How a billionaire’s climate activism forced Australia’s top polluter to take a U-Turn

A billionaire campaigner forced a key Australian polluter to capitulate over its corporate strategy in one of the most aggressive and successful examples of investor-led climate activism.
AGL Energy Ltd. abandoned a plan to split its retail and power-generation assets — and said its chief executive officer and chairman will exit — after pressure from technology tycoon Mike Cannon-Brookes, who became the utility’s largest shareholder this month to hasten efforts to curb greenhouse gas emissions.
The firm’s proposal, which had been scheduled to be voted on within weeks, would have seen Australia’s biggest electricity generator run its coal-fired plants for another two decades, and anticipated the power business would not hit net zero emissions until about 2047.
Cannon-Brookes has argued that the coal plants should be closed far sooner, and that splitting AGL in two would destroy value and give the new companies less ability to pursue a quick transition to cleaner energy. AGL is Australia’s largest emitter of scope-one greenhouse gases.Best of Express PremiumPremiumPremiumPremiumPremium
AGL declined 1.7% in Sydney trading Monday, reflecting concern over the company’s prospects as it seeks new leadership and a fresh plan for the future. The shares have plunged more than two-thirds from an April 2017 high.

“There is now less certainty as to the future direction of AGL,” said Jamie Hannah, deputy head of investments and capital markets at Van Eck Associates Corp., which owns the utility’s shares. “The risk of further downside has increased.”
Cannon-Brookes, who has used his wealth and social media following to lob lawmakers and Elon Musk on climate action, earlier this year joined a failed takeover approach for AGL led Brookfield Asset Management Inc. He resumed his campaign this month taking control of about 11% of the Sydney-based utility, plunging the company into new turmoil.
CEO Graeme Hunt and Chairman Peter Botten will leave their posts, along with two other board members, AGL said Monday. The company will also launch a strategic review, consult with investors including Cannon-Brookes’ Grok Ventures and len to “any new approaches from third parties regarding alternative transactions,” it said.
AGL, formed in 1837 as the Australian Gas Light company, also indicated it could accelerate an exit from coal.

Wow. A huge day for Australia 💚💛
Had to sit down & take it in. This live shot couldn’t be a better metaphor for a better, greener path ahead 🌱
We embrace the opportunities of decarbonisation with Aussie courage, tenacity & creativity.
Lots of work but we CAN do this 👊🏻 pic.twitter.com/mSCQl554C0
— Mike Cannon-Brookes 👨🏼‍💻🧢🇦🇺 (@mcannonbrookes) May 29, 2022
Grok will seek board seats and believes AGL’s decision shows investors agree with Cannon-Brookes that the utility “needs to be kept together to take advantage of the economic opportunity presented decarbonisation,” it said in a statement.
The AGL decision highlights renewed attention being given to the pace of climate action in Australia following the vote into power last week of a new government — and a slew of emissions-focused independent lawmakers — that has vowed to end decades of inaction one of the world’s highest per-capita emitters.
It also builds on activ fund Engine No. 1’s surprise success last year in having three climate-conscious directors voted onto the board of Exxon Mobil Corp., and Enkraft Capital’s move to force German energy giant RWE AG to hold a vote on a spinoff of its brown coal operations.
AGL had intended to ask holders to vote next month to approve the creation of AGL Australia, a retailer with more than 4 million energy customers, and Accel Energy, which would operate the ageing fleet of coal plants and develop capacity in renewables. The firm expected its final coal plant to close between 2040 and 2045.

Australia’s largest energy retailer is abandoning plans to split into separate entities.
It comes after billionaire climate activ, Mike Cannon-Brookes, challenged the deal. @MarkWBurrows #9News pic.twitter.com/LUW3KUi6DB
— 9News Australia (@9NewsAUS) May 30, 2022
“Shareholders are increasingly expecting companies to do more to drive a timely, equitable and orderly transition to a low-carbon future,” said Deb Blakey, CEO of Health Employees Superannuation Trust Australia, one of the country’s largest pension funds and an AGL investor that opposed the demerger.
Cannon-Brookes most famously demonstrated his interest in accelerating clean energy in 2017 when he challenged Tesla Inc.’s Musk to install 100 megawatts of battery power within 100 days to help solve an energy crisis in South Australia. Musk took up the offer, won the bet, and helped spark a rush of giant battery projects.
AGL aims to report to shareholders on its review in September and will provide an update on progress with its next earnings results, it said.