22 October 2020 – For immediate release
Institutional investors will today vote on a world first shareholder resolution, calling on Whitehaven Coal to demonstrate how it will wind down coal operations in line with global climate change targets.
The resolution, which will be put to Whitehaven Coal’s AGM today, challenges investors to fulfil their promises to drive climate action through corporate engagement. Many large investors, including Blackrock, have reduced investments in coal companies like Whitehaven due to the poor outlook for the sector, but retain some exposure and therefore voting power.
“Without wholesale changes to Whitehaven Coal’s plans, shareholders risk seeing billions of dollars of their capital wasted on new coal mining projects that have no market in a decarbonised economy”, said Market Forces Executive Director Julien Vincent
“There is no place for a pure play coal company like Whitehaven in a Paris-aligned energy transition. By failing to plan for its own decline, Whitehaven Coal is risking massive wealth destruction for its investors and social instability for its workforce.”
“Votes in favour of this resolution support the goals of protecting the climate, preserving capital and supporting workers of companies that have chosen to not particulate in the decarbonised economy. It’s the most sensible demand investors can make of Whitehaven Coal.”
Institutional investors increasingly understand the financial imperative to manage their investments in a way that supports the transition to a low-carbon economy required to meet the climate goals of the Paris Agreement.
However, Whitehaven plans to almost double production between now and 2030, at a cost of around $2 billion, with some projects projected to run into the 2050s. These plans mean Whitehaven intends to produce around 500 million tons of coal that could not be sold into its current markets, based on Paris-aligned coal power phase out dates for those markets.
Whitehaven Coal’s hopes for sustaining and expanding their operations rely on Asian coal power demand dramatically increasing. However, the pipeline of proposed new coal power stations in Southeast Asia has halved from 2015 to 2019, while construction starts fell 85% from 2016 to 2019. Japan plans to close around 100 of its 140 coal-fired power plants by 2030. Korea is phasing out domestic and overseas coal financing. Vietnam’s latest Power Development Plan will see half of the country’s planned coal power plant capacity cancelled or shelved. Bangladesh is reviewing 26 of its 29 planned coal plants, stating the country’s intention to “move from coal-based power.”
Whitehaven’s share price has fallen by over 80% below its July 2018 peak, and almost 60% throughout 2020.
“Investors must take this opportunity to manage the necessary decline of the coal sector,” said Vincent.
“Enough is enough. It’s time to genuinely plan for an orderly transition rather than compounding the climate crisis and continuing to throw good money after bad.”
Market Forces has supported shareholders to lodge similar resolutions at New Hope Group, Beach Energy and Cooper Energy during this AGM season.
Whitehaven Coal shareholder resolution
Investor briefing (Whitehaven, New Hope, Beach, Cooper resolutions)