Question 2

AGL faces climate pressure: investors $US54 trillion ($73 trillion)ClimateAction 100+ group saidAGLEnergy faces pressure to boost its disclosure on climate as investors increase demands on companies achieving net zero-emission goals. Proxy adviser Institutional Shareholder Services (ISS)told shareholders on Wednesday it backed an activist resolution forAGLto set short, medium, and long-term targets aligned with the Paris climate accord ahead of a planned split of the company into a green retailer and coal-focused electricity generator.ClimateAction 100+ saidAGL, Australias largest polluter, faces an increasing expectation for more transparency on how it will meet climate targets. Swinburne University of Technology Page 3of 5ACC30008School of Business, Law and Entrepreneurship Accounting TheoryInvestors engaging with carbon-intensive companies facing significant climate-related financialriskslikeAGLEnergy have been calling for greater transparency around how those firms intend to transition to net-zero emissions which for utilities is sooner than for most other sectors, ClimateAction 100+ Australia director Laura Hillis told The Australian.They will also be calling for accountability mechanisms such as governance structures and remuneration strategies that ensure that boards and executives are held to account in delivering transition plans. The Australasian Centre for Corporate Responsibility had accusedAGLof of not being prepared to set Paris-aligned targets although the electricity operator has vowed to give shareholders a vote on climate reporting for the split companies AGLAustralia and Accel Energy at their first AGMs should the demerger proceed.ISS said support for the resolution should not be unreasonable given AGLs plan for the vote once the companies are separated. Blackrock, the worlds largest asset manager, backed a shareholder resolution at last years AGM calling for the early retirement of AGLs Loy Yang coal power plant so the company can meet Parisclimatechange goals. The climate resolution will go to a vote at AGLs AGM on September 22.AGLcopped a giant first strike against its remuneration report at last years AGM with 46.5 percent of shares voted against the pay structure, and 30.4 percent of shares voted against a performance rights issue to former boss Brett Redman. Both ISS and CGI Glass Lewis said changes made byAGLmeant they had recommended in favor of the companys remuneration report this year even as they flagged several areas of concern.Extract fromWilliams,P. AGL faces climate pressure: investors. The Australian (Online). September 9, 2021.

Required.

I.What theories from ACC30008 can be applied to the discussion reported in the article? (Maximum words 500)(10Marks)

II.How can you link ethical investment with the discussion in the above article?(Maximum words 250)(5 Marks)

III.Do you believe that stakeholder pressure, particularly current shareholders, to adopt environmentally-friendly policies and practices for companies such as AGLleadsto greenwashing? Explain. (Maximum words 250).