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Woodside ‘ignoring investors’ by not putting climate plan to a vote
By Peter Milne
Woodside’s owners will not get to vote on its revised climate plan in 2023, after half of them rejected it this year, as the gas giant says it does not have enough time to fully incorporate assets it agreed to buy from BHP a year ago.
Woodside received a stinging rebuff at its May annual general meeting when 49 per cent of shareholders voted in a non-binding poll against accepting its plan for operating in an emissions-constrained future. Two weeks earlier, rival Santos suffered a 37 per cent no vote.
Woodside is doubling the size of its Pluto liquefied natural gas plant in WA’s north-west.Credit: Woodside
Australasian Centre for Corporate Responsibility climate lead Harriet Kater said for a fossil fuel company its climate strategy was its business strategy, and it was clear that Woodside shareholders expected to be able to vote on a new plan at the 2023 AGM.
Woodside chief executive Meg O’Neill said Woodside and BHP had accounted for emissions differently.
“We’ve got to get common numbers ... so we will have enough data to put the report out, but it won’t be sufficiently mature to vote with the shareholders,” she said.
Three of Woodside’s biggest shareholders - investment funds Black Rock, State Street and Vanguard - were asked about not getting a vote on a new climate plan in 2023 but all have a policy not to comment on individual companies.
Black Rock and State Street, which both own more than five per cent of Woodside, accepted the climate report put to shareholders in May.
Vanguard rejected the plan due to insufficient evidence it was aligned with the Paris Agreement and inadequate disclosure of the approach to Scope 3 emissions, according to an explanation of its voting published after the AGM.
At the 2022 AGM, Woodside chair Richard Goyder said the gas giant needed to do more to explain its position on the use of carbon offsets, Scope 3 emissions from customers burning its product, and its plans post-2030.
Woodside plans to cut its direct, or Scope 1 and 2, emissions by 15 per cent by 2025 and achieve a 30 per cent reduction by 2030 with help from carbon offsets and carbon capture and storage.
O’Neill said Woodside would address its Scope 3 emissions by making products that will help its customers reduce their emissions. The first major investment targeted for 2023 is producing hydrogen in Oklahoma, in the US, to fuel heavy transport.
“We stand behind our climate strategy,” O’Neill said.
Woodside announced on Monday a $US50 million ($79 million) investment in US-based LanzaTech, which is developing technology that uses bacteria to convert carbon dioxide to fuels and chemicals.
Kater said the investor activist organisation’s primary concerns about Woodside’s plans were its heavy reliance on offsets and the absence of a Scope 3 target.
“Ignoring investors is a high-stakes strategy for directors that are up for re-election at the 2023 AGM,” she said.
Kater said Scope 3 targets showed how a company was transitioning away from fossil fuels, but Woodside had no plan to stop developing new oil and gas projects.
“It is raining money for oil and gas producers now,” she said.
“However, a wave of demand destruction has been initiated as a result of crippling prices and with additional LNG supply coming online mid-decade, these conditions are unlikely to last.”
To date, Woodside’s emissions reductions are self-imposed, but that will likely change when Federal Energy Minister Chris Bowen completes his review of the safeguard mechanism that regulates large emitters outside the power sector.
For years Woodside has lobbied to be allowed to use international carbon credits to meet any mandated emissions reductions.
However, earlier this month Bowen said that would not happen for at least several years due to concern that the foreign offsets would not count towards Australia’s emissions reduction target.
Woodside faces the risk that international offsets already bought to reach corporate emissions targets would be of no use with regulated targets.
O’Neill said Woodside would continue to engage the government on the issue.
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