Just Share, a shareholder activism organisation, claimed coal mining groups Exxaro Resources and Thungela Resources have not provided sufficient reason to refuse to table shareholder resolutions on better disclosure of environmental lobbying.
Exxaro and Thungela have opted not to table non-binding, advisory shareholder resolutions – filed on April 19 by JustShare, Aeon Investment Management and Fossil Free South Africa – for Exxaro’s and Thungela’s AGM’s to be held on May 18 and May 31, respectively, a statement from Just Share said yesterday.
“Thungela stated in its response to the co-filers that its disclosure of industry association memberships in its Climate Change Report would satisfy the request of the resolution. This is disingenuous. The resolution makes clear the disclosure required is much more detailed than simply providing names of industry associations, which is all that Thungela’s report does,” Just Share said.
In response to a Business Report question, Thungela said it “welcomes the opportunity to engage with Just Share. Our board has invited Just Share to engage on the concerns they have raised. Given our willingness to disclose this information openly, we do not see a need for our shareholders to vote on the matter”.
Just Share said Thungela’s response did “not align with the Global Standard on Corporate Lobbying, nor does it comply with the JSE’s guidance on climate change and sustainability disclosure in relation to lobbying activities”.
The resolutions filed ask the companies to report to shareholders, in line with the Global Standard on Responsible Climate Investing, on the alignment of their lobbying and policy engagement activities, and those of the industry associations to which they belong, with the goals of the Paris Agreement.
Shareholders need be notified of a resolution at least 15 business days before the AGM.
Just Share said Exxaro had failed to respond to the co-filers until after this deadline had passed. Attempts by BR to obtain further clarity from Exxaro were fruitless yesterday.
The co-filers said company directors could not refuse to table the resolutions simply because they do not like the substance of the resolution.
“This is particularly the case in relation to advisory resolutions, which are not binding on the company even if shareholders vote in favour of them,” said Just Share, adding it had obtained legal opinion to support its view.
It said shareholder resolutions for disclosure on corporate climate lobbying was common in the US, Canada, Europe and Australia.
Climate lobbying disclosure is particularly important for coal mining companies with a vested interest in delaying government climate action.
“Thungela, for example, is a member of the World Coal Association, which “appears generally oppositional to ambitious global climate change policy,” Just Share said.
Exxaro had told Just Share after the 15-day deadline that “we firmly believe the proposed resolution is within the purview of the directors of the company and hence should be addressed accordingly”.
Just Share said a “firm belief” did not constitute a justifiable ground for refusing to table the resolution.
Fossil fuel companies have significant influence over government climate policy – directly and through industry associations such as Business Unity South Africa, the Minerals Council of South Africa, and the Energy Council of South Africa.
There is no legal requirement in South Africa to disclose lobbying activities. Exxaro discloses some of its industry association memberships in its 2022 ESG report.
BUSINESS REPORT