By Liam Lilly
Last week, mere days from its Annual General Meeting, Woodside announced that it would, after all, allow a non-binding vote in 2024 on its widely discredited climate plan.
Faced with widespread criticism over its decision to deny investors a say on its climate plan and in the face of a high-profile campaign to remove several of its board members, Woodside has certainly conceded some ground.
Quite how much ground is a matter for debate. The vote, still 12 months away, will still be non-binding - as it was in 2022 - meaning that even if history repeats and Woodside suffers a massive vote of no confidence on its climate plan, the effect will be exactly the same; nothing will change. Woodside will continue to extract fossil fuels.
To say that Woodside ‘announced’ this last-minute reversal is somewhat of an exaggeration. The news was only shared with a very small, very select group of investors, rather than to any of the three stock exchanges on which Woodside is listed. This is not best practice.
In the words of Alex Hillman from the Australian Centre for Corporate Responsibility (ACCR), ‘Woodside held a Say On Climate vote in 2022 and ignored the result’. There is nothing to indicate anything will change in 2024. The experience of coming within 2 per cent of a ‘no’ vote against its climate plan clearly put Woodside in no mood to run that same risk again any time soon and actively moved the company further away from credible action on climate. After the next vote in 2024, Woodside only proposes to hold a non-binding vote every three years.
Woodside’s decision to allow any vote at all in 2024 would appear to come only in reaction to recent negative press coverage and as a last-ditch effort to protect board member, Ian Macfarlane, from a coordinated shareholder campaign aimed at his removal due to a continual failure to take meaningful climate action. In terms of trying to convince shareholders they care about climate change, Woodside’s announcement is a case of ‘too little, too late.’
In the wake of the announcement, LGIM - one of Europe’s largest asset managers - maintained its advice to vote against Macfarlane’s re-election to the Woodside board on the grounds of a ‘lack of commitment to aligning with Paris objectives’. Institutional Shareholder Services (ISS) has recommended that investors vote against the re-election of no fewer than three Woodside directors citing concern that the board had not been adequately responsive to result of the 2022 Say On Climate vote.
Another proxy advisory firm, CGI Glass Lewis, has also backed calls for Macfarlane to be ousted from his post. It also recommends that investors deny Woodside CEO Meg O’Neill a pay increase that could bring her salary to more than $12 million.
“Our voting recommendations are unchanged as a result of this update”, the firm said earlier this week, noting that Meg O’Neill’s bumper pay day could be ‘excessively generous’.
Investor concerns over Woodside’s reluctance to address its widely discredited climate plan is well placed.
The company is one of Australia’s largest polluters. Woodside’s own figures show it produced a colossal 75.6 million tonnes of pollution last year, while raking in $9.6 billion AUD in profit. It continued to dismiss responsibility for the majority of its emissions - known as scope 3 – by not setting fixed emissions reductions targets, out of step with other petroleum majors like BP and Shell.
There has been criticism, too, for Woodside’s reliance on offsets and unproven carbon capture technology (CCS) to achieve any proposed net reduction in emissions.
Meg O’Neill’s appearance at the National Press Club last week did not pass without questions over her company’s climate plan, nor the shareholder campaign targeting Woodside’s AGM.
O’Neill was tight lipped, ducking a question from the Sydney Morning Herald’s Nick Foley which highlighted the incongruity of Woodside’s commitment to fossil fuel expansion ‘as a social good’ whilst repeatedly failing to convince its shareholders of that argument.
Woodside’s tired line that it ‘supports the Paris Agreement’ – repeated again by O’Neill at the National Press Club – fails to convince in light of findings by CCWA and the research organisation Climate Analytics which show Woodside projects like Scarborough are not Paris aligned. Woodside’s gross emissions are still increasing and recent moves, like the merger with BHP’s enormous oil and gas division, are unlikely to convince its critics that the company is series about decarbonisation.
The idea that Woodside can argue it is helping to transition away from fossil fuels, while simultaneously investing in more fossil fuels, is entirely nonsensical.
O’Neill will face tougher questions still at its AGM this week. Whether investors will be in any mood to stomach the same tired lines remains to be seen.
Liam Lilly is a researcher on gas and emissions for the Conservation Council of WA, Western Australia’s peak conservation and environment body.
MEDIA INFORMATION: The Conservation Council of WA (CCWA) is the state’s foremost non-profit, non-government conservation organisation representing nearly 100 environmental organisations across Western Australia.
For more information, visit: ccwa.org.au.
CONTACT: For any enquiries relating to this release, please contact Robert Davies on 0412 272 570 or by email, [email protected]