Just Share says Thungela, Exxaro refuse to table shareholder-proposed climate lobbying resolutions

A South African coal mining operation

Photo by Creamer Media

8th May 2023

By: Darren Parker

Creamer Media Contributing Editor Online


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Activist organisations Just Share and Fossil Free South Africa, along with investment management company Aeon Investment Management, say coal mining companies Exxaro Resources and Thungela Resources are refusing to table nonbinding advisory shareholder resolutions filed on April 19.

This is ahead of Exxaro's and Thungela’s annual general meetings (AGMs) that are scheduled to be held on May 18 and 31, respectively.

The resolutions filed ask the companies to report to shareholders on the alignment of their own lobbying and policy engagement activities, and those of the industry associations to which they belong, with the goals of the Paris Agreement.

Just Share said in a May 8 statement that this would be in keeping with the Global Standard on Responsible Climate Lobbying, which was launched in March last year.

The standard was developed by Swedish pension scheme AP7, BNP Paribas Asset Management and the Church of England Pensions Board, and is backed by investor groups pushing the climate change agenda with companies whose members manage a collective $130-trillion.

The co-filers of the resolutions have argued that directors of JSE-listed companies do not have the discretion to refuse to table shareholder-proposed resolutions that comply with the procedural requirements of the Companies Act.

“They cannot refuse to table them simply because they do not like the substance of the resolution. This is particularly the case in relation to advisory resolutions which are not binding on the company even if shareholders vote in favour of them. Neither company has provided a justifiable reason for refusing to table the resolutions,” Just Share climate risk analyst Emma Schuster said.

She noted that the filing and tabling of shareholder resolutions requesting disclosure on corporate climate lobbying is common practice in the US, Canada, Europe and Australia.

Schuster said climate lobbying disclosure was particularly important for coal mining companies, which she said had a “clear vested interest in delaying government climate action”.

Thungela is a member of the World Coal Association (WCA), which, according to independent think tank InfluenceMap, engages negatively on climate policies and “appears generally oppositional to ambitious global climate change policy”.

Thungela stated in its response to the co-filers that its disclosure of industry association memberships in its Climate Change Report would satisfy the request of the resolution. Just Share dismissed this as “disingenuous”.

“The resolution makes clear that the disclosure required is much more detailed than simply providing names of industry associations, which is all that Thungela’s report does,” Schuster said, claiming that this would fall short of the JSE’s guidance on climate change and sustainability disclosure in relation to lobbying activities.

In response to Just Share’s media statement, Thungela said it “welcomes the opportunity to engage with Just Share”.

“Our board has invited Just Share to engage on the concerns they have raised. Given our willingness to disclose this information openly, we do not see a need for our shareholders to vote on the matter,” Thungela told Mining Weekly.

Meanwhile, Exxaro told Just Share that its board firmly believed that the proposed resolution was within the purview of the directors of the company and should therefore be addressed accordingly.

“A ‘firm belief’ does not constitute a justifiable ground for refusing to table a non-binding advisory resolution,” Schuster retorted.

Just Share alleged that fossil fuel companies have significant influence over government climate policy, both directly and through industry associations such as Business Unity South Africa, Minerals Council South Africa, and the Energy Council of South Africa.

“Since there is no legal requirement in South Africa to disclose lobbying activities, disclosure of the kind the co-filers request is the only way for investors to ascertain whether investee companies are using their influence to align the country’s climate policy with the Paris goals,” Schuster explained.

Major investors in both companies include Old Mutual Investment Group, Sanlam Investment Management, Ninety One, M&G Investments, and Coronation Fund Managers, all of which have stated that they engage with investee companies in relation to climate risk. Schuster believed that understanding the impact of corporate lobbying on national climate commitments and just transition investment plans should be high on these investors’ list of priorities.

“Organised business has successfully lobbied to weaken and delay the implementation of key climate-related regulation and policies, including against the introduction of an effective carbon tax in South Africa,” Schuster alleged.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online



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