Three global asset managers who are shareholders in Japan’s Electric Power Development Co (J-Power) are supporting a shareholder resolution to force the company to strengthen its climate policies.
Man Investments, Amundi and HSBC Asset Management are calling on the Japanese power plant owner to set and disclose credible short and medium-term emissions reduction targets that align with the goals of the Paris Agreement on Climate Change and to disclose how remuneration policies relate to the company’s emissions reduction targets.
The resolution filing states that J-Power’s targets are not science-based nor Paris-aligned and that the company has not detailed a credible plan for the retirement of its coal-fired power station. The company has been spending money on technologies to prolong the life of the plants, involving what they describe as “speculative” technology such as ammonia co-firing.
The shareholders are also planning to vote against the director who is responsible for J-Power’s current decarbonisation strategy, Blue Mission 2050.
Last year, the shareholders filed Japan’s first climate shareholder resolution, proposing that J-Power set emissions reduction targets.
However, they believe J-Power did not adequately respond to the resolution, even though 25 per cent of shareholders voted in favour and contend that the company is not doing enough to decarbonise.
“We are concerned that J-Power’s continued reliance on co-fired ammonia as a solution in its climate plan is not compatible with global decarbonisation targets, and continuing down this path will impact long-term shareholder value,” Jason Mitchell, Head of Responsible Investment Research at Man Group said in a statement.
The head of ESG research at Amundi, Caroline le Meaux, said J-Power’s strategy “bets against the success of the Paris Agreement, and risks shareholder value in the process,” and noted that OECD countries are expected to phase out coal generation by 2030.
The Australian Centre for Corporate Responsibility supported the climate resolution and shareholder engagement with J-Power.
“J-Power’s leadership has demonstrated no understanding of how their strategy needs to evolve in line with investor expectations. Despite last year’s vote and several meetings this year with Director Kanno, we have seen no material progress,” ACCR executive director Brynn O’Brien said in the statement.
J-Power has a 15 per cent shareholding in the Clermont Coal Mine in Queensland, owns 10 per cent of the Maules Creek Coal Mine and a 7.5 per cent investment in the Narrabri Coal Mine in 2008, both of which are in New South Wales.
The company’s Blue Mission 2050 involves developing 15,000 MW of renewable energy, a nuclear power plant, phasing out coal power plants or switching them to biomass and ammonia co-firing, and using hydrogen in power generation and for fuel production.
The move by investors against J-Power comes as more shareholder activists increasingly glavanise opposition to fossil fuel companies. Woodside for instance faced a shareholder backlash last month on its remuneration report over its reporting of climate-related issues.
Woodside chief executive Meg O’Neill branded the opposition as “extremist shareholders” but 35 per cent of shareholders voted against the re-election of former Howard government minister Ian Macfarlane to the board alongside a “barrage of questions” on environmental concerns.
See our article last year on the rise of opposition to The company after it was accused of gaslighting the United Nations, the International Energy Agency, investor groups and the climate concerns of the community at a “chaotic” annual general meeting ion May 2022.
Revelations included that Woodside allegedly attempted to breach Australia’s international ocean protection commitments by proposing to dump a decommissioned oil rig off the coast of Western Australia.