Increasing dissatisfaction among investors regarding climate governance at Woodside AGM
Woodside Energy Faces Record Opposition Over Climate Strategy
At its annual general meeting (AGM) held today in Perth, Woodside Energy faced significant opposition from shareholders over its climate risk management and decarbonization strategy. The provisional results indicate that 19.45% of shareholders opposed the re-election of Ann Pickard, chair of Woodside's sustainability committee, which marks the worst vote on record against a committee chair for Woodside and the second worst vote ever against a Woodside director.
The record-breaking opposition extends to other directors, including Chairperson Richard Goyder, who received a 16.6% vote against his re-election, and Ben Wyatt, who chairs Woodside's audit and risk committee. CalPERS and CalSTRS also opposed Tony O'Neill's bid for re-election.
The dissatisfaction stems from Woodside's current approach, particularly regarding plans to expand gas projects that contribute significantly to climate change. Last year, 58% of shareholders voted against Woodside's climate transition plan, and this year's vote against the company’s climate strategy was the largest global vote of its kind against any fossil fuel company.
Despite Woodside reporting progress on emissions reduction, such as being "firmly on track" to reduce net equity Scope 1 and 2 greenhouse gas emissions by 15% by 2025, shareholders and critics argue the goals are insufficient to align with the scale and urgency of the climate crisis. Rohan Bowater, lead oil and gas analyst at Accela Research, stated that Woodside's emissions rose 10% in 2024 once offsets are excluded, despite reporting a decline.
To address these concerns, Woodside could increase ambition in emissions reduction targets, enhance disclosure and reporting, engage shareholders proactively, expand investment in renewables and low-carbon technologies, and align its gradual transition with climate science. Setting longer-term goals aligned with net-zero by 2050 and interim science-based targets would demonstrate stronger commitment. Providing more detailed, transparent, and independently verified disclosures on climate risks and decarbonization progress, including Scope 3 emissions, would improve investor trust.
Holding open dialogues with shareholders and incorporating their feedback into board decisions and strategy can rebuild confidence. The opposition to current leadership suggests a need for improved governance relating to climate issues. Expanding investment in renewables and low-carbon technologies, potentially including those deployed in FPSOs (Floating Production Storage and Offloading units), may help transition the business model.
As some firms argue for an orderly energy transition recognizing fossil fuel demand in the near term, Woodside must clearly articulate how its strategy reconciles short-term realities with long-term climate goals to avoid accusations of greenwashing. Three-quarters of Woodside's transition spend is going to one gas + CCS ammonia project in the US, according to Bowater. This project is likely to only deliver 1-2% of total company sales by FY30, leaving little budget for more reliably low-carbon offerings.
In summary, Woodside’s current climate risk management and decarbonization strategies have not satisfied a majority of shareholders due to perceived insufficient ambition and ongoing fossil fuel expansion. Stronger emissions targets, better transparency, active stakeholder engagement, and clearer transition pathways are critical for mitigating shareholder concerns and aligning with evolving climate expectations.
- Shareholders and critics argue that Woodside Energy's current approach to climate change, which includes plans to expand gas projects, is insufficient to align with the scale and urgency of the climate crisis, especially in light of the company's record-breaking opposition at its annual general meeting.
- To resolve this dissatisfaction, Woodside could consider increasing ambition in emissions reduction targets, enhancing disclosure and reporting, engaging shareholders proactively, expanding investment in renewables and low-carbon technologies, and setting longer-term goals aligned with net-zero by 2050 and interim science-based targets.
- As shareholders and investors increasingly focus on the environmental and financial implications of climate change, it is crucial for companies like Woodside Energy to address these concerns and adapt their business models to align with environmental science, climate science, and evolving climate expectations, potentially through the deployment of renewable energy technologies and the transition away from fossil fuels.
