Australasian Centre for Corporate Responsibility
To keep global warming as close to 1.5C as possible we must rapidly reduce emissions this decade, and Australia’s largest emitters cannot be ignored, which is where the Australasian Centre for Corporate Responsibility comes in. With a mission to activate company shareholders and investors in escalating their engagements with major, heavy-emitting companies, they are the world’s leading climate engagement organisation for shareholders who want to see real-world impact.
ACCR was a 2023 grant winner. In this interview we speak to Executive Director Brynn O’Brien.
Brynn O’Brien, ACCR's Executive Director
Last year was a huge year for ACCR . Thanks to your stakeholder engagement work, you helped transform AGL from one of Australia’s biggest carbon emitters into one of the largest energy transition leaders. What are some of the most exciting outcomes of that work?
AGL has been a focus of ACCR’s work since 2015, and for good reason: it is Australia’s single biggest carbon emitter of carbon pollution. Until very recently, it was emitting around 42 million tonnes of carbon pollution into the atmosphere a year – 8% of Australia’s total emissions.
Shareholders have been trying to swing AGL away from its commitment to coal-fired power generation and towards a path of decarbonisation and embracing the opportunities of the energy transition for some time. From 2020, AGL’s share price started to nosedive and major investors began appreciating the connection between reducing carbon exposure and shareholder value.
A pivotal point came in 2022 when Grok Ventures, Mike Cannon-Brookes’ private investment company, acquired an 11.28% stake in AGL, making Grok its largest shareholder. Along with Grok, we campaigned against AGL’s proposed demerger plan – a proposal to simply spin-off its coal assets as a solution to its woes – and were successful in seeing the demerger scrapped in May of that year, along with the resignation of four directors.
The next significant outcome came in September, when AGL announced it was going to bring forward the closure of Australia’s dirtiest power station, the Loy Yang A brown coal generator, by a decade to 2035. This single decision means up to 200 Mt CO2-e will not be released into the atmosphere.
Still, a fundamental problem with AGL remained – it was in desperate need of directors that had direct experience in developing clean energy at scale. Grok put forward four, independent, climate competent directors at the 2022 AGM and all of them were voted in. This was the first time the board of an ASX company had been transformed by shareholders over its handling of climate risks.
We’re very excited AGL is finally pointed in the right direction. However, the job is not done. AGL remains Australia’s largest direct greenhouse emitter and will do so for many years. Having arrived late to the party, it now faces a challenging energy transition. We’ll be stepping up our engagement with AGL in 2024 to make sure the company proactively tackles these challenges.
How has that win helped you build momentum this year?
The win at AGL really helped shift the conversation about accountability for climate governance failures to a board level, where it needs to be. It’s a problem we see at other heavy emitting companies - boards that really struggle to take on the fresh thinking that is required under the energy transition and just don’t have the requisite skill set.
This year, along with institutional investors, we filed members’ statements at Woodside Energy’s AGM, calling on directors to be held to account for the board’s repeated failure to present a credible climate strategy. A record-breaking 35% of shareholders voted against the reelection of long-standing Woodside director Ian Macfarlane.
We see this result as a pivotal moment for company directors across Australia. Climate risk matters and if shareholder concerns are blatantly ignored, director votes won’t breeze through an AGM.
What are some of the active campaigns you’ve worked on this year?
Early this year, along with a global coalition of institutional investors collectively representing $US2.2 trillion of assets under management, we co-filed a shareholder resolution with Glencore plc, seeking greater transparency on how the company’s thermal coal production aligns with the Paris objectives. Glencore is the biggest coal miner in Australia and the world’s biggest coal trader.
Nearly 30% of shareholders voted in support of the resolution, which means under the terms of the UK Corporate Governance Code Glencore is now required to formally consult with shareholders about the reasons for the result. Our research team has continued its forensic examination of Glencore’s climate plan throughout the year, making sure investors are equipped with the best information as they go into engagements with the company.
Core to our mission is delivering the kind of fresh-thinking that is needed for the energy transition to be a success. In August, we published a risk-adjusted financial analysis of Woodside’s growth portfolio, revealing that the company’s portfolio of unsanctioned oil and gas projects does not appear to be a material source of value for shareholders. Our analysis shows that reallocating the capital earmarked for these projects towards a share buyback offers more value and less risk than delivering them. It would avoid almost 1.5 billion tonnes of greenhouse gases from being released into the atmosphere, making it a win for shareholders and a win for the climate.
What are some of the wins you’ve had this year?
Our focus is on achieving real-world emissions reductions and this year a number of the companies we engage with have made decisions that will cut their carbon pollution.
Leading Japanese steelmaker, JFE Holdings, has committed to building an electric arc furnace by 2027, which will reduce emissions by 2.6 million tonnes a year from current levels emitted by a blast furnace. Japan’s largest coal power operator, J-POWER, announced it was closing one of its coal-fired plants five years earlier than an original commitment, which we calculate will save 15.1 million tonnes of CO2 going into the atmosphere. In Australia, Rio Tinto has publicly committed to engaging with ACCR and investor and civil society organisations on an enhanced approach to its advocacy for policies that will support the decarbonisation of its operations.
Of course this is just a drop in the ocean compared to urgent, massive, near-term global action that is required if we want to have a chance at limiting global warming to 1.5C. The science continues to become more grim by the day, with warnings that the window to achieve 1.5C is at best vanishingly small, but we are committed to throwing everything we can at achieving it.
ACCR has continued to drive robust conversations with investors at a number of high-profile speaking events, including at UN Climate Week in New York in September.
What about the challenges?
The biggest challenge is undoubtedly the determination of major fossil fuel companies to keep expanding their planet-wrecking operations and to slow the pace of the energy transition.
What’s next for ACCR?
With 2023 tipped to be the hottest year on record, the urgency of climate action will be top of minds in 2024. All eyes will be on the oil and gas industry which has lined up further fossil fuel expansion completely contrary to international climate goals. A host of authoritative institutions from the IEA to climate scientists have made abundantly clear that no new oil, gas or coal expansion can be sanctioned to stay within the 1.5C carbon budget.
We will continue to focus on publishing cutting edge research and working with institutional investors to urgently change the behaviour of fossil fuel companies.
How has Groundswell's support helped you achieve your goals this year?
Groundswell’s approach to funding instils in their grantees a high degree of trust in the important work we are doing. This trust and flexibility in how we utilise their funds is incredibly valuable to us. We are a fast moving and agile organisation, and need to be quick to react as the fossil fuel industry socialises their desperate spin.