Activists to ramp up pressure on companies over climate during AGM season

Extract from The Guardian

Business (Australia)

Companies face hostile shareholders as Westpac acknowledges a ‘variance’ with Business Council of Australia

Martin Farrer

Fri 14 Jun 2019 04.00 AEST Last modified on Fri 14 Jun 2019 04.10 AEST

Westpac is among several companies reviewing their membership of business associations in the light of divergent opinion about climate policy. Photograph: Richard Wainwright/AAP

Activist groups are stepping up their efforts to lobby Australia’s biggest companies on climate policy as the corporate sector prepares for the annual general meeting season.
Some of Australia’s best-known companies could face hostile shareholder resolutions at their annual meetings in the spring as the battle over climate policy moves into the country’s boardrooms.
Westpac acknowledged on Thursday that it has a “variance” in opinion with the Business Council of Australia over “climate and energy policy and advocacy”.
The bank, which is committed to action to achieve net zero emissions, did not spell out exactly what the variance entailed. It emphasised that it agreed with the BCA, which counts more than 100 of Australia’s biggest companies as members, on support for the Paris agreement and a carbon price.
“We respect that industry associations may hold different views – but where there is a difference we engage with the leadership,” a Westpac spokesman said.

“We have identified considerable alignment with the BCA, including their support for the Paris Agreement – however there is some variance around our respective positions on climate and energy policy and advocacy.”

But the BCA’s advocacy for Kyoto carryover credits and extending the life of coal-fired power stations has led some activists to doubt that it can also support the Paris agreement to cut emissions, as its website states. It was also outspoken in its condemnation of Labor’s policy to cut carbon emissions by 45%, calling the proposal “economy wrecking”.

Westpac was among several companies reviewing their membership of business associations in the light of divergent opinion about climate policy, along with BHP, Rio Tinto and Telstra, according to the Australasian Centre for Corporate Responsibility (ACCR).
The BCA rejects claims that the stances are incompatible and says Kyoto carryover credits are not prohibited by the UN.
A BCA spokesperson said: “We have long supported action to tackle climate change. That’s why we support a realistic, pragmatic plan to manage the transition to a lower carbon economy which includes a market-based, economy-wide mechanism to reduce emissions, give businesses the ability to plan for the future, meet our Paris commitments and achieve net-zero emissions by 2050.”
But Australian companies could nevertheless face a series of shareholder revolts at this year’s AGMs.
The ACCR’s Dan Gocher said Westpac had committed to carrying out a review after the ACCR threatened a shareholder resolution at the bank’s AGM last year.
The lobbying effort included “identifying to Westpac” that the BCA’s interventions in discussion of climate policy appeared to contravene the bank’s own position.
“It would have looked a little silly if Westpac said they were in complete alignment with the BCA,” he said. “By not identifying the ‘variances’, it lets the BCA off the hook, so to speak. Investors are increasingly focusing on lobbying, but their focus to date has been on resources companies.”

Gocher said the ACCR was meeting up to 20 large companies, including Coles, Woolworths and Qantas, to lobby them ahead of the AGM season.
“Running up to the AGM season we are meeting companies, investors and trying to get them to understand these issues. If the company doesn’t understand we consider filing a resolution at the AGM,” he said.
It follows a series of successful resolutions by shareholder activists against the boards of large companies during last year’s AGM season, notably Telstra, Tabcorp and Westpac.
“We are trying to weaken the influence of groups such as the BCA, the Australian Petroleum Production & Exploration Association and the Minerals Council of Australia. They have played a destructive role on climate for 20 years and have never been the subject of scrutiny.”
Emma Herd, the chief executive at the Investor Group on Climate Change, said investors around the world were looking for companies to be constructive participants in the discussion on climate change and in “getting effective policy in place”.
She said investors were increasingly voting on resolutions at AGMs and also pushing behind closed doors for more effective action.

“Investors are less interested in statements on paper and more interested in how companies are going to align their strategy with the decarbonising economy,” she said.