AGL’s three coal power stations make it Australia’s biggest greenhouse-gas emitter. Its annual general meeting takes place on Thursday and on the agenda is a resolution calling for the company to cut its greenhouse gas emissions in line with the goals of the Paris Agreement.
That’s going to require some significant changes to AGL’s strategy. Its announcement two years ago on retiring the Liddell power station in 2022 was met with a furious reaction from the then Turnbull government, which pleaded with AGL to sell the power station, even offering up taxpayers’ money to keep Liddell operational. (Although “operational” is a pretty generous term to apply to Liddell. It typically runs at about half capacity and has broken down 13 times in less than two years.)
Of course, if AGL does want to run its power stations beyond 2030, it will find the pool of available finance drying up. Earlier this year, Commonwealth Bank said it would exit thermal coal by 2030, while insurers Suncorp and QBE have both committed to be out of thermal coal by 2025 and 2030, respectively. AGL could just turn to the international insurance market, but even today you’ll find the likes of Aviva, Allianz, AXA, Swiss Re and Zurich all unwilling to cover coal power stations.
At the end of the day, it’s hard to see AGL wanting to pursue a business strategy that relies on expensive, unreliable, old coal power stations being kept open just to satisfy the ideology of the federal government. However, it could probably use some support from investors with a vote in favour of Paris-aligned targets for reducing emissions.
The question now is whether super funds will put their money (by that I mean their members’ money) where their mouths are. If investors want to be treated with integrity when demanding governments take strong action on climate change, they need to at least demonstrate they will manage their own polluting companies the same way.
Julian Vincent is executive director of Market Forces, an affiliate project of Friends of the Earth Australia.