HESTA $ 68 billion retirement giant has confirmed it will reject AGL’s controversial spin-off in a vote next month, saying it believes the board’s proposal to transform its coal-fired power plants into a standalone business Australia’s transition to a low-carbon future.
With just four weeks to go before shareholders vote on AGL’s plan to break up its retail division and carbon-heavy power plants, Australian technology billionaire Mike Cannon-Brookes has stepped up efforts to persuade the company’s shareholders to block split. The AGL board has asked investors to support the division.
Energy giant AGL is the largest contributor to the country’s carbon emissions.
HESTA, which is believed to own 0.4% of AGL’s shares on behalf of its members, said on Wednesday it was not “convinced” that the merger proposal would accelerate decarbonisation to meet the goals of the climate agreement. of Paris to limit the rise in global temperature to 1.5. degrees. He also said he was concerned about the risk of coal-fired power plants becoming “stranded assets” and believed the board had not adequately described how it would support communities affected by possible plant closures.
“AGL events represent a starting point in active ownership in this country,” said HESTA Executive Director Debby Blakey. “Shareholders are pushing for more action on climate change and a faster transition that aims to improve the company’s ability to create long-term sustainable value.”
AGL’s coal and gas power plants are the main sources of greenhouse gas emissions in Australia, accounting for 8% of the country’s carbon footprint. Under the board’s proposal to create a coal branch to be called Accel Energy, the company’s latest coal plant, Loy Yang A in Victoria, is not scheduled to close until 2045.
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Cannon-Brookes accumulated an 11.3 percent stake in AGL last month and has pledged to use its voting rights to fight the split, keep the company afloat and advance its planned exit. of coal electricity in 2045 to 2035. approving the vote requires 75 percent of the value of the shares voted.
AGL’s board insists the spin-off will unlock shareholder value by creating a carbon-neutral net energy retailer known as AGL Australia, which will be able to attract financial sponsors who are increasingly moving away from investments in fossil fuels. Meanwhile, independent power generation company Accel Energy will focus on transforming coal sites into energy centers that could also house renewable energy and batteries.
“AGL Energy has a clear spin-off plan that is the best path for the company, shareholders and Australia’s orderly and responsible energy transition, backed by Grant Samuel’s independent expert report,” said AGL CEO Graeme Hunt.