Shareholder Activism

Shareholder Activism 2015

This page lists companies Ethinvest has engaged with in 2015, both in cooperation with and on behalf of clients and associated organisations. We are committed to promoting and upholding responsible environmental, social and corporate governance practices and see our shareholder advocacy as a powerful way to effect positive changes.


Pot on Gas Burner

With the support of some Ethinvest clients, the Australian Centre for Corporate Responsibility (ACCR) lodged a resolution at the AGL Australia 2015 Annual General Meeting. The resolution requested that AGL amend its constitution:

At the end of Clause 31 ‘Notice’ the following new sub-clause 31.5 is inserted:
“That, (a) the board must prepare a business model that demonstrates sufficient diversification of the power generation and supply activities of the company to ensure continued profitability under pathways that limit the world to 2˚C warming; and (b) include in future annual reporting to shareholders, at reasonable cost and omitting any proprietary information, information about ongoing power generation and supply chain emissions management benchmarked against that model."

Shortly after the resolution was lodged, AGL announced its “path to decarbonisation” in which they promised to “not build, finance or acquire new conventional coal-fired power stations in Australia (i.e. without carbon capture and storage)”. It is clear from its timing, just before the AGM, that AGL was making this commitment because of the pressure from shareholders. At the AGM, 5.1% of the shares voted supported the resolution with 2.9% abstentions.


We welcome the recent moves from AGL Australia to begin operating in a 2 degrees carbon-constrained future.However, their targets are still much too far away (2050) so Ethinvest will continue to monitor their activity in this area of policy.



Ethinvest wrote to Australian Ethical Investment in June, asking “if the decarbonisation route you are taking could be made more appealing to potential investors by making a public commitment to avoid the "Underground 200" - fossil fuel companies you would probably never invest in anyway - which would help reinforce the very hard edges to AEI screening.” We believe that making clear statements about decarbonisation policies is an important part of ethical investment.


Stuart Palmer, Head of Ethics, replied asserting that “we don’t invest in any of the 2014 or 2015 ‘carbon underground’ companies” and told us that “One potential difficulty we’ve discussed is that to make such a definitive statement would require us to review each company, a significant piece of work. Whilst most appear obvious on the surface, as we know, business models change.”

You can see for yourself who they invest in here.



In November 2015, following prolonged contact with Ethinvest and Market Forces, Commonwealth Bank made amendments and updates in the areas of their Group Environment Policy, carbon emissions and climate disclosures, the embedding of ESG lending commitments, a new Wealth Management Responsible Investing Framework, and a new Human Rights Position Statement.

“Commonwealth Bank has been around for more than a century. We want to continue to be successful well into the future. That means we need to be cognisant of the long-term impact our business has on the economies and communities in which we operate. An important part of that is rigorously and consistently examining our lending and investment decisions to understand and assess environmental and social impacts. The policies and practices that we are announcing today enable us to do that. They also provide transparency so we can be held accountable by our stakeholders for the decisions we make.”

- Commonwealth Bank Managing Director and Chief Executive Officer, Ian Narev

To read the full document outlining Commonwealth's new policies and practices, click here.


The Executive General Manager personally wrote to Ethinvest on the day of this important announcement for their new policies and practices strategy. To read the full correspondence, click here.


Stack of Envelopes

IRESS Limited is an Australian software company specialising in the development of software systems and services for financial markets and wealth management. Ethinvest recommeds IRESS to clients because of the potential for IRESS to substantially reduce paper usage in what is a very paper-intensive industry. However, IRESS is now one of the largest ASX companies that does not produce a sustainability report. Ethinvest wrote to IRESS in May, encouraging the Board to move towards developing a sustainability report. We received the following response:

 “We understand that there is a growing importance attached to sustainability and its reporting, and will be addressing this issue with the guidance of the Board, with a view to reviewing IRESS’ exposure to material economic, environmental and social sustainability risks and will report on those risks as part of our Corporate Governance Statement in the Annual Report."

- IRESS Chief Executive Officer, Andrew Walsh



Ethinvest spoke with the Head of Corporate Responsibility Strategy at NAB in September to congratulate them on their statement on the Carmichael Project (read the Sydney Morning Herald coverage here) and their trajectory of improved disclosure. At this time, however, NAB was yet to give a statement about a ‘2 degree world’ and solidify their stance on combatting climate change. Pleasingly, on November 5, the company published this agenda, as part of their Climate Change Commitments, joining the chorus of climate change action.


