Investors put pressure on Woodside Energy over climate concerns

The Australasian Centre for Corporate Responsibility (ACCR) has filed a members’ statement with Australian oil and gas company Woodside Energy opposing the re-election of chairman Richard Goyder over climate concerns.

In the members’ statement, ACCR, a research and shareholder advocacy organisation representing investors, claimed that Goyder has been “persistently unresponsive” to shareholder concerns over climate risk management.

“Under the chairmanship of Richard Goyder, the current board has resisted change in the wake of major shareholder votes at the last four Annual General Meetings (AGMs), each relating to its failure to deliver a credible strategy that will maximise shareholder value in the face of the global energy transition,” ACCR said.

The members’ statement for resolution will be voted on at Woodside Energy’s AGM on 24 April 2024.

ACCR warns that the company continues to allocate the majority of its capital to developing oil and gas projects, its Scope 1 and 2 decarbonisation targets are also not Paris-aligned, offsets dominating its transition strategy and Woodside has not a Scope 3 target.

Along with institutional investors Vision Super and Betashares, ACCR co-filed members’ statements with Woodside Energy Group at its 2023 AGM, calling on directors to be held accountable for the board’s repeated failure to present a credible climate strategy.

At the 2023 AGM, Woodside’s long- standing director Ian Macfarlane suffered a vote of 35% against his re-election over climate concerns.

In the most recent member’ statement, ACCR warned that Woodside’s net zero strategy  has “not materially changed” since last year. On top of that, disclosures in the 2023 Investor Briefing Day indicate that the company is persisting with its carbon-intensive growth portfolio that appears less value-accretive than a capital return strategy.

“The chair carries ultimate responsibility for the company’s direction, and therefore it is the chair who must be held accountable for Woodside’s current approach,” ACCR said.

HESTA action

Alongside ACCR, $81bn Australian pension fund HESTA, has also applied pressure onto Woodside Energy ahead of the 2024 AGM season.

Last month, HESTA, which owns a 0.8% stake in Woodside as of 8 March, urged the company to consider appointing new directors who are equipped to manage climate-related challenges.

The pension fund said that it believes Woodside should prioritise adding new energy and business transformation skills to its board.

"As part of this engagement, we shared with Woodside for their consideration, independent and highly credentialed potential director candidates, whose new energy and business transformation skills we believe would add to the board’s current capabilities," HESTA said in a statement.

AustralianSuper’s inaction

Alongside, HESTA, Australian pension funds including, $316bn AustralianSuper and $100bn HostPlus own shares in Woodside Energy.

Australia’s largest pension fund AustralianSuper is one of Woodside’s top five shareholders, reportedly owning 85 million shares in the company across all its investment options, representing 4.5% of the oil and gas provider.

Last week, environmental activist group Market Forces, alongside 40 other organisations, called on AustalianSuper to put Woodside under pressure over its climate strategy at its 2024 AGM.

Market Forces accused the fund of backing Woodside on all items at its 2023 AGM, while firms like BlackRock and Vanguard refused to back some items.

According to an analysis by the group, AustralianSuper was the only major super fund to “backpedal” on climate action at Woodside’s 2023 AGM by failing to increase pressure on the company through its voting behaviour.

This is despite the fact that the AustralianSuper’s 2023 Climate Change Report stated that Woodside Energy is amongst the top 20 contributors to its portfolio emissions.

In response to this, a spokesperson from AustralianSuper said: "As an investor in Woodside, AustralianSuper has been engaging with the company on its approach to climate change and its strategy to transition to a net zero economy.

"We will continue to evaluate Woodside’s decarbonisation plans and engage with the company consistent with our purpose for members."

Like AustralianSuper, HostPlus voted with management on every Woodside 2023 AGM item. 

Net Zero Investor has contacted HostPlus for a response.