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The Australasian Centre for Corporate Responsibility

Shareholders invest to get financial returns.  To decide where to invest we need information.  Not all companies tell shareholders what we need to know.

 Shareholders are collectively the ultimate owners of the companies they invest in.  As owners we can have a say as to what our companies do. 

The Australasian Centre for Corporate Responsibility (ACCR) was formed to address these two issues, both the empowerment of shareholders as investors and the improvement of companies they invest in. 

ACCR is a not-for-profit organisation which not only works to improve investment practices and corporate responsibility but also to broaden the reach of ethical and responsible investment practices.  We research companies and issues pertinent to shareholders.  It is important to note that we do not advise investors where to invest but we do help them engage with companies both to get more information and to make a difference by making their shareholder views known.  We facilitate shareholders putting resolutions on company AGM agendas.  We facilitate shareholder advocacy.  We help people ‘put their mouth where their money is’. 

As an organisation we have a lot in common with ASA as both organisations are shareholder-focused.  The difference is that ACCR focuses more on broader social and environmental issues and not on day-to-day investment decisions and how to make them.

A good example of the kind of shareholder action in which the ACCR is interested would be the provision of affordable drugs for HIV/AIDS sufferers. After shareholder resolutions in 2013, pharmaceutical giant Bristol-Myers Squibb agreed to share the patent for its HIV/AIDS drug Atazanavir with the Medicines Patent Pool, allowing the drug to be offered at low cost in more than 110 countries.  This saved lives with minimal cost to the company and would not have happened without the well-informed intervention of shareholders.

To safeguard their investments, shareholders may also need to know more about their companies than boards choose to tell them.  A good example is investment in fossil fuels.  Whatever your views on climate change, it is clear that the world’s energy system is changing due to widespread environmental concerns (not just to climate change but also to water and air pollution) and to the rapid improvements in renewable energy technology.  There is a real risk that some fossil fuels reserves will become ‘stranded assets’ – in other words assets that are no longer of value because circumstances have changed.  A good example is that of the pile-up of incandescent light bulbs after the widespread introduction of compact florescent lights.

ACCR has facilitated resolutions at AGL and Origin about climate change and how it will impact their business which are both large producers of greenhouse gases.  AGL is Australia’s biggest single greenhouse gas polluter.  Last year shareholders put resolutions at the CBA and ANZ AGMs (largely as a result of an ACCR initiative) requesting that they tell their shareholders about the degree of their exposure to fossil fuels.  Potentially banks could be left with investments that have become worthless as the world’s energy system changes and governments take climate change action.  From overseas experience we know that such resolutions do not usually get passed so the ACCR was not surprised that they were not passed on this occasion.  Nevertheless, shareholder concerns about the issue were apparently heard as, since then, all 4 big banks have improved their disclosure.

Unfortunately Australian corporate law does not make it easy for shareholders to express their views to their companies.  Shareholders can and do communicate individually with companies but it is difficult for shareholders to get together effectively in order to tell a company that they have similar concerns.

ACCR recently ran a test case about shareholder rights.  The court ruled that shareholders can only present a resolution to an AGM in order to amend a company’s constitution and not simply to comment on the nature of its activities.  This is much more restrictive than in other countries, for example, in the UK, Canada, New Zealand or in the USA.  In America this year there are over 500 resolutions at company AGMs dealing with issues like specific remuneration arrangements, slavery and climate change!  This US system works well, leading to some notable changes.  A good example would be the shareholder resolutions about apartheid which in large part were responsible for the overthrow of apartheid in South Africa.  ACCR has appealed the decision.

If you are interested in what ACCR is doing, please check us out on their website  www.accr.org.au where you can sign up for their newsletter.

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