CSL | Risks from relying on gas

Status
Withdrawn
AGM date
Resolution details
Company ticker
CSL
Lead filer
Sustainable Investment Exchange
Resolution ask
Report on or disclose
ESG theme
  • Governance
ESG sub-theme
  • Shareholder rights
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Health Care
Company HQ country
Australia
Supporting materials
Resolved clause
Shareholders request that CSL identify and report to shareholders on material risks to the Company as a result of its dependency on gas in the face of threatened gas shortages and price rises in Australia as early as the middle of this decade.
Supporting statement
To produce its products CSL uses high temperature steam for various purposes such as sanitization, the distillation of water for injection (WFI) and the fractionation (separation) of plasma.

CSL predominantly burns gas to generate steam in boilers and electricity in cogeneration units at its manufacturing facilities with legacy infrastructure, however it doesn’t disclose the amount of gas it uses. CSL has made progress to reduce gas use through onsite renewable energy generation, the electrification of plants and heat recovery from waste management processes. However it still faces significant financial and operational risks as a result of reliance on gas.

Gas is a fuel characterised as volatile, uncertain and risky. Sharp price increases are highly possible as the East Coast gas market in Australia is predicted to face a shortfall in supply by 2026 in states where CSL has numerous manufacturing facilities, exposing the company to gas price increases. These facilities include CSL Behring and Sequiris facilities in Melbourne, Victoria, its head office and regional distribution centres. This includes the only cell-based influenza vaccine manufacturing facility in the Southern Hemisphere that produces seasonal and pandemic influenza vaccines.

CSL has conducted preliminary assessments of implementing heat pumps to replace gas fired cogeneration systems and alternatives to distillation for production of WFI, however it has not made the results of these assessments publicly available.

The increased efficiency of alternative technologies, such as electro-boilers and Mechanical Vapour Recompression (MVR) means that CSL is able to more reliably cap business costs and recover upfront investments through efficiency savings. CSL has shown this is possible with its all-electric manufacturing facility in Tullamarine.

Without a public plan for transitioning away from gas use, the risks from relying on gas are also passed on to their shareholders. As Australia’s largest vaccine producer it is vital that CSL operations are not disrupted, not just for shareholders but for the health and safety of community members all across Australia.

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