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Australia’s largest oil and gas developer has launched a staunch defence of its climate plan ahead of a potentially damaging vote on the issue at its annual meeting next week.
Woodside has been in the crosshairs of environmental activists as well as some shareholders who have pledged to oppose its strategy, arguing for more transparent and binding measures to be adopted. Richard Goyder, chair of the $35bn energy group, has also been a target of criticism by some investors.
The vote — the second time that Woodside has put its climate plan to shareholders — could prove a test for energy companies that need to meet net-zero commitments and the level of investor support they can expect.
Meg O’Neill, Woodside chief executive, told the Financial Times on Friday that it had discussed with shareholders its plans to navigate the energy transition over the past two years. The company faced a large protest vote against its previous climate plan in 2022 and opposition to the re-election of senior directors at last year’s annual meeting in Perth.
“It is a robust and honest plan that reflects that challenge and its complexity,” O’Neill said. “The level of transparency is unprecedented.” She noted that only a handful of companies have put climate plans to such votes.
Woodside has set a date of 2050 to achieve net zero emissions but has framed that as an aspirational target rather than a binding commitment. Other targets include spending $5bn on alternative energy initiatives including hydrogen and carbon capture and storage by 2030, as part of a plan to reduce carbon emissions by its operations and customers.
Shareholder activist groups, proxy advisers and some investors including Australia’s Hesta pension fund have criticised the company for not going far enough in setting binding targets.
Legal & General, the British asset manager that is a top-20 shareholder in Woodside, joined the opposition this week when it said it would vote against the climate plan and Goyder’s re-election on the basis that the company had not set stringent targets for disclosure of climate-related risk or the level of investment it would need to make the transition to net zero.
Goyder wrote to shareholders this week to urge them to back the climate plan and said that calls to “drastically change Woodside’s strategy and investment priorities risk eroding value for all shareholders and contributing to a disorderly energy transition”.
The vote next week will be non-binding but could force Woodside to review its plan to reflect the concerns of dissenting shareholders.
O’Neill said that energy companies would need to start showing regular progress on the path towards net zero to win over critics. “Delivery is important,” she said.
She added that Russia’s invasion of Ukraine, while delivering a huge boost to the liquefied natural gas market that drove record profits for the Australian company, has also stalled momentum for the development of new energy sources such as green hydrogen.
“I have great conviction that the market will grow out, but it will take time,” she said.
Woodside said on Friday that its first-quarter revenue dropped more than 30 per cent to less than $3bn, from $4.3bn in the same period last year, reflecting the decline in LNG prices and production downtime at some of its sites. The revenue drop, which was 12 per cent compared with the previous quarter, was sharper than analysts had forecast.
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