The Perth-based energy producer has come under growing scrutiny from environmental activists and institutional investors alike,with some criticising the company’s climate targets as too weak and questioning its plans to develop new fields to expand the production of fossil fuels.
Woodside chief executive Meg O’NeillSupplied
Woodside was dealt an embarrassing rebuke when 49 per cent of shareholders rejected its climate action plan the last time it was put to a vote in 2022.
An updated plan will be put to another vote next month at Woodside’s annual investor meeting,which looms as a critical test for the company and its chairman,Richard Goyder,who faces re-election.
At an investor briefing on Monday,Goyder acknowledged shareholders’ requests for better explanations of what future demand for its fossil fuel exports may look like as countries aggressively pursue net-zero targets by 2050 or sooner,and how Woodside would work to reduce its own carbon footprint.
“We have listened and are acting on your feedback,” Goyder said.
“Our climate transition action plan will be put to an advisory vote of shareholders at our annual general meeting this year – and I believe it deserves the firm support of our shareholders.”
As Australia’s top shipper of liquefied natural gas (LNG),Woodside has been at the forefront of intensifying struggle between the industry’s plans to expand output to meet ongoing customer demand in Asia and those worried about the fuel’s contribution to the worsening climate crisis.
The company’s under-construction $16.5 billion Scarborough gas project off the coast of WA has been a particular focus for campaigners fighting to halt the expansion of all new fossil fuel projects that threaten to unleash more greenhouse gas emissions and contribute global warming.
Chief executive Meg O’Neill told shareholders on Monday the company was on course to meet its interim climate targets,which aim for a 15 per cent cut to direct net greenhouse gas emissions by 2025,while also committing to new measures to address “Scope 3” emissions – those released when the gas it sells is burned by customers across the world. By 2030,Woodside said it now plans to invest in new clean energy projects capable of abating 5 million tonnes a year of carbon dioxide emissions.
O’Neill added that Woodside’s main product of liquefied natural gas (LNG) could aid global decarbonisation efforts by enabling the greater uptake of clean energy across its customer markets in Asia. With half the typical life-cycle emissions of coal,she said,LNG can displace coal-fired power by providing the back-up for renewable energy when the wind isn’t blowing and the sun isn’t shining.
However,a growing number of powerful investors are increasingly asking questions about the role of gas in a world that’s getting serious about ratcheting up climate action,electrification,and phasing out the consumption of all fossil fuels.
The $81 billion superannuation fund HESTA,which owns shares in Woodside,has the company on a “watch list”,meaning it subjects it to stricter monitoring and engagement and the risk of divestment if progress in mitigating climate risk is deemed inadequate.
HESTA on Monday said it had been in talks with the Woodside board for “several months” and had asked it to consider appointing new independent director nominees with skills related to the energy transition and business transformation.
“HESTA remains of the view that Woodside has an opportunity to meet the strategic challenge of the climate transition,” it said. “To capture that opportunity,we believe Woodside should prioritise adding new energy and business transformation skills to its board to drive strengthened ambition and innovation.”