Speaking at the Stockbrokers and Investment Advisers recent conference, Tim Buckley explained that the transition towards electrification requires leadership and a policy roadmap.
And according to him, it’s that key concept of leadership that AGL - Australia's biggest domestic contributor to climate change - lacks.
“AGL needs to move, in my view, from being absolute laggard to a leader,” Mr Buckley said.
“It is a failure of stewardship.
“The shares are down two-thirds in just five years, that’s an enormous amount of wealth destruction,” Mr Buckley continued.
He labelled the demerger “a costly mistake”.
“It’s a costly distraction," Mr Buckley said.
“Rather than leading, rather than embracing, rather than funding the solutions, AGL is busy cutting the company in half,” the CEO noted.
And despite the company's claims to the contrary, he firmly believes that AGL’s split will not drive decarbonisation.
“I would be saying vote no, let’s keep the company together. Keep it vertically integrated and allow the financial strength of AGL, and the firepower of the company to provide the solutions,” Mr Buckely said.
He explained that accelerating the closure of coal-fired power plants “inevitably has to happen” and while the costs are great, they're unavoidable.
“Talking about the magnitude of finance, AGL would probably have to spend $25 billion in the next decade to actually build 0 emissions, renewables to actually replace their capacity,” Mr Buckley said.
Earlier this week, battle lines were drawn ahead of AGL Energy’s scheme meeting on 15 June, where the company’s planned demerger will finally be put to a vote, with HESTA declaring it will vote ‘no’.
In a statement issued on Wednesday, HESTA said that, having reviewed AGL’s plan, it remained unconvinced that the overall demerger would sufficiently accelerate decarbonisation to meet Paris-aligned targets.
“A standalone company owning AGL’s coal-fired power plants risks making it more difficult for Australia to transition to a low-carbon future. We believe this company would struggle to make the transition out of coal successfully were power prices to fall or the transition further accelerated to limit the worst impacts of climate change,” HESTA said.
But despite heavy opposition, AGL is pushing ahead.
In fact, the company issued a statement hours after HESTA’s public show of opposition, reaffirming its "strong commitment" to investment in renewables and decarbonisation, and reiterated the "financial strength", including anticipated investment credit grade ratings of both AGL Australia and Accel Energy.
“AGL Energy has outlined a clear and detailed demerger plan that is the best path forward for the company, for shareholders, and for Australia’s responsible energy transition. It has been unanimously recommended by the AGL Energy Board and it is supported by the Grant Samuel Independent Expert report,” AGL managing director and CEO Graeme Hunt said.
“It is critical that AGL shareholders make this important decision based on information that is factual and consistent.”
Maja Garaca Djurdjevic
Maja's career in journalism spans well over a decade across finance, business and politics. Now an experienced editor and reporter across all elements of the financial services sector, prior to joining Momentum Media, Maja reported for several established news outlets in Southeast Europe, scrutinising key processes in post-conflict societies.
