20 November 2018
The a2 Milk Company held its annual general meeting today in Melbourne. The board of the ASX100 listed milk products company admitted to shareholders they had not formally undertaken to educate themselves on climate change and climate-related risk.
“I think it’s fair to say in the last year we haven’t done anything on a training basis for the board, so I wouldn’t want to pretend that,” chairman David Hearn conceded. Watch below:
Hearn reflected that, as a consequence of the shareholder’s question, it might be something that “we perhaps as board should consider whether we should take some sort of formal improvement in our understanding of some of the implications.”
Let’s hope they do, given legal opinion indicates that Australian company directors may be legally obliged to do so. Senior barristers and solicitors assert directors may be liable for breaching their duty of due care and diligence under section 180 of the Corporations Act if they fail to educate themselves on climate change risk.
Questioned on whether the company supports the Paris climate accord goals, the answer was a definitive “yes, certainly.” Hearn told shareholders that a2 takes seriously its obligations as a global citizen, which includes considering climate change.
All froth, no action
Being agreeable is all well and good but we’re yet to see any strong climate action from a2, which operates in the agricultural and food sectors. Both are deemed high risk when it comes to the financial impacts posed by climate change.
So far the company hasn’t released any analysis to shareholders that stress tests its assets and capital expenditure against different climate change scenarios. Such analysis, even if only partial, is valuable to shareholders who are increasingly considering the impacts climate could have on businesses.
When asked if a2 had done any such analysis Hearn did not directly answer the question. Instead he told shareholders that a2 evaluates its partners on a whole range of issues, withholding a timeline on when, if at all, the company would undertake such analysis.
A concerned shareholder asked if the board was satisfied that all potential material climate-related financial risks to the company’s performance and prospects had been disclosed.
“It’s a dangerous thing to say the board is entirely satisfied… have we got it perfectly right? I’d be foolish to say that but it is our intention to try and do so.”
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