AGL (ASX:AGL) share price falls amid fresh climate credentials pressure

A shareholder resolution set to be put to AGL later this month has reportedly gained more support.

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The AGL Energy Limited (ASX: AGL) share price is slipping this morning following reports it’s facing increased pressure to set better climate targets.

An upcoming shareholder resolution has reportedly received support from a proxy advisor. The advisor is apparently urging AGL shareholders to vote in favour of a motion demanding AGL implement climate targets for the short, medium, and long term prior to its planned demerger.

Right now, the AGL share price is $6.26, 1.26% lower than its previous close.

Let’s take a closer look at the rumoured shareholder resolution.

AGL under increasing climate pressure

The AGL share price is falling as a push for the company to improve its climate-related disclosures reportedly gains traction.

The resolution was brought about by the Australasia Centre for Corporate Responsibility (ACCR) last month.

It could see shareholders pressuring the company to disclose emissions reduction targets. It also asks AGL to detail how its proposed demerged companies’ capital expenditure will align with said targets. Finally, the ACCR is calling for AGL to answer how the companies’ remuneration policies will incentivise progress towards the targets.

According to reporting by The Australian, proxy advisor Institutional Shareholder Services (ISS) has told its investors it’s supporting the resolution. Further, it has supposedly recommended its shareholders vote in favour of the ACCR’s push.

It reportedly stated the resolution would help inform shareholders about AGL’s demerger ahead of a shareholders’ vote on the split. The publication quoted the advisor as saying:

[A]dditional disclosure is needed regarding the expected assumptions on future power prices and maintenance and fuel cost and demand for fossil fuel power generation.

AGL recently announced shareholders will have the chance to have their voice heard on the climate reporting of both AGL Australia and Accel Energy at their first respective annual general meetings. The AGL share price gained 0.7% on the back of the news.

Additionally, an AGL spokesperson stated AGL plans to set separate climate commitments for Accel Energy and AGL Australia. They said:

(Climate commitments will enable) each business to focus on their respective strategic opportunities and challenges presented by the accelerating energy transition.

However, ISS’s reportedly urging investors to push the company to provide clear climate goals sooner. It said doing so will help them understand AGL’s climate risks ahead of the major shakeup.  

AGL share price snapshot

The AGL share price has fallen 47% in 2021. It is also currently 58% lower than it was this time last year.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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