Origin Energy’s commitment to climate reporting placates activist agitator

A resolution designed to force Origin Energy to bolster its climate change reporting has been withdrawn after the company committed to doing just that.

Origin Energy is committed to bolstering its green credentials with more detailed reporting on climate change matters. Picture: Jason Edwards

An activist investor group is claiming a win over Origin Energy, after the ​company acceded to requests to include climate change sensitivity analysis in its 2023 reporting suite.

The Australasian Centre for Corporate Responsibility​ has withdrawn a resolution it had managed to get on the agenda for Origin’s annual meeting, to be held on October 19, saying it was satisfied with the outcome.

The ACCR’s statement in the notice of meeting says that while Origin said it supports the Paris Agreement on climate change “our company does not adequately consider climate change in its financial statements’’.

“This exclusion of climate risks from our company’s financial reporting and audit ‘reduces an investor’s ability to make investment, engagement and voting decisions’,’’ ACCR said.

The now-withdrawn resolution called for Origin to include a climate sensitivity analysis in its audited financial statements which “includes a scenario aligned with limiting warming to 1.5°C.’’

In the notice of meeting released two weeks ago Origin said it recognised the importance of the disclosure of climate-related risks and had demonstrated a commitment to improving is climate disclosures.

“We support including a climate sensitivity analysis using a 1.5°C scenario in our financial statements and commit to doing so from FY2023,’’ the company said.

“However, Origin does not support the inclusion of its exploration activities in such climate sensitivity analysis where Origin has not made a decision whether it will develop or produce from these assets.’’

ACCR lead carbon analyst Alex Hillman said Origin’s commitment was a win for shareholders.

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“Origin’s commitment to include a climate sensitivity analysis using a 1.5°C scenario in its financial statements is welcome and represents a significant step towards this commitment being normalised across the ASX.

“Climate risk is financial risk, it belongs in financial statements. Regulators and investors expect this. Origin’s plans to disclose a sensitivity to 1.5°C reflects growing global momentum to embed climate change in financial statements.

“Although Origin did not commit to disclosing the climate risk associated with its exploration assets, it subsequently announced that it is exiting its exploration activities, meaning that this part of ACCR’s resolution became less relevant.’’

Origin earlier this month sold out of its controversial Beetaloo Basin project in the Northern Territory, offloading its 77.5 per cent stake to Tamboran Resources for $60m plus a royalty.

The decision followed its move to bring forward the closure of Australia’s largest coal plant, NSW’s Eraring, by up to seven years as it ploughs more money into renewables, batteries and green hydrogen through the course of this decade.

The electricity and gas operator has plans to develop “multi” gigawatts of renewable energy this decade and a 2GW virtual power plant as part of a bid to bring on new green supplies once its Eraring power station closes as early as mid-2025.

Origin copped several large votes at last year’s AGM from shareholders supporting resolutions on climate change and has responded to shareholder concerns, in August laying out a string of new climate goals including a long-term ambition to be net zero in Scope 1, 2 and 3 emissions by 2050.

Origin set a medium-term target to reduce Scope 1, 2 and 3 equity emissions intensity by 40 per cent by 2030, from a FY2019 baseline and said the two goals were in line with the Paris agreement.

Four shareholder resolutions, including a bid to amend the company’s constitution to give shareholders more power to direct the board, and around water monitoring, cultural heritage and native title remain on the agenda for the annual meeting.

BHP is also facing a shareholder vote at its November annual meeting on reporting on its alignment to the Paris Agreement goals, as well as a resolution asking it to “proactively advocate’’ for Australian policy settings which are consistent with the 1.5°C goal.

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