Is AGL Energy (ASX:AGL) share price tumbling on climate risks?

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Is AGL Energy (ASX:AGL) share price tumbling on climate risks?

AGL energy banner with climate sustainability, ASX:AGL, AGL share price
Image source: © Timonschneider | Megapixl.com

Highlights

  • ASX:AGL share price is facing the climate heat.
  • AGL Energy shareholders want Company to curb climate risks.
  • AGL claims to be aligned to COP-26, ‘phase-out’ goal by 2050.

Australian energy retailer AGL Energy Limited (ASX:AGL) share price has been facing the brunt of climate change since beginning of November. AGL share price has fallen by 83 cents in last one month on ASX.

AGL shares also tumbled when a recent report by Investor Group on Climate Change (IGCC) included AGL’s name in ASX companies facing risks of climate change. According to the IGCC report, AGL board seems to have failed to curb the risk.

AGL investors want climate alignment-

At its AGM held in September, AGL even witnessed an unforeseen investor revolt, when 50% of shareholders including big investors BlackRock and Vanguard asked AGL board for support on a climate resolution. Investors were requesting AGL to set, short, medium, and long-term targets for emissions reduction in line with the Paris Agreement.

AGL energy’s emissions reduction targets-

However, AGL claims itself to be fully committed towards the globe’s pledge of ‘phasing out’ fossil fuels, as agreed at COP26 summit, Glasgow.  AGL is all set to shut down its Liddell coal plant in NSW in 2023, which AGL believes would cut down AGL’s current emissions by 23 per cent. There is no news on its other coal plants getting closed, until 2040.

Furthermore, AGL has also proposed a demerger, where it plans separate out its fleet of huge coal- and gas-fired generators by the name of Accel Energy. The other demerged entity shall be called AGL Australia, continuing its retailing business in electricity, gas and telecommunications, along with other leaner energy initiatives. It is aiming to make AGL Australia with a net-zero carbon footprint.

However, AGL remains committed towards a net-zero operational emissions goal, by year 2050.

Bottom line-

AGL demerger scenes and mounting pressures from shareholders on ESG resolutions is making AGL share price fall. How much AGL Energy can convince shareholders and investors on climate risks will only be known with time. 

Meanwhile, on ASX, AGL shares have slightly risen over previous close and are trading at AU$5.180 per share as of 11:54 AM AEST. 

Read more from ASX - Plenti Group (ASX:PLT) revenue up 43% in H1-22

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