Just Share, a nonprofit shareholder activist group, said in a statement that the coal producers had declined the resolutions filed by itself as well as Aeon Investment Management and Fossil Free South Africa on 19 April. 

“The resolutions filed at Thungela and Exxaro ask the companies to report to shareholders, in accordance with the Global Standard on Responsible Climate Lobbying, on the alignment of their own lobbying and policy engagement activities, and those of the industry associations to which they belong, with the goals of the Paris Agreement,” Just Share said. 

The Paris Agreement is a global framework that aims to slash greenhouse gas emissions to limit the global temperature increase this century to 2°C while pursuing efforts to cap it at 1.5°C.

Coal producers are in the crosshairs given the fossil fuel’s links to climate change, which are pretty much set in scientific stone.

Just Share maintains that the companies have a legal obligation to table the resolutions. 

“The co-filers dispute, supported by a legal opinion, that directors of JSE-listed companies have discretion to refuse to table shareholder-proposed resolutions that comply with the procedural requirements of the Companies Act,” it said.

“They cannot refuse to table them 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.”

That legal opinion noted that JSE-listed Sasol had also declined to table climate risk-related resolutions filed by Just Share and other shareholders from 2018 to 2021. Standard Bank did the same in 2021. 

Read more here: Summary: Legal opinion on shareholders’ right to file climate change-related shareholder resolutions | Just Share

So this is not unprecedented, but the legal opinion – which does not carry the weight of a court ruling – maintains that: “Directors do not have a unilateral discretion to refuse to table shareholder-proposed resolutions on content-based grounds.” 

Among other things, Just Share takes issue with Thungela’s disclosure of its industry association memberships, including with the World Coal Association (WCA). As its name suggests, it’s not exactly anti-coal.

“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 that 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. 

Just Share goes on to cite InfluenceMap, a climate-focused think tank that holds that “the WCA engages negatively on climate policies and ‘appears generally oppositional to ambitious global climate change policy’. In its Climate Change Report, Thungela describes the WCA as representing ‘industry leaders committed to building a sustainable future for global coal’.”

Which it kind of does on its website: WCA Commitment – World Coal Association

In fairness to Thungela, any shareholder can easily go onto the WCA’s website or read media reports about its activities. And in fairness to Just Share, there is nothing wrong in making publicly listed companies provide more disclosure about the industry associations in which they hold memberships, and their own activities on that front. 

In response to queries from Business Maverick, Thungela said: “Thungela 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.” 

And Just Share could obviously publish the outcomes of such an engagement. 

Thungela, it is probably worth noting, is a spin-off from Anglo American, which divested its South African thermal coal assets under shareholder pressure, and as it strives to meet its own decarbonisation targets in an age when ESGs – environmental, social and governance concerns – are all the rage. 

A conveyor bridge over piles of coal at the Mafube open-cast coal mine, operated by Exxaro Resources and Thungela Resources, in Mpumalanga, South Africa, on 9 September 2022. (Photo: Waldo Swiegers / Bloomberg via Getty Images)

“Exxaro discloses some of its industry associations in its 2022 ESG report but provides no detail of the nature of its membership, or the alignment of the association’s climate-related engagement with the Paris goals,” Just Share said. 

Exxaro had not responded to our requests for comment as we went to press, but if that is true, the company should come clean on all of its industry associations. 

It’s a pretty basic thing at the end of the day, and saves shareholders the trouble of going to Google to find out themselves. It’s not like the company belongs to any secret cults. 

The bottom line is that this is an example of activist shareholders trying to bring more transparency to the coal sector, which is no bad thing. Will that deprive it of more of the financial oxygen it requires for survival? A growing number of banks will not provide finance to new coal projects, and a growing number of investors are also divesting from coal – Thungela being a case in point. 

The writing is probably on the wall for coal, but activists can’t be faulted for trying to hold the sector to higher levels of transparency. These examples might strike some as nitpicking, and perhaps shareholder votes are not always required on these matters. 

But the climate crisis is real, and public policy will increasingly force the industry’s hand. DM/BM