Major investors leading push against Woodside’s climate plans ahead of AGM

Woodside Energy is facing the prospect of an overwhelming protest vote against its climate plans when shareholders meet on Wednesday, as global investors pick apart the emissions strategy of Australia’s biggest oil and gas company.

Norway’s largest pension fund, KLP, and Britain’s biggest asset manager, LGIM, are the latest investors to disclose they will vote against Woodside’s climate report, citing concerns over its carbon transition plans.

Critics have described Woodside’s strategy as overly reliant on offsets and not aligned with Paris climate agreements, even after it revamped its policies before this year’s annual general meeting.

The energy producer has also been criticised for pursuing plans to develop new fields, representing an expansion in fossil fuel production at a time opponents say the sector must rein in emissions.

“There is no way to achieve the climate objectives of the Paris agreement without a drastic decline in the burning of oil and gas,” KLP said.

“For most oil and gas companies this will mean reducing production over time, ideally replaced by renewable energy.”

Woodside’s climate report will be put to a non-binding vote. It’s the first time investors will be able to directly respond to its plans since delivering a robust 49% protest vote against its policy two years ago.

That remains the highest protest vote recorded against the dozens of listed companies around the world that regularly put climate-related resolutions to shareholders.

While non-binding votes don’t automatically trigger a policy change, they are a way for shareholders to express their disapproval, placing pressure on directors to change direction.

Analysis by the climate activist group Market Forces shows that four of the top 10 largest protest votes against climate policies have been lodged against Australian companies, headed by Woodside (49% against), Santos (37%), AGL (31%) and APA Group (21%).

Energy and resources companies, especially in Europe, make up the majority of those with climate reports subject to shareholder input.

“Woodside has failed to respond adequately to world-record shareholder backlash on non-binding climate votes, doubling down on climate-wrecking gas growth plans,” said Will van de Pol, the chief executive of Market Forces.

“Another massive vote against Woodside’s climate plan is meaningless unless investors escalate pressure through their binding votes on directors and deliver a strike against Woodside’s growth-focused remuneration scheme.”

Market Forces and some large investors oppose the re-election of Woodside chairman Richard Goyder and the company’s renumeration plans as part of their broader protest against Woodside’s climate plans.

The push against Woodside’s climate report looks significant but according to an analysis of voting intentions disclosed by major investors the move against Goyder appears more muted, with some major investors including superannuation fund Hesta expressing support for the chairman.

A Woodside spokesperson said Goyder and his leadership team had held numerous “direct engagements” with shareholders on climate strategy and governance, and listened carefully to investors.

“The Woodside board believes Mr Goyder is a highly capable and effective leader, and continues to provide valuable insight, stewardship and strength to the board and its deliberations generally as a result of his extensive business career and board experience,” the spokesperson said.

Goyder is one of the most high profile directors in Australia, and is the outgoing chair at Qantas.

Woodside told shareholders it had held more than 130 investor meetings in 2024 at which climate matters were discussed.

The Woodside chief executive, Meg O’Neill, has consistently said that Australia needs new gas developments to protect against an energy shock and to be used as an alternative to coal for electricity generation.

“In response to investor feedback Woodside committed to put its climate disclosures to a vote of shareholders at this year’s AGM,” the company said.

“Such a vote is not required by law or a feature of common market practice, but is something that our investors specifically asked for and we have met this commitment.”

Prominent governance group and proxy adviser CGI Glass Lewis said that while there had been an “evident shift in tone” demonstrated by Woodside to shareholder concerns, its climate plans still fall short of expectations.

It has urged shareholders to vote down the report and vote against Goyder’s re-election.

“While Woodside has shown some progress in its most recent climate plan by providing disclosure regarding the extent of its shareholder engagement, it still falls short of expectations,” CGI Glass Lewis said.

The Australasian Centre for Corporate Responsibility (ACCR), a shareholder advocacy group, said Woodside’s climate policy replicated many of the problems of the past, such as adopting a plan based on expanding oil and gas projects and relying on offsets rather than genuine emission reductions.

The ACCR executive director, Brynn O’Brien, said Goyder was facing the prospect of a shareholder revolt over his board’s “chronic unresponsiveness” to investor concerns in how the company manages climate risk.

“It is a world first for an incumbent chair of a major oil and gas company to face the threat of being held personally accountable for company climate failings,” O’Brien said.