Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Fires and climate fears rattle Australia's giant coal lobby

Stock Markets Feb 20, 2020 12:30AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

By Joe Brock and Melanie Burton

SYDNEY (Reuters) - As bushfires and floods fuel public concerns in Australia about global warming, the country's powerful mining lobby is facing increasing pressure from investors to drop support for new coal mines, according to a dozen interviews with shareholders in global mining companies.

Nearly a third of shareholders in BHP Group Ltd, the world's biggest miner, last year voted for resolutions to axe its membership in industry groups advocating policies counter to the Paris climate accord, which aims to limit global warming to "well below" 2 degrees Celsius.

Although the resolutions failed, pressure from shareholders and the public has since increased on companies to ensure lobby groups support the Paris goals, according to interviews with officials at investors in major mining companies like BHP, Rio Tinto (LON:RIO) Plc, Glencore (LON:GLEN) Plc and Anglo American (LON:AAL) Plc. That support includes backing energy policies that favor the rapid phase out of coal, they said.

Australia's devastating bushfire season has fueled public anger toward powerful lobby groups that support new coal mines, such as the Minerals Council of Australia (MCA) and New South Wales (NSW) Minerals Council, and their close association with Prime Minister Scott Morrison's government.

This makes companies with coal exposure, like mining companies or banks, vulnerable if governments switch to greener policies, the investors said.

"Emissions-exposed companies face a growing risk not only of Australian policy change, but also of international action," said Stuart Palmer, Head of Ethics Research at Australian Ethical, a wealth manager invested in BHP. He cited the risk of Australia being hit with carbon-import duties, which the European Union is planning to impose on goods from countries with less strict climate policies.

The NSW Minerals Council and the MCA have campaigned against the blocking of new coal mines, previously argued against mining taxes and say more ambitious emissions targets could hit jobs, investment and the economy. Climate scientists say that opening new coal mines in Australia would prevent the country from meeting its emissions targets agreed under the Paris accord.

Aberdeen Standard Investments Ltd, a top ten investor in BHP and a top 20 investor in Rio Tinto, said it would consider selling shares in mining companies that remain members of lobby groups not supporting the Paris agreement.


Aberdeen voted in favor of a shareholder resolution in London on Oct 17 to compel BHP to leave the lobbying groups. Another resolution was held in Sydney on Nov 7.

"We have a number of escalation options available to use where we evaluate that engagement alone is not adequately addressing the severity of the lobbying activities," said Danielle Welsh-Rose, an investment director at Aberdeen. Those options include voting on similar future resolutions at other companies.

"Lobby groups are under more scrutiny than ever before," said Brynn O'Brien, executive director at the Australasian Centre for Corporate Responsibility (ACCR), an activist shareholder with minor holdings in BHP and Rio Tinto.

"Disruptive action will escalate," she said, adding that her group planned shareholder resolutions to get Australian energy companies to review and possibly suspend their membership of industry lobbies.

Allianz (DE:ALVG) Global Investors, the fund arm of German insurer Allianz SE, which manages around 557 billion euros, also raised concerns about investing in companies not fully aligned with Paris goals.

"For higher risk investments ... if we don't expect higher returns, then obviously the incentive to invest is that much lower," said Eugenia Unanyants-Jackson, Global Head of ESG research at Allianz Global Investors.

Sources at six other investors in top mining firms, who declined to be named, said climate change strategy was a top discussion point with boards and a growing factor in investment decision-making.

BHP put its membership in the NSW Minerals Council under review in December and will decide by April if it will remain in the group. But big mining companies are not leaving Australian lobby groups, for now.

BHP told Reuters that being inside an industry group "provides a leadership opportunity".

That echoed a position taken by Rio Tinto when it completed its industry review last April.

Under shareholder pressure, Anglo American vowed to change its rules in December to strengthen oversight of lobby groups. Anglo declined to comment further.


