21 November 2018
With a slew of climate-related questions and a grilling over labour exploitation practices as well as its gambling operations, the board of retail and consumer staples giant Woolworths clearly felt the pressure at its annual general meeting in Sydney today.
Prior to the meeting the Australasian Center for Corporate Responsibility (ACCR), in collaboration with LUCRF super, lodged a shareholder resolution calling on Woolworths to improve its labour hire practices. After severe labour rights violations were documented at supplier farms across Australia the company committed to addressing them with the National Union of Workers in 2017.
ACCR filed the resolution because Woolworths has failed to deliver on those commitments. Responding to the resolution, chairman Gordon Cairns said: “We absolutely welcome your involvement… however, I would say that we are not perfect and we’re going to make mistakes, and I’m sure you’re about to show us one mistake that we’ve made and I can only apologise. But we will not be perfect.” Watch below:
Pulling the wool over investors’ eyes on climate risk management
Woolworths is part of the Climate Action 100+, a list of companies that are the highest emitters of greenhouse gas globally and are likely to be exposed to the transitional and physical risks of climate change. It’s critical that these companies have plans and strategies for mitigating such risk. One strategy is to incentivize executives in order to achieve a low carbon transition, and there’s strong evidence it works.
Woolworths recognises these risks and has committed to addressing them but when questioned on whether the company had adopted such a remuneration scheme, chairman Gordon Cairns said: “I don’t think you need to incentivize people to do the right thing… if we’re not reducing emissions then we should be castigated publicly.” Watch below:
With such strong words, Woolworths obviously wants the public to know it takes climate change seriously. Cairns also made clear that it was the 1.5-2 degree goal of the Paris Agreement that the company adhered to when developing climate policies, as opposed to Australia’s nationally determined commitment which could lead to a 3 degree warming scenario.
Yet no analysis has been released to shareholders that stress tests Woolworths’ capital expenditure and assets against different climate change scenarios. Such disclosure is a key element to the recommendations made by the Task Force on Climate-Related Financial Disclosures (TCFD), which is charged with ensuring financial stability in a climate affected world.
Though Woolworths has committed to releasing this analysis, when asked by a shareholder if the company could disclose a timeline to shareholders, Cairns answered bluntly “yes, definitely” but did not give a date. Watch below:
All companies should be disclosing how climate change impacts their business. Call on your superfund and ask them to enforce climate risk management.