Activists Turn to Shareholders to Close Australia’s Coal Mines
Activists Turn to Shareholders to Close Australia’s Coal Mines
(Bloomberg) --
An Australian climate group is appealing to fossil fuel company shareholders to shut down production in the world’s biggest coal exporter.
Market Forces will this week hit Whitehaven Coal Ltd. with a shareholder resolution calling on it to wind up its mine operations. Three other energy companies, New Hope Corp., Beach Energy Ltd. and Cooper Energy Ltd. will face similar actions in coming weeks, the group said.
While unlikely to draw broad shareholder support, the resolution adds pressure on big institutional investors, which are increasingly dialing back their exposure to the sector as they tighten environmental, social and governance mandates. Market Forces is also targeting a government criticized for its tight links to coal and gas producers and lack of a climate change policy, especially after one of the most devastating bushfire seasons on record.
“The rationale is that despite repeated investor engagement, these companies continue to base their business on the expansion of the fossil fuel industry, which is clearly unaligned with climate goals and the energy transition,” Market Forces said in an email.
Calls for greater climate accountability among Australia’s biggest energy companies are on the rise. More than half of Woodside Petroleum Ltd.’s shareholders voted in favor of a resolution calling on the company to improve its disclosure on climate targets. A similar vote at the Santos Ltd. annual meeting in April also drew more than 40% support.
There is a financial risk in investing in new coal resources which could become stranded assets, Market Forces said in a statement. Whitehaven had a A$607 million ($434 million) mine expansion project approved on Wednesday, but its expectations of strong growth in coal-fired generation across Southeast Asia are “unreasonably optimistic,” the group said. Whitehaven in April said it won’t this year make a final investment decision on the expansion.
©2020 Bloomberg L.P.