Shares of AGL Energy Limited (ASX: AGL) are tracking higher on Wednesday to trade at $8.58 apiece.
Investors are bidding up the AGL share price despite further action against the energy giant's planned spinout of its coal assets, reports say.
In wider market moves, the S&P/ASX 200 Energy Index (ASX: XEJ) has also climbed 71 basis points on the day.
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AGL faces renewed pressure against demerger
In the latest blow for AGL's planned divestment, industry super fund giant HESTA has stepped into the ring and shown its apprehension to the move.
HESTA owns a 0.36% stake in the energy giant per Bloomberg data. In a statement, the $68 billion super fund giant affirmed it will reject AGL's demerger when voting next month, with CEO Debby Blakey noting AGL's "emissions [are] effectively flowing through [HESTA's] portfolio".
"Shareholders are pushing for greater action on climate change and a more rapid transition that aims to enhance the company's ability to create long-term, sustainable value," Blakey said, cited by The Australian.
"AGL is one of Australia's biggest emitters…If AGL commits to Paris-aligned emission reduction targets this will have a hugely positive impact on Australia's pathway to net zero, lowering the overall systemic risk exposure of our members' investments," she added.
HESTA now joins the likes of billionaire tech entrepreneur Mike Cannon-Brookes – who earlier this year stepped in to veto the demerger in buying an 11% stake in the company – and a raft of other heavyweights in opposing the manoeuvre, including activist investor Snowcamp and Wilson Asset Management (WAM) chair Geoff Wilson.
Commentary from HESTA's Blakey confirms the super giant is well aligned with the criticism from these above entities:
We cannot simply divest away from the risk of Australia being slow to transition to a low-carbon future.
Responsible investors have a responsibility to their members to go to where the biggest emissions are and as owners try and first change the behaviour of these companies.
The demerger meeting is scheduled for 15 June and needs a 75% voting majority to go ahead. Interesting times in the month ahead for AGL, that's for sure.
In the last 12 months, the AGL share price has clipped a 4% gain but has soared more than 40% this year to date.
