Kansai Electric faces pressure from shareholders to decarbonise

(Corrects dateline)

TOKYO (Reuters) – Some Kansai Electric Power shareholders, including Nordea Asset Management and KLP, say they will back a resolution opposed by the board requiring the Japanese electricity supplier to decarbonise to meet international targets on climate change.

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 like coal, which still has strong support in Japan.

The resolution put forward by the City of Kyoto, which owns a stake in Kansai and gave its name to the first international climate change agreement, requires 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.

Danish fund manager Nordea, which has around $300 billion under management, said it will back the proposal, which will be put to shareholders at the company’s annual general meeting in Osaka that starts at 0100 GMT.

“A commitment by Kansai Electric Power Company not to build any new coal-fired power plants and to formulate and disclose a CO2 emissions reduction plan for their coal plants is not just the right thing to do, it is also the smart thing to do,” Eric Christian Pedersen, head of responsible investments at Nordea Asset Management, said.

Kansai Electric did not immediately respond to a request for comment. The company’s board said earlier this month it opposes the shareholder resolution.

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 $95 billion under management.

AkademikerPension of Denmark will also back the resolution, its CEO, Jens Munch Holst, said.

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