Their release outlines five commitments that will be undertaken by NAB:

  1. Undertake financing activities of A$18bn over the seven years to September 2022 to help address climate change and support the transition to a low carbon economy

  2. Source 10% of NAB’s Australian electricity demand from new and additional renewable energy projects by 2018

  3. Engage responsibly on climate policy

  4. Report climate change information through mainstream reporting channels

  5. Commit to putting a price on carbon and align to the UN Global Compact’s business leadership criteria on carbon pricing

- NAB's Climate Change Commitments



Following the international campaign to ban neonicotinoid pesticides, which studies show can harm or kill bees and other pollinators, Ethinvest contacted Select Harvests to ask if it uses neonicotinoids across its almond farms. The company responded that these pesticides were used in the past for aphid control, and they were used on less than .5% of the entire orchard. Select Harvests have now sourced an alternative product and neonicotinoids have not been in use for several years. Furthermore, the company has identified that bees are a vital part of its operations and have put in place measures to protect and encourage bee populations. It provides wild flower ‘refuges’ for the bees to rest in as well as drums of water placed near bee hives, so that bees don’t have to travel too far for water. While bee populations in Australia don’t appear to be affected by some of the some of the conditions that bee populations have overseas, like colony collapse disorder and the varroa mite, Select Harvests is dedicated to ensuring that they have a healthy bee population throughout its operations.


Chemical Plant

Ethinvest wrote to the General Manager of Investor Relations seeking clarification and response to allegations in the Sydney Morning Herald about the way Transpacific disposes of chemicals that it extracts from the waste water (specifically the NSW banned chemical compound BTEX) in their Hunter Valley operations at Kooragang Island. We received the following response:

“It is important to note that the media have reported several allegations that are false, along with others that are misleading and unsubstantiated.

Statement of Facts:

  1. Allegation - We were ‘fined’ or ‘penalised’ $30,000 for sending anything to Hunter Water
    Fact - We were not fined or penalised. We were invoiced an additional $30,000 for the treated tradewaste water (from all our customers not just AGL) we sent Hunter Water over the period 4 July 2014 to 5 November 2014. These are normal business charges we were invoiced over the period.

  2. Allegation - We dumped into the sewer
    Fact - We didn’t. We discharged treated tradewaste water into the sewer which connects with Hunter Water’s treatment plants. This is the way the system is supposed to work. Media reporting that we ‘dumped’ is wrong and sensationalist.

  3. Allegation - Flowback water was discharged into the sewer
    Fact - Not one drop of flowback water has been discharged into the sewer network. Our EPA licenced facility exists to treat liquid wastes. In doing so, we provide a safe and sustainable solution for the community and environment. We received AGL’s flowback water, we treated it and extracted the diluted additives, so that it became treated tradewaste water. The treated tradewaste water was then discharged to Hunter Water and met all EPA requirements. 


As the largest processor of liquid waste in Australia, Transpacific protects the Australian environment and community on a daily basis. We operate under numerous authorities and licencing conditions across the country and process millions of litres of different types and varying levels of contaminated waste at our plants every year.


Our core business services align with ethical environmental practices and despite mis-reportage and sensationalist claims in the media, I can assure you this remains the case.


Our expertise in the safe and responsible collection, treatment and disposal of liquid wastes provides a solution for industries and households that wish to rid their properties of oils, toxic sludge and other contaminated liquid wastes.


We are very much part of the solution, not the cause of the problem.


Whilst I appreciate your concerns about our involvement in the coal-seam gas industry, please note that without our services the environment and community would be impacted more severely by the wider resources industry.


It is our belief that providing a safe and sustainable solution to AGL’s coal-seam gas disposal needs near Gloucester - for a pilot project approved by regulators and the NSW Government – is not fully appreciated in the wider context of environmental management.


For a more comprehensive view of our determination to operate sustainably, may I refer you to our 2014 Sustainability Report


- Transpacific Group Investor Relations Manager, Frank Sufferini

Pleased, Ethinvest relayed this information to shareholders who were mostly appreciative. However, one of our clients raised further concerns about how wastewater is actually disposed of. In relation to assurances that waste water is not released into sewerage systems, our client wanted to know where it was released.


