This week's election of four new directors to the board of AGL is a triumph of the clean energy revolution over the vested interests of the fossil fuel order.
The headline is that Australia’s largest domestic climate polluter – that as recently as last year was planning to burn coal until almost 2050 – is now committed to an early exit from fossil fuels and a transition to becoming a renewable energy powerhouse.
Roughly 18 months ago, Greenpeace was (unsuccessfully) sued by AGL for making fun of its logo as part of our campaign to shift the company from coal to renewables. Now, the current AGL board chair is apparently quoting us in internal company meetings.
The transformation is stunning. But how did it come to this?
All sorts of strange and terrible attitudes and behaviours have seemed natural and beyond question across different human communities and societies over millennia — and the contemporary milieu of late capitalism is no different.
Notoriously, within small teams or communities in particular, bizarre and destructive behaviour can become normalised when shared assumptions are not challenged, and the desire for conformity overpowers the ability to make sound decisions. Among sections of Australia’s business elite, ongoing commitment to the continued mining and burning of fossil fuels fits within this category.
Looking in from the outside, it can be extremely hard to understand why a small group of highly educated and very, very well-paid people – like a major corporate board – can so unthinkingly continue to walk down a decision-making pathway leading both to mass destruction of shareholder value and the life systems on which we all depend. Yet that is exactly what AGL’s corporate leadership has been doing.
In June 2021, AGL posted a $2 billion loss for the 2020/21 financial year due to its stubborn refusal to respond to rapidly changing business conditions.
Then-AGL board chair Peter Botten openly admitted:
“There is no doubt that the winds of change in the electricity market has been substantially faster than many people have anticipated.”
Botten went on to say that he “didn't see quite the level of change and the acceleration of that change" coming and that his failure was “representative of the AGL board”.
The group-think of the AGL board is itself situated in a wider system of power relations.
A recent piece in The Conversation questioned how ‘a technologically advanced society could choose to destroy itself by failing to act to avert a climate catastrophe...’ because of a state of mind described as ‘fossil fuel hegemony’ — an ideology instantiated in a set of institutional relations which assumes that ‘corporate capitalism based on fossil energy is a natural state of being [and] one that’s beyond challenge’.
You can see the attitudes typical of fossil fuel hegemony embedded in the group-think of AGL’s board under Botten — a board collectively unable to effectively respond to the scale of change occurring in the sector because it struggled to comprehend what was happening.
Fast forward to November 2022 and only two members of the AGL Board from June 2021 remain in place after some very public internal carnage earlier this year.
The longest serving is Patricia McKenzie who recently became the new AGL board chair — after a search process that she herself oversaw and which apparently failed to identify an acceptable alternative candidate from among the other eight billion people on the planet.
Despite being one of the old guard, in comments in September, McKenzie did appear to begin to reckon with the scale and pace of change in the energy sector, announcing plans to bring forward AGL’s coal closures to 2035 — a huge improvement, but still short of what is needed for the corporation to comply with Paris climate goals.
However, in early November, McKenzie was back in print, this time full of the same kind of naysaying that got AGL into a gigantic mess in the first place, by focusing on the alleged constraints that limit the company’s ability to keep pace with the times.
The election of the four new directors to AGL's board this week is of enormous significance because it represents a genuine rupture from the fossil fuel-dominated status quo and the triumph of a counter-hegemonic tactical alliance of outraged community and climate-concerned capital. Significantly, McKenzie opposed the nomination of three of the new directors — but they got up anyway.
As business columnist Elizabeth Knight recently said:
'AGL chairman Patricia McKenzie must be feeling a bit like the lobster sitting in the tank at a Chinese restaurant which advertised lobster tail as its daily special.'
The new direction at AGL has been achieved through a combination of activism and restless capital, tactically aligned and focused on a company that was vulnerable to changed technological, political, social and environmental circumstances to which it had failed to adapt. It is a major strategic victory for the clean energy revolution.
David Ritter is the chief executive officer of Greenpeace Australia Pacific. You can follow David on Twitter @David_Ritter.
- Banks suspected in AGL's climate foul play
- AGL keeps coal burning as business suffers
- AGL takes Greenpeace to court over climate campaign
- Getting down and dirty on CSG in NSW
Support independent journalism Subscribe to IA.