Aviva Investors among just 4% of shareholders to back ‘wind down’ proposal at Aussie coal firm

Lukewarm support at Whitehaven pending disclosure by M&G, APG, BlackRock, PGGM and LGIM

Just 4% of Whitehaven Coal’s shareholders have voted for a resolution asking the Australian firm to explain how it will wind down its operations to align with the goals of the Paris Agreement. Aviva Investors is among the shareholders that backed the resolution, a spokesperson told RI, after the AGM was held virtually today. 

Filed by Market Forces, an advocacy group affiliated with Friends of the Earth, this is the first in a series of shareholder climate proposals at pureplay coal firms that have "no place in a decarbonised economy”, according to Market Forces. The group argues that these firms must propose organised exit strategies from coal to avoid harming shareholder value.   

The same resolution has been filed at Beach Energy, Cooper Energy and New Hope Coal, whose AGMs will be held in November.

Market Forces argue that as coal power must be phased-out globally by 2040 to meet the Paris goals, about two thirds of Whitehaven’s thermal coal market will disappear by 2030 and almost completely by 2037.

Will van de Pol, Asset Management Campaigner at Market Forces, told RI: “Today's vote shows many remaining investors are happy for Whitehaven to mismanage their capital in the face of the rapid transition away from coal required to meet the Paris climate goals.

“However, even amongst this less climate-conscious investor base, there was clearly some recognition that Whitehaven should be planning to wind coal production in line with globally agreed climate targets.”

Whitehaven’s board recommended shareholders to vote against the proposal, arguing that it is “the first pure-play coal company” to report against the framework of the Task Force on Climate-Related Financial Disclosures (TCFD). The firm remains “committed to meaningful disclosure on climate change risks and opportunities for our shareholders".

Whitehaven also pointed out that it specialises in ‘clean coal’.   

The two main proxy advisory firms recommended to vote against the resolutions

ISS stated that the resolution was overly prescriptive and that Whitehaven “is taking appropriate steps to keep the market and shareholders informed of its operations, ongoing and new development projects and how its business is dealing with the impacts of climate change on product demand”, including TCFD reporting. 

Glass Lewis stated that the proposal would not serve the interests of long-term shareholders, as the company has significantly enhanced its sustainability disclosure in recent years, allowing investors to better understand its climate-related risks and opportunities. It has also carried out two-degree-aligned scenario analyses, according to Glass Lewis.  

“Moreover, it does not appear that the Company's current goals are out of alignment with the broader goals set forth by the Australian or New South Wales governments, nor do we have any reason to believe that the Company would not adopt more stringent emissions reductions should federal or state regulations require it to do so.”

Glass Lewis also stated in its report: “We view this issue as being of material relevance to the Company and its shareholders. We thus believe that the Company should continue to provide shareholders with robust information concerning its climate strategies and policies, as well as how it is planning to manage the energy transition.”

Among Whitehaven’s major shareholders are the UK’s M&G Investment Management with 5.42% of shares, the Netherlands’ APG Asset Management (4.19%) and BlackRock (3.12%). Other shareholders include Legal and General Investment Management and Dutch pension investor PGGM. At the time of writing, none were not able to disclose their votes and rationale for support or rejection of the resolution.