Origin Energy has received a demand to look at climate change impact across its operations when reporting on financial performance.
A failure to reflect climate change in financial statements calls into question the governance of directors and the diligence of auditors, a shareholder activist organisation said on Friday.
The shareholder resolution filed with Origin by the Australasian Centre for Corporate Responsibility (ACCR) calls for audited financial statements to include a climate sensitivity analysis from the 2023 financial year.
The analysis would include a scenario aligned with limiting global warming to 1.5 degrees, estimates and judgments for all scenarios used, and cover all business operations including gas exploration.
“This is not a radical request – Australian regulators have been expecting this since 2018,” ACCR spokesman Alex Hillman said.
“Climate change is a material risk that firmly belongs in audited financial statements.”
Origin said it would respond in September, ahead of the October annual general meeting, with board recommendations on resolutions.
Investor-led organisation Climate Action 100+ assessed last year’s financial statements and audit report, and found there was no consideration of climate change risks.
Mr Hillman says Origin has already suffered “significant impairments” due to climate transition risks at the coal-fired Eraring power plant in the Hunter Valley, which is earmarked for an accelerated closure.
Australia’s largest power station, Eraring accounts for a quarter of NSW’s power requirements and is being shuttered seven years earlier than once planned.
Origin has government approval to build Australia’s largest grid-connected battery at the Eraring site ahead of closure in 2025 as part of energy transition plans.
But ACCR is taking aim at Origin’s gas plans, claiming exploration assets in the Beetaloo, Canning and Cooper basins could be “rendered worthless”.
Origin’s 2022 results are due out next Thursday.
