media release 

 

25 May 2022

 

HESTA to vote against AGL demerger 

 

Following company engagement, HESTA will vote against the demerger because it will not adequately support economy-wide decarbonisation, with a proactive and orderly transition to net zero emissions in the best financial interests of our members.

 

After reviewing the plan, we remain unconvinced that the overall demerger plan would sufficiently accelerate decarbonisation to meet Paris-aligned targets, nor manage the risk of stranded assets.

 

A stand-alone company owning AGL’s coal-fired power plants risks making it more difficult for Australia to transition to a low-carbon future. We believe this company would struggle to make the transition out of coal successfully were power prices to fall or the transition further accelerated to limit the worst impacts of climate change.

 

The proposed company would remain a potential takeover target, with the risk of private owners seeking to extend the life of emission-intensive assets. 

 

AGL has also failed to adequately outline in the demerger plans how they would support impacted communities. An equitable transition is a vital underpinning of the company’s long-term social licence to operate and would directly impact our members who deliver vital services in these communities.

 

Quotes HESTA CEO Debby Blakey:

 

“When voting this AGM season, we’re considering if companies are suitably managing risk and enabling the creation of long-term value. And that they’re doing this in a way that promotes a stronger economy and the management of systemic risks that benefits our members and all Australians.”

 

“The events at AGL represent a watershed in active ownership in this country. Shareholders are pushing for greater action on climate change and a more rapid transition that aims to enhance the company’s ability to create long-term, sustainable value.”

 

“AGL is one of Australia’s biggest emitters, with their emissions effectively flowing right through our portfolio. If AGL commits to Paris-aligned emission reduction targets this will have a hugely positive impact on Australia’s pathway to net zero, lowering the overall systemic risk exposure of our members’ investments.”

 

“We cannot simply divest away from the risk of Australia being slow to transition to a low-carbon future. Responsible investors have a responsibility to their members to go to where the biggest emissions are and as owners try and first change the behaviour of these companies.”

 

Ends.

 

Media contact:

Sam Riley

General Manager Media Relations

(03) 8660 1684

 

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