Activists have heralded a “breakthrough moment” in the push for the Australian gas industry to do more on the climate crisis after more than 50% of shareholders called on Woodside Petroleum to set science-based greenhouse gas targets.
Slightly more than half of the company’s investors who gave a view supported a motion that it set targets in line with the goals of the Paris climate agreement to cut both its own emissions and the “scope 3” emissions released by consumers of its products, many of them in Asia.
The motion also called on Woodside to release details of how its planned new multibillion-dollar gas investments, which have stalled until next year due to the Covid-19 pandemic, would align with the Paris goals of limiting warming to well below 2C, and whether its remuneration policy encouraged executives to ensure emissions targets were met.
Activists said it was the first time a climate resolution had received more than 5o% support in a vote by Australian fossil fuel company shareholders.
Woodside is Australia’s largest oil and gas company. The vote follows 43% support for a similar motion among shareholders of the country’s second biggest oil and gas company, Santos, earlier this month.
Neither vote was binding – the motions were not formally put after earlier votes to change the companies’ constitutions to allow advisory resolutions failed – but the strength of support for greater climate action among shareholders surprised even activists.
Dan Gocher, from shareholder activist group the Australasian Centre for Corporate Responsibility, said the support for its motion from 50.2% of Woodside shareholders was striking 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 align with the goals of the Paris agreement, the company will be in open conflict with the majority of its shareholders. This is an untenable position for the company.”
A second resolution calling on Woodside to review its links to groups that lobby on behalf of fossil fuel companies, such as the Australian Petroleum Production and Exploration Association, received 42.7% support from voting shareholders. Both motions were supported by several large proxy advisers, including ACSI, Glass Lewis, ISS, PIRC and Regnan.
Woodside’s chief executive, Peter Coleman, said the company acknowledged investor and community interest in “the challenge of climate change”. The company says it aims to reach net zero emissions for its own operations by 2050 but argues gas, as a fossil fuel that releases less when burned than coal, is a solution to global heating.
“We’ll continue this conversation as our business plays its role in supplying reliable energy while supporting progress towards a lower carbon world,” Coleman told the meeting, which was held online due to the coronavirus pandemic.
Coleman and Woodside’s chairman, Richard Goyder, were asked if the company had evidence to support its claim its gas was reducing global emissions by displacing coal use in Asia. Coleman said the company did not collect that information from customers, and pointed to a study that compared the life-cycle emissions from different forms of energy.
Emma Herd, the chief executive of the Investor Group on Climate Change, said Australian oil and gas companies were clearly at risk of falling behind their European counterparts, such as BP and Royal Dutch Shell, in planning to diversify their business and set robust targets in line with the Paris agreement.
“Investors expect the companies they invest in to address their contribution to rising global emissions,” she said. “It is incumbent now on Woodside to work constructively with the investors to develop real plans to transition to a net zero emissions company by 2050.”