On May 11, public hedge fund Man Group (UK), asset management giants Amundi (France) and HSBC Asset Management (UK), and The Australasian Centre for Corporate Responsibility (ACCR), a non-profit organization working on shareholder action, jointly submitted a shareholder proposal to Japan’s Electric Power Development Co., Ltd. (J-Power) to strengthen the company’s decarbonization strategy.

This is the first time a climate change-related shareholder proposal led by an international asset management company has been submitted in Japan. The impact of the proposal is significant, as the assets under management of the three companies submitting the proposal total an estimated $3 trillion (approximately 390 trillion yen).

The proposal calls for J-Power*, Japan’s largest coal-fired power generation company, to set short- and medium-term emission reduction targets in line with the Paris Agreement, and to disclose its plans for achieving these targets.

* J-Power owns and operates seven coal-fired power plants in Japan, with a total capacity of approximately 8,400 MW.

The investors submitting the resolution positioned it as a set of proposals “to protect J-Power’s long-term value given the risks and opportunities associated with the global shift away from fossil fuels, and marks an important milestone in sharply rising investor engagement on climate change in Japan.”

In announcing the shareholder proposal submission, the proponents state that it “follows months of engagement between J-Power and the investor group, about concerns that J-Power’s current decarbonisation strategy, dubbed Blue Mission 2050, would see the company lose competitiveness as Japan moves to cut greenhouse gas emissions to net zero by 2050.” The proposal also emphasizes the results of TransitionZero’s analysis of the feasibility and cost of the coal-based technologies that J-Power plans to implement, such as hydrogen and ammonia co-firing.

For further information on this shareholder proposal, please see the following links:

Related Links:

• J-Power Company Engagement Profile (TransitionZero)
• First institutional investor group-led climate shareholder proposals filed in Japan (ACCR News)（May 11, 2022）
• J-Power News Release: Notice Concerning Receipt of Shareholder Proposals（May 13, 2022）(PDF)
• J-Power News Release: Notice regarding the Opinion of the Board of Directors on the Shareholder Proposals (May 24, 2022) (PDF)

 

References:
【Report】 Japan’s Decarbonization Technologies Hinder Net Zero Target (2022/2/25)
【News】Four shareholder proposals submitted by NGOs to accelerate climate measures (2022/5/31)