Shareholder Activism

Shareholder Activism 2014

In 2013 and 2014 Ethinvest continued to build momentum on a range of initiatives to improve the environmental and social performance of Australian listed companies. 

 

There are many links throughout this page which you can click on for further information. The links are shown by underlined text.

This year Ian Dunlop, past Shell Senior Executive and past head of The Australian Coal Association nominated for the board of BHP. Since leaving his previous positions in the resources indsutry, Ian has become a strong advocate for the need to urgently address the issue of climate change. His statement to support his candidacy included the following:

 

"In my view, the greatest challenge the world, and BHP Billiton, now faces is global warming caused by greenhouse gas emissions from human fossil-fuel consumption. The extent and speed of warming has been badly underestimated. Current policies are leading to an average surface temperature increase in excess of 4 degrees celsius, compared with the ‘official’ target of less than 2 degrees celcius. This (implies) a world of 1 billion people, not 7 billion, in which business as we know it is not possible. It is nothing less than suicidal to continue investment in fossil-fuel expansion.

 

“The current board must take action by changing investment priorities far more extensively than the company has recently announced. I consider that my particular mix of experience and global perspective would complement existing board member skills in achieving what must become top priorities for BHP Billiton and its shareholders."

 

BHP released a statement urging shareholders to vote against Ian Dunlop. Against such adversity he received a very respectable 3.5% of the vote at the AGM and much media coverage. See ABC media report 'Climate change the big ticket item at BHP Billiton AGM in Perth'.

 

Ethinvest played an important role in both supporting Ian Dunlop's candidacy and in urging BHP shareholders to vote. We also wrote to a number of instititional investors urging them to support Ian Dunlop's candidacy. To our knowledge, two institutions, including Local Government Super, voted in favour of Ian Dunlop to be appointed to the BHP board.

 

Ian Dunlop's nomination to the board of BHP was extremely successful in provoking a broad discussion about climate change in Australia and the urgent need for global action.

BHP, CLIMATE CHANGE &

IAN DUNLOP

Following reports of Harvey Norman using timber from native forests for its flooring and furniture range, we wrote to them asking them to provide further information regarding these claims. We have yet to receive a response.

HARVEY NORMAN

Following reports of slavery in the thai fish trade, we wrote to both Wesfarmers and Woolworths to ask them to rule out using the company named as a supplier. We have yet to receive a response.

SLAVERY IN THE FISH TRADE

Oxfam released a report in April 2014 that named companies that are involved in taking land from communities without proper compensation. These 'land grabs' are largely driven by the international demand for agricultural commodities like sugar, palm oil, soy and timber.

 

In the report, Oxfam details connections between these companies and Australia's big four banks. Ethinvest has both written and met with representatives from all four banks to discuss these issues and our discussions are ongoing. 

OXFAM REPORT & THE BIG FOUR BANKS

The Australia Institute, 350.org and Market Forces joined together to release this comprehensive report - Climate Proofing Your Investments: Moving Funds out of Fossil Fuels. Included in the report is a list of companies in the ASX 200 who have direct or indirect exposure to fossil fuels.

 

We wrote to the companies below. A template of the letter can be found here.

 

Where we have received a written response you can access it by clicking the link underneath 'Response Received'.

CLIMATE PROOFING YOUR INVESTMENTS

This year Ethinvest has been strengthening relationships with Australasian Centre for Corporate ResponsbilityGreenpeace, Market Forces, 350.org, Australian Youth Climate Coalition, The Australia Institute and The Sunrise Project.

 

Our clients were able to provide proxy votes for members of a number of these groups to attend the AGMS of:

 

  • ANZ Bank

  • BHP Billiton

  • Commonwealth Bank

  • Lend Lease

  • Origin Energy

  • Westpac Bank

  • Whitehaven Coal

 

Campaigners were able to ask questions "from the floor" of these AGMs and were able to make climate change issues front and centre of the agenda of each meeting they attended.

AGM PROXY VOTES

Like many of our clients, we have become increasingly concerned about coal seam gas production in Australia. 

 

We wrote to APA, Australia's largest natural gas infrastructure business, asking to what extent they provided coal seam gas through their pipelines. Coal seam gas extraction has been widely criticised due to environmental concerns, particularly relating to ground water pollution. They responded:

 

"We (like our gas utility peers) do not have any control over the supply source of the shippers which is all inter-mingled once the gas supply is in a pipeline being transported to where it’s required. APA simply has contracts with shipper’s to move gas from one location to another and as long as it meets the gas quality specifications,  we cannot refuse to transport due to the supply source."

 

As a result of this many of our clients decided to divest their APA holdings. 

APA GROUP & CSG

Earlier in the year we met with Peter Hall, Hunter Hall's founder and Chairman and subsequently with David Deverall, Hunter Hall's CEO. We suggested that Hunter Hall might consider divesting from fossil fuels. Always at the forefront of ethical investing, Hunter Hall grasped the challenge and announced they would divest their ethically screened portfolios from all direct investments in fossil fuels.

 

Peter Hall had this to say:

 

"We know from climate science that burning fossil fuels is having a powerful and accelerating impact on climate and the environment... the decision to end fossil fuel investments outright enables Hunter Hall to focus on a future with new opportunities. After observing the gathering momentum of fossil fuel divestment campaigns and consulting a number of our supporters, it is clear climate change is an important issue to many retail and institutional investors”.

 

Hunter Hall is the first fund manager in Australia to make such an announcement joining other fund managers and endowments around the world. We heartily congratulate them.

HUNTER HALL DIVESTS FOSSIL FUELS

Ethinvest wrote to the Listed Investment Companies below to ask

if they have any policies with regard to excluding investment in companies that are directly engaged in the production, distribution, or sale of thermal and metallurgical coal, gas (conventional and unconventional) and oil, and the ownership and operation of coal and gas fired power stations.

 

 A sample of the letter can be found by clicking here.

 

Where we have received a written response you can access it by clicking the link underneath 'Response Received'.

EXCLUDING INVESTMENT IN FOSSIL FUELS

You can review previous reports below:

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