SYDNEY: Australian Gas Light (AGL) Energy Ltd has shelved a plan to split most of its coal-fired power plants and says its key leaders will step down after a campaign by billionaire Mike Cannon-Brookes for faster climate action.

       The Sydney-based utility will suspend its plan to demerge into retail unit AGL Australia and Accel Energy, which would take over control of most of the aging fleet of coal plants, it said in a statement.

       Chief executive officer Graeme Hunt and chairman Peter Botten will remain in their roles until replacements are found.

       The decision comes after Atlassian Corp founder Cannon-Brookes and other investors spoke out against the split of Australia’s biggest scope one greenhouse gas emitter.

       The move highlights the increasing role climate issues are playing in Australia, including the vote into power last week of a new government that has vowed to end decades of inaction by one of the world’s highest per-capita emitters.

       This is a “huge day for Australia,” Cannon-Brookes said yesterday in a post on Twitter.

       His Grok Ventures investment arm has taken control of about 11% of AGL, a stake he is using to unwind the company’s plan and push for more aggressive climate action.

       AGL earlier this year rebuffed a takeover approach led by Brookfield Asset Management Inc aimed at speeding its path to net zero.

       The power producer will review its strategic direction including “any new approaches from third parties regarding alternative transactions,” it said.

       It will also consider “further consultation with a broad range of stakeholders including Grok Ventures and other shareholders, regulators, governments and communities.”

       Other staffing changes include Jacqueline Hey leaving her position as a non-executive director, effective yesterday, and Diane Smith-Gander resigning from the board following full-year results in August.

       The board says it will immediately commence a search for replacements.

       AGL cancelled a meeting of shareholders scheduled for June 15 to vote on the demerger. The utility aims to report to shareholders in September and will provide an update on progress with its earnings results, it said.

       The company no longer believed the demerger plan could win sufficient support to meet a 75% approval threshold, AGL said.

       AGL’s strategic review needs to accelerate a transition away from coal-fired power generation, said Climate Lead Australia’s Harriet Kater, at the Australasian Centre for Corporate Responsibility, a shareholder activist group.

       “The current board of AGL wasted 18 months on the demerger and five years of underinvestment in renewable energy,” said Kater .

       “New leadership must be brought in to take the company forward.” — Bloomberg