15 April 2021
Woodside’s AGM in Perth today saw almost a fifth of the gas giant’s shareholders tell the company to wind up gas and oil production in line with the Paris climate goals.
This was the second time in less than 12 hours that a significant proportion of investors had defied companies’ plans to ramp up gas production, with the 19% vote at Woodside following a 13% vote for a similar resolution at Santos earlier in the day.
Speaking after the Woodside and Santos AGMs, Market Forces Asset Management Campaigner Will van de Pol said:
“Today’s record level of support for resolutions calling for the wind up of fossil fuel production demonstrates considerable investor opposition to Woodside and Santos’ growth plans, which are in direct contradiction to the declines in these sectors that must occur in order to meet the Paris climate goals.“
“However, the majority of big investors who last year supported calls for Paris-aligned scope 3 emission reduction targets and capital expenditure plans have failed to recognise that these actions would require Woodside and Santos to manage down oil and gas production.“
“Santos and Woodside’s massive oil and gas expansion plans are a bet on the failure of the Paris Agreement, with shareholders’ capital, employees’ livelihoods, and environmental remediation at stake.”
“With today’s votes roughly doubling the previous record set for a fossil fuel wind up resolution, all coal, oil and gas producers must take note: investors are increasingly willing to demand the drastic and rapid action required to align with global climate goals.”
One fifth of @WoodsideEnergy’s shareholders have reached the point where they’re telling the board: it’s time to manage down those oil and gas assets and start handing back the cash pic.twitter.com/Qk8837LOaw— Market Forces (@market_forces) April 15, 2021
Failing to meet investor demands
Last year 50% of shareholders voted in favour of an ACCR-coordinated resolution calling on Woodside to disclose emission reduction targets and capital expenditure plans aligned with the Paris climate goals.
But the company’s current 2025 and 2030 emissions targets are consistent with around 3°C of global warming, and, by excluding scope 3 emissions (those generated when customers burn oil and gas sold by Woodside), only address 10% of its total carbon footprint.
On capital expenditure side, the company aiming to spend over US$21 billion to increase production by 6% each year to 2028, when climate science tells us gas production must fall 3% annually over that period if we are to meet the Paris goals.
When challenged over the company’s “failure to come anywhere near meeting the demands made by more than 50% of shareholders last year,” Mr Goyder confirmed one shareholder had informed the company it would be voting against a director over these shortcomings.
Along with the considerable support for the oil and gas wind up resolutions, this vote against a director demonstrates investors are increasingly becoming fed up with Woodside’s climate failures.
In its most recent (2019) mid-term production guidance, Woodside presented plans to increase production to 70% above 2019 levels by 2028, a compound annual growth rate of over 6%. Woodside’s planned rate of production growth is triple that forecast under the Production Gap report’s business as usual scenario.
Woodside’s latest investor presentation forecasts LNG demand to grow by over 4% each year to 2035,
exceeding the International Energy Agency’s 2.7°C STEPS. By 2035 Woodside expects LNG demand to
be 14% higher than the STEPS demand by 2035 and 40% higher than the SDS demand forecast.
Market Forces Executive Director Julien Vincent asked Woodside’s board to explain the discrepancy between its stated support for the Paris goals and its use of LNG demand forecasts consistent with the failure of Paris, but Chair Richard Goyder failed to admit the clear contradiction.
Pursuing Australia’s most polluting project
Woodside is planning new LNG development projects worth more than US$36 billion, including
Scarborough & Pluto-2 LNG expansion (US$11.4 billion) and Browse (US$20.5 billion) and Sangomar
Phase 1 (US$4.2 billion).
Collectively known as the Burrup Hub, Woodside’s Scarborough, Pluto and Browse expansion projects “would be Australia’s most polluting fossil fuel project ever to be developed, with a total lifetime carbon footprint of over 6 billion tonnes of CO2 , equivalent to running 35 coal power stations every year until 2070”.
Many questions at the AGM raised the significant the financial risks, and major climate, environmental and Aboriginal cultural heritage concerns related to this destructive mega project.
A large group of community members also gathered ahead of the AGM to protest Woodside’s destructive impacts, calling on the company to drop its massive Scarborough gas plans. The action shows it is not just shareholder capital that is being put at risk by Woodside’s massive gas expansion plans.