for the future’ and expanding production. AGL spoke positively about their change in billing (from quarterly to monthly) which had flattened the decline in electricity consumption. These are not the statements that ACCR would expect from companies who ‘mean business’ in reducing carbon pollution.
Both company AGMs showed there is a lot of community concern about the companies’ CSG program. For AGL the concern focused on Gloucester while for Origin Lock the Gate representatives asked questions and made comments about the wider circumstances relevant to George Bender’s recent death. CSG is becoming an issue of social license as well as climate change concern.
Why Australia's power sector must change
Power companies - Energy Australia, AGL and Origin – are three of Australia’s ‘top ten’ carbon polluters. Our paper - ‘Unburnable carbon’ risk and the Australasian – listed gentailers’ shows the exposure to ‘climate change related’ risk of five Australian and New Zealand listed gentailers – AGL, Contact Energy (majority owned by Origin), Infratil, Origin and Trustpower.
This research shows that Australia and New Zealand stand at polar ends of the spectrum in regards the carbon intensity of their energy supplies. Carbon intensity of energy supply is 35% above the world average in Australia and 30% below in New Zealand. Globally carbon intensity needs to decline very significantly to hold global warming to the agreed 2° C threshold.