Home > HESTA must ramp up the pressure on Santos

HESTA must ramp up the pressure on Santos

12 April 2023

13 April 2023

HESTA last week lodged a formal vote calling on oil and gas company Santos to wind up oil and gas production in line with a net zero emissions by 2050 pathway. This is a great sign HESTA is taking members’ concerns seriously, but with Santos still pursuing several new oil and gas projects that would lock in further emissions for decades to come, HESTA must now draw a line in the sand.

We already know there can be no new oil and gas fields developed if we’re to have a fighting chance of meeting the climate goals of the Paris Agreement. Yet Santos is still planning to spend billions on new oil and gas projects that would see the company’s overall emissions increase 40% by 2030.

While HESTA has finally put some pressure on Santos, the fund must now ramp up its action and commit to divesting from Santos if the company continues pursuing new fossil fuel projects.

Santos’ oil and gas projects are not just damaging to a safe climate future. Tiwi Islands and Gomeroi Traditional Owners attended Santos’ AGM last week to voice opposition to Santos’ Barossa and Narrabri gas projects, as the company does not have the free, prior and informed consent of these Traditional Owner groups. This was in the same week that Tiwi Islands Traditional Owners filed human rights complaints with Australian and international banks – including ANZ, Commonwealth Bank, NAB and Westpac – over their involvement in financing Santos and its Barossa project.

The good news is HESTA appears to be finally coming around to the idea that meeting global climate goals means no new fossil fuels. Now, more than ever, is the time to keep up the pressure on HESTA and demand the fund stop investing members’ retirement savings in climate-wrecking fossil fuel expansion.

Take action

Demand HESTA take further action at Santos.

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Dear HESTA, It was good to see HESTA voting in favour of the shareholder resolution at Santos’ recent AGM, calling for plans to manage down oil and gas assets in line with a net zero by 2050 scenario. It was also good to see the fund voting against the re-election of company director Janine McArdle, but disappointing to see votes for the other two directors up for re-election and against the company’s remuneration report. With Santos targeting three new oil and gas projects for final investment decisions this year or next, HESTA cannot afford to wait for next year’s AGM to marginally increase pressure on the company. I ask that you publicly commit to divesting from Santos if it makes any further final investment decision on a new oil and gas field. Santos’ remuneration structure rewards management for pursuing new oil and gas projects and production growth that are incompatible with a 1.5°C pathway. In 2022 Santos also awarded bonuses for ‘Landholder, Community and Traditional Owner Relationships,’ despite two Federal Court rulings against Santos for failing to adequately consult with Tiwi Islands Traditional Owners over its Barossa project,[1] as well as the long-standing Gomeroi Traditional Owner opposition to the Narrabri project. Santos’ board is not only overseeing a strategy and projects that undermine climate action and threaten cultural heritage, it is incentivising this activity with executive bonuses. Yet HESTA has actively approved of this remuneration structure and two directors responsible for the company’s climate and corporate governance failures. HESTA has demonstrated the first steps of an effective climate-related active ownership program by publicly identifying and prioritising some companies for targeted engagement. It has been good to see this supported in part by votes on the ‘capital protection’ shareholder resolution and against one director. However, given Santos is still planing many new oil and gas projects that are incompatible with a 1.5°C pathway and would see the company’s overall emissions increase 40% by 2030, HESTA must now: • Commit to divesting from Santos and any other company if it makes a final investment decision to develop a new oil and gas field • Publish time-bound engagement objectives for Santos (and other climate wreckers such as Woodside), including a date by which 1.5°C-aligned capital expenditure plans must be published • Report to members on progress towards these objectives • Outline the consequences for companies failing to meet these objectives and provide more detail on HESTA’s escalation framework • Divest from companies failing to meet engagement objectives. I expect that if Santos doesn’t comply with the resolution HESTA voted for – or HESTA’s demand of Santos in September last year[2] – then the fund will publicly divest from Santos. [1] https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/full/2022/2022fcafc0193 [2] https://www.hesta.com.au/about-us/media-centre/hesta-sets-stronger-2030-emissions-reduction-target-and-signals-heightened-monitoring-and-engagement-with-key-emissions-intensive-companies Sincerely,
Of course I want to get updates about this campaign from Market Forces!
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TOOK ACTION: Super – HESTA post-STO AGM email from members – April 2023
- TOOK ACTION: Super – HESTA post-STO AGM email from members – April 2023