TOKYO: Kansai Electric Power shareholders on Friday rejected a proposal requiring the company to stop using coal and decarbonise its business in a victory for the board over activist demands for climate action.
Activist investors are increasingly turning their attention to Japanese companies, using resolutions that have been employed in Europe and the United States to push companies and banks away from investing in, or financing fossil fuels, especially coal, which still has strong support in Japan.
Shareholders voted against the proposal during the company's annual general meeting in Osaka in western Japan, a spokesperson said.
It had been put forward by the City of Kyoto, which owns a stake in Kansai and gave its name to the first international climate change agreement. The proposal would have required Kansai Electric to stop building new coal plants and to use carbon capture and storage for its existing coal stations, a city official told Reuters earlier.
"Electric utility companies in Japan, such as Kansai Electric Power, play a pivotal role in driving the country’s energy transition towards a net zero society," said Aina Fukuda, Japan ESG Manager at Legal & General Investment Management, which supported the proposal on decarbonisation.
She said the fund would continue to engage across the industry to push for greater transparency and action aligned with the 2015 Paris agreement on curbing emissions.
Kansai Electric, which serves Osaka and its industrial environs - an area with roughly the same economic output as Mexico - this week restarted an old reactor that had to get special approval to remain in operation.
"There is no excuse for wasting capital on risky nuclear or polluting coal when clean solutions are readily available," said Kiran Aziz, senior analyst and lawyer at KLP, Norway's largest pension fund, which has US$95 billion under management.
(Reporting by Aaron Sheldrick; Additional reporting by Yuka Obayashi; Editing by Elaine Hardcastle and Barbara Lewis)