October 8, 2020 Read More →

BlackRock backs resolution that would have forced early closure of AGL coal plants in Australia

The Sydney Morning Herald:

BlackRock, the world’s largest asset manager, has thrown its support behind a push for Australian energy giant AGL to bring forward the closure dates of its remaining coal-fired power stations.

AGL faced an investor revolt on Wednesday, as more than 20 per cent of the company’s shareholders backed a resolution for the board to align the retirement of the Loy Yang A power plant in Victoria and its Bayswater station in New South Wales with a strategy to limit global warming to 1.5 degrees. This would mean shutting Loy Yang A, the largest brown coal fired power plant in Victoria, at least 12 years before AGL’s planned 2048 closure.

While prominent local superannuation funds including Aware Super declined to support the motion, the $10 trillion BlackRock, which ranks as one of AGL’s top shareholders, voted in favour of it.

AGL is Australia’s largest energy generator and heaviest carbon emitter, accounting for 8 per cent of national emissions. Like many top polluters, it has faced a rising tide of pressure both from activists and increasingly climate-conscious major investors to improve its carbon credentials and, in particular, reduce reliance on thermal coal.

The resolution for an accelerated coal exit, prepared by the Australasian Centre for Corporate Responsibility (ACCR) and co-filed by 100 shareholders, gained 20.4 per cent of shareholders’ support on Wednesday, but was not supported by the board and several other prominent AGL investors.

Investors who backed the resolution expressed concern not only about the emissions generated by AGL’s remaining fleet of coal generators, but also the increasingly significant maintenance costs required to keep the ageing and failure-prone facilities running. AGL’s expenditure to sustain its existing operations has more than doubled from $255 million in 2014 to $536 million in 2020, one investor said. BlackRock noted that Loy Yang A would be more than 60 years old if it was kept in service until 2048, raising operational concerns in relation to reliability and safety.

[Nick Toscano]

More: BlackRock turns up the heat on AGL’s coal exit plans

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