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HOW RESPONSIBLE SHAREHOLDERS CAN CHANGE THE WORLD, AND WHY THEY MUST BRYNN O’BRIEN Brynn O’Brien, Executive Director, Australasian Centre for Corporate Responsibility, has 15 years’ experience as a lawyer and strategist and is the Executive Director of the Australasian Centre for Corporate Responsibility (ACCR), which promotes better performance of Australian companies on climate, energy transition, human rights and corporate governance issues. As an ‘activist shareholder’ organisation, ACCR engages companies, including through filing shareholder resolutions. In the last 12 months, ACCR has filed resolutions to mining, oil and gas, and utilities giants.
Just a few short months ago, Australia endured the devastating ‘Black Summer’. More than 18 million hectares of land —particularly in New South Wales, Victoria and the ACT — burned across the country. Wildlife experts consider koalas to now be in severe risk of extinction; the Great Barrier Reef is very likely in a state of terminal decline. Scientific1 and expert2 reports have been warning for years of what is now immediately observable: we are losing the fight to limit global warming to safe or even manageable levels. Data published by the World Meteorological Organization confirms that in 2019 we arrived at 407.8 parts per million of carbon dioxide in the Earth’s atmosphere. The ‘safe’ limit is 350 ppm, a threshold we crossed in the late 1980s. The continued build-up of carbon dioxide due to human activity, primarily the extraction and burning of fossil fuels for energy, is driving global temperatures up, with harmful impacts worldwide. We are already over one degree of warming, and our current trajectory places us well above three degrees by the end of the century. The human consequences of unmitigated heating are visceral and they are here. There is no delicate way of saying this: climate change will render some places uninhabitable. When food cannot be grown because it is either much wetter or much drier than before; where human settlements are subject to increased flooding or fire activity; where water becomes less available: people will need to move. The movement of people due to climate change is predicted to be on a scale we have never seen
HUMAN RIGHTS DEFENDER | VOLUME 29: ISSUE 3 – OCTOBER 2020
before. Millions of people on the move at the same time is a recipe for human rights disaster. Research by the Carbon Disclosure Project has shown that roughly 70% of the world’s greenhouse gas emissions since 1988 can be linked to just 100 fossil fuels producers.3 Many of these companies are traded on global stock markets. Some of them, like BHP and Rio Tinto, are household names in Australia. Most are part-owned in some way by institutional investors that label themselves ‘responsible’ or ‘ethical,’ including the $3 trillion Australian superannuation sector. Superannuation capital is invested over the term of a working life, so it is not difficult to make the argument that addressing climate change is in the interests of members. Investors have a range of tools available to them, from informal, private measures like writing to companies and meeting with boards, through to filing shareholder resolutions, voting, nominating and removing directors, and using legal strategies. Used assertively, strategically and in combination, investors have some powerful levers at their disposal. But to date, engagement by Australian investment institutions with the companies in their portfolios has been sorely lacking in terms of achieving tangible emissions reductions. The Australian-listed oil and gas sector, for example, is still planning significant exploration and expansion despite project delays due to Covid-related demand shocks, and investors have not challenged these plans directly and in public. In September, upon releasing