Transpacific chose to reiterate their response that “at the time of the reports, Hunter Water had not requested that we test and provide results for BTEX and prior to that request, there had never been a direction – or indeed any requirement – from Hunter Water for us to test for BTEX at Kooragang. So in short, Hunter Water’s recent request was its first.” (Frank Sufferini)


Ethinvest will continue to encourage Transpacific to publish a document outlining its commitment to best practice and what that looks like as part of the company's sustainability reporting. Showing that BTEX testing is done as a matter of course, and not just in reaction to authority requirements, would provide peace of mind to shareholders concerned about CSG’s wastewater impacts.


Coal Mine 2.jpg

In March, Ethinvest and its clients were disappointed to learn that Westpac refinanced Whitehaven Coal’s debt, enabling the progression of the Maules Creek mine. The Maules Creek mine alone will produce enough coal to equal the entire energy requirements of New Zealand, and financing mines like this appears to be strongly at odds with limiting climate change to 2 degrees. While Maules Creek in isolation does not undermine the 2 degree target, it is projects like this that will have to be closed down (and become 'stranded assets') if we are to achieve necessary reductions.


Westpac’s decision disappointed those of us who are making the case that the banks are not 'all the same' and seems to contradict their position statement in which the company asserts that its 'priority areas include managing carbon and environmental risk, addressing our own environmental footprint, as well as working with customers, employees and suppliers'.

We wrote to the Westpac sustainability team in March to ask them about this and in response, they wrote that;

"All transactions are subject to our Sustainability Risk management framework and ESG credit risk assessment processes as part of our normal credit risk procedure. This includes identifying and reviewing climate change and environmental risks and issues for any particular asset, client and industry sector. While it is true that current commodity prices are at cyclical lows, these projects typically take a longer term view of forecast demand, particularly from emerging economies where growth is still in its infancy. This is why we always assess these projects on a case by case basis to balance financial and environmental long term factors.


In regards to your specific question on how our ongoing support for the natural resources industry aligns with our commitment to managing the Two Degree Economy, our Climate Change and Environment Position Statement released last year states that:


“A Two Degree Economy will mean a fundamental transformation in our energy infrastructure with significant investment implications. Over the medium term fossil fuel energy generation will continue to play a major role in the economies where we operate.  But increasingly, so too will wind, solar, geothermal and other new sources of energy. We support the shift to a more sustainable economic model that is less dependent on fossil fuels while recognising the importance of responsibly managing the transition to support sustainable economic development.”


In practice this means that we do differentiate within the sector in how we invest, and are looking to carefully manage the longer term implications for the industry of emerging global carbon constraints. We have also indicated that we will continue to support existing customers that are seeking to improve the sustainability of their business."


- Westpac Bank Executive Director: Emissions and Environment, Emma Herd

While comprehensive, Ethinvest is not satisfied with this response and will continue to monitor the situation, encouraging Westpac to work towards environmentally and economically sustainable investments in the future.  


Contract Review

After the pressure of the 2014 AGM, ANZ released the following Climate Change Statement in which it states that one of its primary actions will be “maintaining strong carbon risk management and clear disclosures for our investors (such as our credit exposures to coal, oil and gas)”


ACCR celebrated, “faced with having to distribute carbon-related resolutions to millions of shareholders, all of the big four banks have improved their carbon disclosure”


With still more to be improved in 2015, Ethinvest, along with Market Forces, helped the ACCR lodge a resolution at the next ANZ Annual General Meeting which called upon the board to provide more information to shareholders about exposure to carbon-intensive industries, set targets for reducing this exposure and to make it easier for shareholders to move resolutions at AGMs.


10.52% of shares voted for the resolution to give shareholders more rights to tell company boards what they think about company policies.

In 2014 the climate change section of the resolution received 3.1% of the vote. The movement for corporate environmental responsibility is gaining momentum, and this year's resolution received about 5.4% of the proxy vote. If this trend continues, the resolution could pass by more than 85% by 2019!

To read ACCR's full debrief of the AGM, click here. 



