Matt Canavan takes a shot at ‘green’ AMP

Resources Minister Matt Canavan has launched an attack on AMP for its pursuit of Australian corporates on climate change.

Resources Minister Matt Canavan has launched an extraordinary attack on AMP for its role in pursuing Australian corporates on climate change and called for the company to be expelled from a global activist fund because of its financial planning scandal.

The Climate Action 100+ initiative, which controls $US32 trillion ($45 trillion) globally and is backed by major Australian investors and superannuation funds ­including AMP Capital, is targeting some of Australia’s largest polluters including energy producers Woodside Petroleum and Santos to cut their emissions.

While the green pressure group is not calling for the companies to ditch fossil fuels, it wants the biggest emitters to take action to cut greenhouse gas emissions in line with the Paris Agreement on limiting temperatures to well below 2C above pre-industrial levels. The Climate ­Action members in Australia include Australian­Super, AMP Capital, Cbus, IFM Investors, QSuper and BT Financial Group.

The presence of AMP Capital, a subsidiary of financial services giant AMP, in a global activist group was inappropriate, given its ethical issues highlighted in the banking royal commission, including fees for no service, Senator Canavan said.

“The fact Climate Action 100 have members like AMP, who have a disgraceful ­record of conduct in the financial services industry, shows their moral hypocrisy,” he said.

“If they had any ethical standards, they would kick AMP out of their group because AMP have been found to have misled the corporate regulator and been charging customers for no service.”

AMP rejected the accusation and noted the importance of ­engaging with investors on climate risk through its $187 billion AMP Capital arm.

“Climate Action 100+ is a five-year initiative that’s supported by about 300 of the world’s largest ­investors including AMP Capital,” AMP said. “AMP Capital continues to believe it is important for all companies to appropriately manage climate risk for the benefit of investors, and proactively engages companies on climate-­related investment risks and ­opportunities.”

The attack by a senior government minister will probably re­ignite tensions between big business and Canberra, following a plea by the Business Council of Australia last week for politicians to stop bashing its corporate members as it risked weakening the economy.

The issue also underlines the growing pressure on big polluters to rethink a “business as usual” ­approach to climate change concerns as institutional investors flex their muscle to hold companies to account and improve their environmental performance.

Australia’s largest coal producer, Glencore, shocked markets last month by deciding to abandon the pursuit of large coal acquisitions and freeze production at current levels to help address climate change concerns following pressure from Climate Action 100+.

Senator Canavan maintains that Australia is hitting its Paris targets and says AMP and other major ­investors should not engage in “corporate civil war” as part of their Climate Action membership.

“It is just so disappointing to see Australian companies attack each other in this way. It is tough enough for our companies to compete on the world stage. We should support each other, not ­engage in corporate civil war.”

Climate Action 100+ said it was undeterred in its mission for companies to better manage climate risk. “As has been recently noted by both APRA and ASIC, climate change is a financial risk which needs to be managed responsibly by investors,” Emma Herd, a member of the Climate Action 100+ steering committee told The Australian.

“Climate Action 100+ is about constructive and productive ­engagement aimed at getting good outcomes for the company and for shareholders from effectively managing climate risk.”

Woodside and Santos are also under pressure from a linked group to disclose their strategies to cut emissions and review their membership of industry associations that obstruct climate policy in Australia.

Shareholder resolutions were filed yesterday with the two ­energy producers by the Australasian Centre for Corporate Respon­sibility and super fund Australian Ethical following talks where it was concluded the companies had failed to commit to credible decarbonisation plans.

Woodside said it was considering the resolutions while Santos noted its gas portfolio was “economically resilient” under Paris ­climate targets.