An investor rebellion has prompted a promise from Origin Energy to be more transparent about its relationships with lobby groups.
Almost half of Origin’s shareholders voted in favour of a motion at the company's annual general meeting on Wednesday asking it to to review its membership of major energy and resources industry groups and establish criteria for continuing their support.
The groups singled out were the Business Council of Australia to the Australian Industry Greenhouse Network and the Australian Petroleum Production and Exploration Association over their positions on climate change and greenhouse gas emissions. The backers of the motion, the Australian Centre for Corporate Responsibility, argued that the stated positions of those groups could be at odds with Origin's commitments on climate change and its long-term financial interests.
The resolution received the support of 46 per cent of voting shareholders. While an unusually high result the vote fell short of the mark required to force the company to abide by the motion.
Origin’s board recommended shareholders vote against the resolution but chairman Gordon Cairns added that its membership in lobbying organisations remained under review.
"We understand that clarifying our involvement with industry associations is of considerable interest to our shareholder base," he said, adding that the group would improve disclosure of its involvement and funding to peak bodies in future annual reports.
Origin chief executive Frank Calabria said the company had tried to be transparent on its interactions with lobby groups.
"I think we've disclosed fairly well over time but I think it was a strong message from shareholders that they'd like to see further disclosure," he said.
"We always review it time to time, but not because of this [resolution]. There's nothing out of today that would change any way we assess our involvement in those associations."
Mr Cairns said the best way to induce change is through industry leadership.
"We think advocacy works much better inside the tent than outside the tent, we think it's much more effective," Mr Cairns said.
I think we've disclosed fairly well over time but I think it was a strong message from shareholders that they'd like to see further disclosure.Gordon Cairns
“The directors are of the view that the resolution is not required, given Origin’s clear policy position.”
“The 46 per cent vote against the board is a record for a shareholder proposal on an environmental social governance issue in Australian corporate history,” ACCR director of climate and environment Dan Gocher said.
“It is a landmark shift from the investment community and signals that oppositional lobbying on climate and energy policy will no longer be tolerated.”
Mr Gocher said Origin’s financial support of the Business Council of Australia, APPEA and the Queensland Resources Council backs anti-climate agendas.
“Investors clearly understand that such advocacy puts their long-term portfolios at risk, and this vote is a message to all ASX-listed companies that the days of obstruction are over.”
Earlier this week Westpac agreed to review its membership of lobby groups after facing the prospect of a similar motion from the ACCR ahead of its AGM in December.
This resolution comes at the same time as the Business Council of Australia has begun internal discussions on setting its own emissions reduction policies and targets after the federal government’s planned National Energy Guarantee and associated emissions policy collapsed.
Mr Calabria said he had been part of these conversations. In the wake of these discussions, Federal Resources Minister Matt Canavan attacked the BCA and industry, telling them to leave the decision to government and have “humility”.
Covering energy and policy at Fairfax Media.