Ethinvest approached the Investor Relations team to raise issues about environmental and social impacts of the Whitehaven mine at Maules Creek, funded by Colonial First State (CFS). The mine is be one of largest open cut coal mines in Australia, producing mainly thermal coal, as well as metallurgical coal and has reserves to support 30 years of production. Investors were concerned by the losses recorded by Whitehaven Coal, as well as the risk associated with investing in a resource that is not compatible with a climate-responsible future.

CFS Global Asset Management’s Head of Responsible Investment for Asia Pacific responded to our contact in great detail. Following are some excerpts.

“For our actively managed funds WHC is held in the small company funds of both our Australian equity teams. By our own calculations, on a cumulative basis over the different periods we have held WHC, one fund has profited from the investment and one has made a small loss which can be attributed to a number of factors also impacting other resource companies. In aggregate the investment has been profitable [...] Our teams have visited the site [Maules Creek Mine] and spoken to different stakeholders including farmers and the local community. We have followed the court proceedings and activities of groups opposed to the development, and attempted to assess their claims against the company’s. There are obviously limitations in any investor’s ability to fully validate claims and counter claims and so we place significant weight on regulatory processes and approvals which also assess these issues [...] With this in mind, and in terms of the longer term prospects of the company, we believe our valuation of the company has incorporated the various financial and non-financial risks you have highlighted. We will continue to monitor the company’s progress in regard to these issues and would welcome you bringing these to our attention in future. We will also continue to engage with the company and reinforce our expectations regarding their performance in these areas.”


– CFS Head of Responsible Investment for Asia Pacific, July 2014

To read the Colonial First State Global Asset Management Responsible Investment and Stewardship report, click here.



After hearing the concerns of clients, Ethinvest approached Hunter Hall about the surprisingly large amount of capital invested in gold mining company, St Barbara (SBM). Hunter Hall acknowledged that it had received similar feedback across their investors, but several weeks after we brought this to the company's attention, it is still invested in SBM.


We’ll be keeping a watch on this investment and maintaining our constant dialogue with Hunter Hall.



The Kathmandu 2015 Sustainability Report has some impressive information regarding their supply chain yet there is always the matter of how rigorously it’s implemented. The company seems to favour long term relationships with suppliers (95% of suppliers have been connected more than 5 years) which supposedly allows Kathmandu to help the supplier improve its working conditions. However, the report says that, “more than 90% of our suppliers are in Asia, where local laws and standards to protect workers and the environment are not as stringent as our own” (pg 12). On the positive side, the report acknowledges a poor audit score in a supply factory in the past (58%) which has dramatically improved (to 86%) after factory cooperation on a number of social and environmental requirements (pg 20). This year, the company began unannounced audits with corrective action being taken as needed (pg 11).


According to the Baptist World Aid Fashion Report 2015, Kathmandu scores a pleasing B overall thanks to their strong Policies and Traceability & Transparency. However, the company scores poorly in the sections measuring Monitoring & Training and Workers' Rights (pg 3). Worryingly, in regards to providing living wages to its workers, Kathmandu fails (pg 5). We contacted Kathmandu in search of more specific information about their implementation of a ‘living wage’ for supply chain workers but have received no response to date.


Power Plant

In an attempt to encourage more comprehensive emissions reporting as well as more effective action against climate change, the following resolution was proposed at the Origin Energy AGM in October, in conjunction with ACCR and Ethinvest:

Special resolution to amend the constitution

At the end of Clause 8.3 'Notice of general meetings' the following new sub-clause 8.3(e) is inserted: "Each year from 2016, at reasonable cost and omitting any proprietary information, routine annual reporting will include further information about ongoing power generation and supply chain emissions management, generation portfolio resilience to the International Energy Agency's (IEA's) scenarios; relevant strategic key performance indicators (KPI's) and executive incentives; and our public policy positions relating to climate change.

On the morning of the AGM, Origin Energy announced that it would be the first company in Australia, and globally, to commit to all 7 'We Mean Business' initiatives - a big step in the right direction. Even though the resolution was not supported by the necessary majority of shareholders, the announcement was a clear indication that Origin had heard and reacted to the submission. Had it announced this commitment earlier, ACCR would have withdrawn the resolution altogether.


