Home > New Hope investment raises shareholder concerns at Washington H Soul Pattinson AGM

New Hope investment raises shareholder concerns at Washington H Soul Pattinson AGM

10 December 2021

Washington H Soul Pattinson (WHSP) owns 40% of Australian thermal coal miner New Hope, and the two companies share a number of directors, including Chair Rob Millner.

New Hope is pursuing the highly controversial New Acland Stage 3 coal mine in Queensland, and confirmed at its AGM last month that it intends to continue deriving around 95% of its revenue from coal throughout this decade.

WHSP’s investment in New Hope has caused hostility at recent AGMs, with the company going to extraordinary lengths to avoid questions on coal and climate change in 2019, and telling shareholders to “sell their shares” if they’re not happy with its coal exposure in 2018.

In response to shareholder questioning at last year’s AGM, WHSP Managing Director Todd Barlow (who also sits on the New Hope board) suggested the company does not need to consider the implications of policy shifts to achieve net zero emissions globally by 2050, because New Hope’s Bengalla coal mine and New Acland Stage 3 projects would only produce until the late 2030s.

This year, the International Energy Agency found that in a net zero by 2050 scenario, no new or expanded coal mines are required, and unabated coal power generation would be phased out in advanced economies by 2030 and globally by 2040, severely reducing thermal coal demand within the lifetime of New Hope’s mines.

The WHSP board was asked if it had assessed the risks facing its investment in New Hope against the IEA’s net zero scenario.

Despite claiming to have done detailed analysis of all IEA scenarios, Barlow then refers to New Hope’s 2021 Sustainability Report, which fails to address the IEA’s net zero scenario at all.

Given this omission, and the fact that New Hope is pursuing its New Acland expansion project in contradiction to the IEA’s net zero scenario findings, it’s hard to trust Barlow’s claims about WHSP’s investment in New Hope.

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Tell New Hope’s financial backers to stop funding companies expanding the climate-wrecking coal industry!

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I am very concerned that your bank has been a major lender to New Hope, whose plans to expand climate-wrecking coal mines are consistent with the failure of the Paris Agreement. I want you to confirm that your bank will not provide further financial support to New Hope, or other companies pursuing business plans consistent with the failure of the Paris Agreement. Any expansion of the coal industry is incompatible with the goal of the Paris Agreement to limit global warming to 1.5˚C above pre-industrial levels [1]. Yet New Hope is pursuing new coal expansions–like New Acland Stage 3–when the world desperately needs to transition to clean, renewable energy sources. Expansion of the New Acland thermal coal mine is also incompatible with achieving net zero emissions by 2050, according to the International Energy Agency’s (IEA) ‘Net Zero by 2050’ scenario that states “No new coal mines or extensions of existing ones are needed … as coal demand declines precipitously” [2]. New Hope has repeatedly justified its expansion plans with reference to coal demand projections that are consistent with more than 2°C of global warming [3]. Even 2ºC of warming would expose 37% of the world’s population to extreme heat, destroy 99% of the world’s coral reefs (including the Great Barrier Reef) and result in massive biodiversity loss [4]. At 3ºC of warming, ecosystems would become virtually unrecognisable, major cities would be inundated and global GDP losses could total more than 25% by 2100 [5]. Put simply, New Hope references demand scenarios consistent with catastrophic ecological, social and economic collapse. New Hope’s reliance on these coal demand scenarios is now the subject of a complaint to the Australian Securities and Investments Commission (ASIC) [6]. The complaint alleges that New Hope may have engaged in misleading or deceptive conduct by selectively omitting coal demand scenarios that are far less optimistic about the future of the coal industry. I also draw your attention to recent (June 2021) comments by New Hope’s CEO in evidence to parliament, who, when asked whether there was a reason New Hope referred to outdated IEA scenarios, replied – “Not really, no. I just haven’t got to it” [7]. New Hope’s reliance on selective and favourable coal demand scenarios to justify coal expansion exposes it to climate risks and the rest of us to climate disaster. I want you to confirm to me personally, and announce publicly, that you will not provide any further financial support to New Hope, or other companies pursuing expansion of the climate-wrecking coal industry. [1] SEI, IISD, ODI, E3G and UNEP, Production Gap Report (2020) https://productiongap.org/wp-content/uploads/2020/12/PGR2020_FullRprt_web.pdf. [2] IEA, Net Zero by 2050, A Roadmap for the Global Energy Sector (2021) https://iea.blob.core.windows.net/assets/405543d2-054d-4cbd-9b89-d174831643a4/NetZeroby2050-ARoadmapfortheGlobalEnergySector_CORR.pdf. [3] New Hope, Sustainability Report (2020) https://dq4q35go95sg8.cloudfront.net/wp-content/uploads/NHG-Sustainability-Report_2020.pdf p 23. [4] IPCC, Special Report: Global Warming of 1.5ºC – Summary for Policymakers (2018) https://www.ipcc.ch/sr15/chapter/spm/. [5] Adam Morton (The Guardian), Reserve Bank warns of 25% GDP loss by 2100 unless action taken on climate change (26 June 2020) https://www.theguardian.com/australia-news/2020/jun/26/reserve-bank-warns-of-25-gdp-loss-by-2100-unless-action-taken-on-climate-change. [6] Ben Smee (The Guardian), New Hope mining company referred to Asic, accused of misleading investors over future of coal (21 July 2021) https://www.theguardian.com/australia-news/2021/jul/21/new-hope-mining-company-referred-to-asic-accused-of-misleading-investors-over-future-of-coal. [7] Reinhold Schmidt, Evidence to the Inquiry into the Prudential Regulation of Investment in Australia’s Export Industries (2021) https://parlinfo.aph.gov.au/parlInfo/download/committees/commjnt/6c415677-0375-40f6-b04b-75346670a4f6/toc_pdf/Joint%20Standing%20Committee%20on%20Trade%20and%20Investment%20Growth_2021_06_25_8907.pdf;fileType=application%2Fpdf#search=%22committees/commjnt/6c415677-0375-40f6-b04b-75346670a4f6/0000%22 p 38. Sincerely,
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