Investors target Aussie energy giants with 43% support for Paris-aligned spending proposal at Origin

Big vote at Origin follows majority support - including from BlackRock and Vanguard - for similar proposal at rival AGL Energy last month

More than 40% of shareholders in Origin Energy have today supported a proposal calling on the Aussie power giant to align its capital expenditure with the Paris Agreement.

The hefty tally is another sign that investors are losing patience with the big power producers in the country. Last month, a similar proposal at Origin’s rival AGL Energy was backed by over half (55%) of shareholders. It too called for Paris-aligned climate targets, including around capital expenditure.

AGL is in the process of demerging its business, with its coal-based assets being spun off into Accel Energy and its renewables and gas power assets being held by AGL Australia. 

In the summer, both AGL and Origin saw their share prices drop following warnings of weaker financial results in 2022.  

US investment heavyweights BlackRock and Vanguard were among those to support the resolution at AGL, which was filed by Aussie campaigner group the Australasian Centre for Corporate Responsibility (ACCR) and referred to both AGL’s proposed demerged businesses.  

Vanguard also voted against the only director up for reelection, Jacqueline Hey, over climate governance concerns. 

The ACCR was also behind the Paris-aligned spending proposal at Origin and another on climate lobbying, which was supported by a substantial 36.6% of shareholders today at the company’s annual general meeting.  

“Origin has copped a significant rebuke from shareholders, who voted strongly in favour of resolutions calling on the company to align its capital expenditure and lobbying with a 1.5C pathway,” said Dan Gocher, Director of Climate and Environment at ACCR. 

Today’s result at Origin comes as the Institutional Investor Group on Climate Change (IIGCC) published its decarbonisation strategy for the electric utilities sector, to help investors engage with companies, including AGL and Origin, as part of the Climate Action 100+ stewardship initiative. 

One of its key expectations, which are based on the sector reaching Net Zero by 2040, is that firms align their spending with a 1.5oC pathway, “including an immediate halt to investments in new coal generation and a commitment to ensure any new natural gas generation will be net zero by 2040 globally and by 2035 in advanced economies”. 

In its report Global Sector Strategies: Investor interventions to accelerate net zero electric utilities the IIGCC stated that of the 68 publicly listed power companies assessed by the Transition Pathway Initiative, only Denmark’s Ørsted has a decarbonisation plan consistent with the International Energy Agency 1.5oC pathway. 

Staying with Australia, mining giant Rio Tinto has today committed to halve its Scope 1 & 2 emissions by 2030, “more than tripling its previous target”, it said. The Anglo-Australian firm added that it was now also eyeing a 15% reduction in Scope 1 & 2 emissions by 2025. To support these goals, the miner said it would make $7.5bn in direct investments between 2022 and 2030.  

The company, however, did not commit to bigger reductions for its indirect emissions (Scope 3), currently 30% by 2030. 

ACCR’s Gocher described the new targets as “very ambitious” and, in reference to BHP’s recently unveiled transition plan, said it represented “what climate action for a diversified miner should look like”. 

Reuters reported that Rio Tinto’s shares were down 3.1% in London this morning off the back of the announcement.