The NSW Minerals Council last year stated explicitly for the first time that they supported the 2015 Paris accord, and were committed to investing in technology that would improve efficiency and environmental standards.

The MCA says it will release a Climate Action Plan this year.

But some investors feel these moves do not go far enough, especially after the NSW Minerals Council launched an advertising blitz last year aimed at overhauling state planning laws, supported by the MCA, after a commission blocked new coal projects citing climate change concerns.

"We still don't see the MCA or NSW Minerals Council showing genuine support to meet the objectives of the Paris Agreement," said Australian Ethical's Palmer.

Investor concerns that moving slowly on climate change could affect profits has started to drive global change. BlackRock Inc (NYSE:BLK), the world's biggest fund manager, said last month that sustainability was "increasingly material to investment outcomes", as it committed to cut its exposure to coal.

While some in Australia remain skeptical of a human connection to global warming, the devastating fires that raged across the country recently are hardening public attitudes against coal.

A survey of 1,056 respondents in a new poll taken between Feb. 6 and Feb. 9 by Essential Research, a leading market research firm, found that 62% of Australians favored banning political donations from fossil fuel companies, with the same number opposed to new coal mines.

In a November 2019 poll by Essential Research, 60% of respondents said they thought Australia was not doing enough to address climate change, up from 51% in March.

At a rally outside the Australian Open tennis tournament in Melbourne last month, protesters waved flags and stuck black tape over their mouths to show their anger at perceived climate inaction by Morrison's government.

"We know that burning fossil fuels is the major problem for our greenhouse emissions and our country seems to be doing very little to change their ways," said retired teacher Libby Dougas, who was holding up a placard that read "Coal mining is a racquet".

PUBLIC ANGER Much of that public anger has also been directed at lobbying groups. On Feb. 11, protesters marched from Parliament to the offices of the MCA in Canberra to vent anger at what they said was a cozy relationship between Morrison's government and mining lobbyists.

Two of Morrison's chief advisors, John Kunkel and Brendan Pearson, have previously held top jobs at the MCA. Former mining executives also hold advisory positions at the top of the main opposition Labor party.

The MCA said it was proud to have had staff working in the past seven Australian governments as well as for the opposition. A spokesman for Morrison said government policy is decided by the cabinet and it "absolutely rejects" accusations that the prime minister is unduly influenced by the mining industry. Kunkel and Pearson did not respond to request for comment.

Previously unreported letters from the MCA to shareholders in their members show tensions are rising.

At the time of the BHP vote in November, a group of shareholders in mining companies including in BHP, said in an open letter published in Australian media that industry bodies, including the MCA and NSW Minerals Council, were failing to implement effective climate policy as agreed in Paris.

This prompted the MCA's leader to write to some of the group's shareholders in December.

In a private letter seen by Reuters, Tania Constable, the MCA's chief executive, said companies should "appropriately exercise their fiduciary duties to avail themselves of accurate information in respect of the MCA's contemporary position on climate change".

The MCA's letter was an "extraordinary" step, particularly the reference to the legal, or fiduciary, duties, ACCR's O'Brien said. A similar letter from the MCA to a broader range of investors, sent in January and seen by Reuters, removed the reference to fiduciary duties.

The MCA declined to comment on Constable's letter.

Fires and climate fears rattle Australia's giant coal lobby

Related Articles

Oil rises on renewed gasoline demand, weak dollar
Oil rises on renewed gasoline demand, weak dollar By Reuters - Aug 10, 2022 7

By David Gaffen NEW YORK (Reuters) -Oil prices rose on Wednesday, rebounding from losses early in the session, helped by encouraging figures on U.S. gasoline demand and as...

Gold Hits 5-Week High on Softening U.S. Inflation 
Gold Hits 5-Week High on Softening U.S. Inflation  By - Aug 10, 2022

By Barani Krishnan -- U.S. inflation is retreating as many expected it to. The question is where will gold go from here. Gold prices flew to five-week highs on...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
Sign up with Email