The increasing pressure on the Australian gas industry to do more to deal with the climate crisis has been underlined by more than 50% of Woodside Petroleum’s shareholders asking companies to set science-based greenhouse gas targets.
Slightly more than half of Woodside investors who provide insight support a motion that sets targets according to objectives Paris climate agreement to reduce own emissions and “scope 3” emissions released by consumers from their products, many of them in Asia.
Mosi also asked the company to release details about how planned a new billion-dollar gas investment, which is stalled until next year due to the Covid-19 pandemic, will be in line with Paris’ goal of limiting warming to well below 2C, and whether remuneration policies encourage executives to ensure emissions targets are met.
Activists say this is the first time climate resolution has received more than 5% support in voting by shareholders of Australian fossil fuel companies.
Woodside is the largest oil and gas company in Australia. Voting follows 43% support for similar movements among the shareholders of the country’s second largest oil and gas company, Santos, earlier this month.
There were no binding votes – a motion not formally cast after the previous vote to change the company’s constitution to allow advisory resolutions to fail – but the strength of support for greater climate action among shareholders surprised even activists.
Dan Gocher, from the activist group of shareholders, the Australasia Center for Corporate Responsibility, said support for his movement of 50.2% of Woodside’s shareholders was very surprising given the company’s board had opposed it.
“This is a breakthrough moment for investor action on climate change in Australia,” he said.
“Until Woodside explains how its business will be in line with the objectives of the Paris agreement, the company will be in open conflict with the majority of its shareholders. This is a position that cannot be maintained for the company. “
The second resolution called on Woodside to review its links with groups lobbying on behalf of fossil fuel companies, such as the Australian Petroleum Production and Exploration Association, received 42.7% support from voter shareholders. Both movements were supported by several large proxy advisors, including ACSI, Glass Lewis, ISS, PIRC and Regnan.
Woodside’s chief executive, Peter Coleman, said the company recognized investor and community interest in “the challenge of climate change”. The company says it aims to achieve zero net emissions for its own operations by 2050 but believes gas, as a fossil fuel that releases less when burned than coal, is the solution to global warming.
“We will continue this conversation because our business plays its role in supplying reliable energy while supporting progress towards a lower carbon world,” Coleman said at the meeting, which was held online because coronavirus pandemic.
Coleman and Woodside’s chairman, Richard Goyder, was asked whether the company had evidence to support its claim that its gas reduced global emissions by displacing coal use in Asia. Coleman said the company did not collect information from customers, and pointed to it a study comparing life-cycle emissions from various forms of energy.
Emma Herd, chief executive of the Investor Group for Climate Change, said Australian oil and gas companies clearly risk falling behind their European counterparts, such as BP and Royal Dutch Shell, in planning to diversify their business and set strong targets in line with the agreement Paris.
“Investors expect the companies they invest in to overcome their contribution to increasing global emissions,” he said. “It is now Woodside’s responsibility to work constructively with investors to develop concrete plans for the transition to companies without emissions by 2050.”
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