The AGL Energy Limited (ASX: AGL) share price is flying higher this morning. It is currently up 4.93% to $5.96.
This comes after the company’s executives copped a grilling from shareholders at its annual general meeting (AGM) on Wednesday.
In a heated exchange, shareholders voiced their concerns on a number of issues with the company’s response to climate risk.
Let’s take a closer look.
What went down at AGL’s AGM yesterday?
The major takeout was that 55% of shareholders voted in favour of the energy giant setting short and long-term emissions targets in accordance with the Paris Agreement.
This is despite AGL’s board recommending shareholders vote against the proposition.
However, of the 6 resolutions put forward at the AGM, item 6 was was a two-part segment. The “Paris Goals and Targets” item was called resolution 6B. The former, 6A, was an “amendment to the (company’s) constitution”.
Voting to amend AGL’s constitution did not receive broad voting support.
This is important – because in a bit of a loophole, according to AGL’s chair, Peter Botten, the Paris Goals resolution was “contingent” on the constitution being amended.
So even though the majority 55% of shareholders voted in favour of AGL to adopt decarbonisation targets, the resolution was not passed.
Not only did the majority of shareholders vote in favour, but it was also the largest ever contested vote in Australian corporate history – without board support. As such, yesterday’s vote was considered an “advisory vote” only.
Botten also said AGL’s board “does not believe it is in the best interests” of the company to make the transitional “commitment unilaterally” into renewables.
“The task is to create a glide path rather than a crash landing,” Botten explained. He noted that policy and investment reasoning are also key factors in making any change as smooth as possible.
Nonetheless, even though AGL acknowledged “more is required” and that work is underway to “define the decarbonisation roadmaps” for the upcoming demerger, AGL remains without short and long-term decarbonisation goals, for now.
AGL share price snapshot
The AGL share price has struggled this year to date, falling 52% since January 1.
The shares have also fallen by about 60% over the past 12 months. That’s well behind the S&P/ASX 200 index (ASX: XJO)’s return of around 25% over the last year.