Ethinvest will continue to support those who campaign for better disclosure and climate responsibility.


Wire Fence Tensioners

Transfield have been a contentious company in discussions about corporate responsibility as their involvement with the Department of Immigration’s offshore processing policy continues. 


After continuing to engage with Transfield over their contract in Nauru and on Manus Island in the past, in April this year, Christian Super confirmed that it now excludes Transfield from all portfolios on ethical grounds. It was Christian Super’s view, which Ethinvest shares, that the increasing evidence of failure to live up to community standards (whether directly by Transfield personnel or not) meant that the company bore enough moral responsibility to be removed. 


Ethinvest also contacted HESTA Superannuation in March about its engagement with Transfield until in August, after persistent pressure from organisations as well as associates, HESTA announced its divestment from Transfield Services. 


Westpac Plastic.jpg

The result of more than 300 documents wrapped in plastic.

After receiving more than 300 documents wrapped in plastic in a single morning, Ethinvest wrote to Westpac to encourage them to consider the environmental impact in their mailing practices. To accomplish this, we urged the bank to use sustainably sourced paper envelopes instead of plastic.

"For the particular offer this [document] relates, the mailing project was outsourced to Link [Market Services] and on to their mail house, Link Digicom. [...] Unfortunately the matter of biodegradable wrap was not specified (something we normally do) – due to the sensitivity of the project we were unable to bring external suppliers into our confidence until the last minute.

In the normal course of business we use a combination of envelopes and only use shrink wrap for the bulky annual report items – annual reports and annual reviews (less than 10% of shareholders). Where possible we specify biodegradable wrap. Currently we have over 57% of our registry with emails, having almost doubled in the past 5 years. We have 36% nominating to receive no paper and 15% receiving no paper except dividend statements. As you can therefore see, we encourage communications via electronic means and are aware of the impact on the environment."


- Andrew Bowden, Head of Investor Relations

In response to this, Ethinvest urged Westpac to provide feedback to Link to help them move in a more positive direction next time. Given the potential cost savings to companies like Westpac, and to groups like Ethinvest, we are hoping that the registries develop a 21st century solution!



In October 2015, Market Forces and Ethinvest were able to broker a satisfactory agreement with Westpac about their commitment to combatting climate change by offering to withdraw a shareholder resolution at their AGM in October in exchange for concrete statements and actions.

Ethinvest was involved in prompting the following actions:

Westpac agreed to read a statement before the AGM:

Westpac is committed to operating, both directly and indirectly through our businesses and the activities we finance, in a manner consistent with supporting an economy that limits global warming to less than two degrees. Westpac will continue to evolve its frameworks, policies and position statements, linked to concrete action to ensure we are arranging, lending and investing activities that support a 2 degree world, based on research into the carbon intensity of our activities. In doing this we will continue to engage widely with stakeholders – including our shareholders (both institutional and retail), customers, communities and our people.


Westpac then agreed to achieve this goal through a number of actions:

Current actions include:

  • Refreshing a number of Position Statements, including financing energy.

  • Establishing a Responsible Investment Position Statement setting out our approach to the consideration of ESG issues, including climate change, within BT Finance Group.

Further actions include:

  • Assessing the longer-term economic impacts of limiting global warming to two degrees Celsius, through undertaking sector-based scenario modelling. This research will enable us to rigorously assess risks and opportunities of operating in a Two Degree Economy, and together with the outcomes of the UN Climate Conference in Paris, inform Westpac’s future target setting. We will provide an update in our half year sustainability update (May 2016), and reporting in our FY16 annual reporting suite.

In the subsequent 2015 Sustainability Report (released November 2015), Westpac agreed to set out the above actions and include reporting on the carbon intensity of 42 investment options across its retail and corporate superannuation products. Westpac will use this data to better understand where risks may lie within its portfolios, and to also provide customers with greater clarity of the investments they hold. Westpac also agreed to refresh their support for the CDP Road to Paris commitments, now known as ‘2015 CDP Commit to Action’ and ‘We Mean Business’ commitments.


Ethinvest believes that Westpac has long been the front runner in terms of sustainability issues in comparison to the other Australian major banks. We have been able to foster good relationships with some of its team and we will continue to follow their progress with interest.

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