Mike Cannon-Brookes: Australia’s first green corporate raider & More News Here

Mike Cannon-Brookes was remodeled into one in every of Australia’s first two tech billionaires when Atlassian, the software program firm he co-founded, went public on Wall Street in 2015.

Since then the 42-year-old, who’s normally seen sporting a T-shirt and baseball cap, has gained wider recognition in Australia for utilizing his fortune to fight world warming.

Until this yr, these efforts had been confined to philanthropic ventures and a collection of standard green investments. But in February, Cannon-Brookes teamed up with Canadian funding agency Brookfield to bid for AGL, an Australian coal-based utility and the nation’s largest carbon emitter.

Although AGL rejected the provide, the Sydney native this month revealed he had quietly amassed a 11.3 per cent stake within the group. Cannon-Brookes says he intends to make use of the stake to power the closure of AGL’s coal crops, thwarting the corporate’s plan for a demerger that will see them spun off right into a separate firm and run for an additional 20 years.

“The company is very wedded to a slow transition — a glacial transition if it’s any transition at all — away from its fossil fuel generating assets,” Cannon-Brookes stated in an interview. “That’s bad for the climate, it’s also very bad for their economics.”

The billionaire’s concentrating on of AGL has reverberated throughout an Australian enterprise world greatest identified for its mining business, which is beneath mounting stress to curb its personal emissions.

“If the demerger will get voted down, do you suppose that’s a vote of confidence within the board and administration crew?

Zoe Whitton, companion at Sydney-based local weather funding and advisory agency Pollination, says Cannon-Brookes’ local weather shareholder activism is a first of its type in Australia.

“I’m personally not aware of there being another case that’s got the overlay of activism that we’ve got here, but is entirely climate change-focused,” stated Whitton.

The raid on AGL perhaps the billionaire’s boldest transfer but, however it’s consistent with a profession that has mixed entrepreneurial chutzpah with a priority for social and environmental points. Cannon-Brookes arrange a philanthropic basis lengthy earlier than he made his fortune.

His profession started within the late Nineteen Nineties on the University of New South Wales, the place he met Scott Farquhar and the 2 established Atlassian. The firm, which they bought off the bottom with $10,000 in bank card debt earlier than securing enterprise capital backing, develops merchandise that assist software program engineers collaborate.

After making “don’t f**k the customer” one in every of its rules, Atlassian has discovered success by constructing versatile, open-source merchandise that don’t lock prospects into costly long-term licensing contracts.

The firm’s market capitalisation has climbed from virtually $6bn when it listed to $42bn, making Cannon-Brookes and Farquhar the fourth and fifth richest individuals in Australia, in response to an annual record printed by The Australian newspaper.

For now, Atlassian shareholders seem unfazed as Cannon-Brookes juggles working the corporate together with his ambition to speed up Australia’s shift to wash vitality.

Jeremy Gibson, a portfolio supervisor at asset supervisor Munro Partners, which invested within the firm shortly after it listed on the Nasdaq change in New York, stated he was reassured by the “depth of management” at Atlassian, the place Cannon-Brookes and Farquhar are joint chief executives. Cannon-Brookes insists his pursuits past Atlassian don’t intervene together with his “day job.”

However, his more and more muscular activism in a rustic the place local weather change stays a polarising situation has put Atlassian beneath the highlight.

The firm has been accused of hypocrisy for paying little or no corporate tax: it had a tax invoice of simply A$24.7mn in 2020 after paying nothing in 2018. That has given ammunition to critics who say it undermines Cannon-Brookes’ authority when he upbraids the federal government over its local weather change insurance policies.

Atlassian says its low tax invoice is a results of its important expenditure on analysis and improvement, spending that beneath Australian regulation could be deducted from taxable revenue.

The firm’s co-founders stay shut associates in addition to enterprise companions. In 2018, Cannon-Brookes spent A$100mn on a mansion on Sydney Harbour subsequent door to Farquhar’s sprawling property.

But whereas Farquhar has stored a comparatively low profile, Cannon-Brookes’ activism has made him a family title in Australia. He describes watching An Inconvenient Truth”, former US vice-president Al Gore’s 2006 movie about local weather change, as a “life arc” second.

Although the failed bid for AGL is his most eye-catching intervention, Cannon-Brookes has already ploughed a few of his fortune into green investments through Grok Ventures, his household workplace. They embrace Sun Cable, an bold plan to construct a 20 gigawatt photo voltaic farm in Northern Australia and export electrical energy alongside an undersea cable to Singapore.

The software program entrepreneur shouldn’t be the first billionaire to take up the difficulty of local weather change. In Australia, mining magnate Andrew Forrest has backed green hydrogen, and has additionally invested in Sun Cable. Microsoft founder Bill Gates has thrown billions of {dollars} into efforts to develop low carbon applied sciences.

But taking intention at a listed firm has set Cannon-Brookes’ method aside. It additionally makes a probably bruising battle virtually inevitable within the run-up to AGL shareholders voting on the demerger plan on June 15.

Cannon-Brookes is dismissive of the demerger, which alongside the coal-based era enterprise would create a retail enterprise that buys vitality from third get together turbines and sells it. The demerger would finish the “gentailer” mannequin well-liked in Australia, wherein vitality corporations are each turbines and retailers of electrical energy.

Instead, Cannon-Brookes argues AGL ought to stay a single firm, use earnings from its total enterprise to spend money on low-carbon expertise and shut the coal crops down sooner.

“If the demerger gets voted down, do you think that’s a vote of confidence in the board and management team?” he stated. “Would it be tenable for them to stay on afterwards in significant number?”

AGL, which final week launched a 356-page doc detailing the advantages of the proposed demerger, say Cannon-Brookes has not introduced a severe, detailed different.

With AGL stepping up its personal preparations for the demerger, the result of Cannon-Brookes’ efforts will probably be carefully watched as vitality teams the world over wrestle with the way forward for fossil fuel-based companies. Pension fund Aware Super has voiced issues about AGL’s proposal, whereas different huge shareholders, together with BlackRock, haven’t joined the general public debate over the group’s future.

Cannon-Brookes, who will spend the following month lobbying AGL shareholders, admits it is going to be an “uphill battle”, however shouldn’t be brief on self perception.

 “What am I good at? Technology, business, finance, economics — all the ingredients required to make this transition. I’ll put those skills up against anyone on the board or management team,” he stated.

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