Coordinated by environmental finance group Market Forces, shareholders in Origin Energy have filed a series of resolutions with the oil and gas major.
The three resolutions, to be heard at Origin’s October AGM, call for greater disclosure of climate risks, the development of a transition plan, and improved measurement and reporting of fugitive methane emissions.
To date, the company has failed to disclose scenario analysis, and metrics and targets that would allow investors to assess Origin’s resilience in a low carbon economy. Origin’s emissions continue to rise as APLNG reached full production this year, while their reported fugitive emissions are simply estimates rather than actual measurements.
“Origin is Australia’s fourth largest carbon polluter in Australia and a light coating of greenwash does nothing to hide the fact it has no transition plan,” said Market Forces Analyst Daniel Gocher. “After consecutive years of write-downs, shareholders are demanding greater transparency and a serious assessment of climate risk.”
During 2017, Origin has announced two write-downs totalling $1.815 million on its 37.5 per cent stake in the Australia Pacific LNG (APLNG) project.
“Origin’s multi-billion dollar write-downs on the APLNG project have been driven by its heroically optimistic oil price forecasts,” said Gocher. “Remarkably, due to a lack of disclosure, shareholders are still unable to access the company’s assumptions which have been the basis of massive value destruction.”
Overly optimistic oil price projections have plagued all three Queensland LNG projects, as both Santos and Shell-owned QGC have also booked similar write-downs.
“Climate risk adds another level of complexity to an oil market that Origin is clearly struggling to analyse and forecast. Saying ‘just trust us, we’ve got this’ no longer cuts the mustard.”
- The first resolution requests Origin implement the final recommendations of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD), which were published in June. To date, the company has failed to disclose scenario analysis, and metrics and targets that would allow investors to assess Origin’s resilience on a 2C pathway.
- The second resolution asks Origin to publish a transition plan with emissions reduction targets that would take the company to 95 per cent clean energy generation by 2050. To date, Origin has only committed to build or contract up to 1,868MW of renewable capacity by June 2020. Meanwhile, emissions from APLNG continued to rise as it reached full production this year.
- The third resolution seeks to address fugitive methane emissions, both throughout the lifecycle of gas production, and migratory landscape emissions like those seen in the Condamine River. Due to the global warming potential of methane, gas ceases to be cleaner than coal once fugitive methane emissions surpass 3.2 per cent of production – this threshold is even lower for LNG exporters like Origin. Despite claiming that its fugitive methane emissions were down in FY2016, the coal seam gas industry has long underreported these emissions due to outdated metrics borrowed from the US, and minimal studies of actual emissions.
These resolutions seek to bring Origin’s disclosure of climate risk in line with its own public pledges, and follow on from resolutions lodged with its peers Oil Search and Santos earlier this year. Both companies ultimately committed to review and/or implement the TCFD recommendations by the time they report in 2018.
Investors around the world have become increasingly more activist in recent years, particularly in the United States where for the first time at ExxonMobil this year, a resolution on climate risk disclosure was passed despite board opposition.
The resolutions and supporting statements can be viewed at www.marketforces.org.au/2017originresolutions