(Bloomberg) — Major investors are opposing Woodside Energy Group Ltd.’s climate plans and the chairman’s reelection, raising questions about the strategy of Australia’s largest energy company as it rushes to expand oil and natural gas output.
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Funds including the California State Teachers’ Retirement System and Australia’s Aware Super both voted against Richard Goyder’s reappointment and rejected proposals for emissions reduction before an annual meeting on Wednesday. Other shareholders backed directors but rejected the green plans.
Woodside’s climate strategy has been criticized as too slow or unclear, and some investors have raised objections to Goyder’s handling of engagement on the issue. Climate activists also oppose Woodside’s push to advance a $24 billion slate of expansion projects, including the flagship Scarborough liquefied natural gas development in Western Australia.
“We still have some ongoing concerns about Woodside’s plan to be net zero by 2050,” Shaun Manuell, head of Australian equities at AustralianSuper, the country’s largest pension fund and a holder of more than 3% of the producer, told a Parliamentary hearing Monday. “Based on that we’ve decided to vote against it and we’ll continue our discussions with the company.”
The outcome of a ballot on the climate plan is non-binding, though Woodside insists that it responds to investor feedback when developing its policies. Final results were scheduled to be lodged with the Australian Securities Exchange later Wednesday.
Goyder, who will step down later this year as Qantas Airways Ltd. chairman after investor and customer unrest, told the Woodside event he had carried out more than 80 meetings on climate change since the start of last year.
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“All plans and ideas are improved when they are subject to scrutiny and constructive feedback, and this has been the case for Woodside over the past 12 months,” he told the annual meeting. Goyder confirmed he intended to remain in his post and had “never been more energized and excited.”
Woodside is targeting a 15% reduction to its net equity Scope 1 and 2 greenhouse gas emissions by 2025 and 30% by 2030, it said in a presentation in February. The measure reflects the company’s share of jointly owned operations, includes the use of offsets and is relative to an annual average over 2016 to 2020.
The company also aims to take investment decisions by 2030 on projects able to lower Scope 3 emissions by 5 million tons a year. That pollution — mainly from the burning of the fossil fuels it sells — is by far its biggest source of carbon dioxide emissions, at about 72.8 million tons in 2023, according to the company.
“Woodside’s net zero target is 500 words long and it’s incomprehensible,” Polly Hemming, director of the climate and energy program at the Australia Institute, a think tank that opposes new fossil fuel developments, told the Parliamentary hearing. “It’s like ChatGPT wrote it.”
The producer expects gas demand to rise 50% over the next decade, propelled by rising consumption in Asia. That bullish outlook helped spur Woodside’s recent failed attempt to merge with smaller rival Santos Ltd. in a tie-up that would’ve created one of the Asia-Pacific region’s biggest LNG producers.
(Updates with Goyder comment to AGM in seventh paragraph.)
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