Investment giants throw weight behind climate resolution filed with J-Power

An investor group representing $3 trillion of AUM have joined forces to engage and co-file a set of climate shareholder resolutions at J-Power, Japan's largest coal-fired utility. 

Among the participants are Amundi, HSBC Asset Management, Man Group and the Australasian Centre for Corporate Responsibility (ACCR). The initiative extends last year's engagement between the investor group and the company.

The resolutions call on J-Power to set and disclose credible short and medium-term emission reduction targets, align with the goals of the Paris Agreement, as well as to disclose how remuneration policies incentivise progress against emission reduction targets.

While shareholder resolutions, especially in Japan, often generate considerable news headlines, they usually fail.

Credible strategy

The filing states that long term institutional investors in J-Power see its corporate value depending upon a credible decarbonisation strategy. 

"J-Power’s targets are still not Paris-aligned or science-based, and the company has presented no indicative schedule for retirement of its coal-fired power assets, instead presenting a plan that involves capital expenditure into speculative technology such as ammonia co-firing prolonging the life of these assets," the group said in a statement.

The investors warn this presents a range of material financial risks to shareholders, and setting science-based targets and disclosing a business plan to achieve them would best manage these risks.

In 2022, Man, Amundi and HSBC were part of the first investor group-led climate shareholder resolution filed in Japan, with a proposal to J-Power on emissions targets receiving support from more than one-quarter (26%) of shareholders.

"The failure of J-Power to meaningfully respond to a material shareholder vote, and the escalating risks to long-term value of the current climate plan, have prompted each in the co-engagement group to signal their intention to vote against the company director principally responsible for overseeing J-Power's decarbonisation strategy," the group said in its statement.