Metrics to be included in AGL’s remuneration structure would include the emissions intensity of its energy generation fleet, the proportion of output from renewable sources, and the share of customer sales coming from green energy and other lower-carbon products and services, he said.
AGL runs a fleet of coal- and gas-fired power plants and renewable energy generators around the nation, supplying 3.7 million customer accounts. The ASX-listed utility was responsible for 42.7 million tonnes of carbon dioxide emissions in the 2019 financial year, the most of any Australian business.
Fossil fuel-exposed companies in Australia and around the world have come under growing pressure from activists and large institutional shareholders alike to bolster their carbon credentials and commit to targets to combat global warming. The world’s biggest sovereign wealth fund, the Norwegian Government Pension Fund Global, earlier this year dumped its 0.46 per cent holding in AGL due to its use of thermal coal.
AGL, which plans to close down its Liddell coal power generator in New South Wales in 2023, also operates NSW’s Bayswater plant which is scheduled to run to 2035 and Victoria’s Loy Yang A coal-fired plant, expected to be operational until 2048. AGL’s climate goals released on Tuesday did not commit to bringing forward those closure dates.
Mr Redman said AGL’s toughening climate focus was shaped largely by the growing climate demands of its customers.
“Many of our customers share our interest in shaping a more sustainable future, so it’s important to provide them with options,” he said.
“We accept the science of climate change,” he said. “The more difficult aspect that needs to be addressed is how we manage the transition in a way that reduces emissions and supports our customers and the community.”