The AGM as a site of contestation: evaluating the tactics of environmental shareholder activists

Abstract

ABSTRACTThe politics of climate change in Australia remains highly fraught, this is despite the country experiencing acute impacts of a changing climate including mega-fires, floods, and severe and prolonged drought. Government inaction has led to limited market signals encouraging producers or consumers to move away from carbon intensive energy production to clean energy. In the absence of regulation, Australian shareholder activists are engaging directly with company boards and executives to reform corporate behaviour. This engagement, environmental, social, and governance (ESG) shareholder activism, has proliferated since 2017, much later than in comparable jurisdictions. Activists have targeted the mining, oil and gas, and finance sectors, due to their contribution to the Australian economy and their direct impact on global emissions. This paper explores the reasons for, and the implications of, the growth in ESG shareholder activism in Australia. It argues that the emergence of this activism in Australia was delayed due to complexities in the country's corporations' law. Regulatory attempts at stymying ESG shareholder activism resulted in the emergence of a duopoly of actors, at the cost of broader investor and civil society engagement. It is concluded that the rise of ESG shareholder activism in Australia is linked to growing tension between societal expectations, regulation, and the behaviour of firms. And, that ESG activists have been successful in leveraging this tension. There is evidence that large corporates have responded to activist claims, rendering this form of activism a potentially effective method for addressing some of the most pressing issues facing society.KEYWORDS: ESG shareholder activismanti-corporate politicssocial movementsclimate changeenvironmental politics AcknowledgementsThe author wishes to thank the two anonymous reviewers and the ECPR General Conference 2023 Energy Politics, Policy and Governance Standing Group panels for their generous engagement with the paper.Disclosure statementNo potential conflict of interest was reported by the author(s).Notes1 This was followed by an attempted hostile takeover of the firm by entrepreneur and philanthropist, Mike Cannon-Brooks. This bid ultimately failed but did lead to the appointment of four new Cannon-Brooks-backed independent board members and put an end to the proposed demerger that would have carved out the emissions intensive business.2 This figure is of course much higher for Australia’s neighbouring Pasifika communities, who are 100 times more likely to be displaced by climate induced crises than those living in Europe. It must be noted that states in the global north (including Australia) have contributed the majority of the emissions that are likely to displace those whose contributions have been minimal.3 While there are some similar actors in other jurisdictions (i.e. People for the Ethical Treatment of Animals), the majority of filers in the UK and US partner with institutional investors in order to gain access to shareholders’ rights. For example, ICCR’s board includes representatives of fund managers and US group As You Sow co-files with institutional investors who hold the requisite number of shares.Additional informationFundingThis work was supported by University of Sydney.Notes on contributorsAinsley ElbraAinsley Elbra is a researcher in the field of international political economy. Her work focuses on business-state relations, private governance, and anti-corporate activism. She has published on the power of multinational corporations including efforts at combating multinational tax avoidance, the political power of professional services firms and the role of mining companies in the Global South. Her research has been recognised by the Australian International Political Economy Network, which awarded her the inaugural Richard Higgott Journal Article Prize in 2015.