New tone, same climate plan: spotlight must be on Woodside chair

The Australasian Centre for Corporate Responsibility​ (ACCR) is commenting on the release today of Woodside Energy Group’s annual results and 2023 Climate Transition Action Plan (CTAP).

The climate plan will be put to a vote of shareholders at the company’s upcoming annual general meeting and Chair, Richard Goyder, who holds ultimate responsibility for climate governance at Woodside, is also facing re-election.

Investors have consistently told Woodside that its climate plan isn’t up to scratch - inflicting the world’s largest vote of 49% against a company climate plan in 2022 and a record-breaking vote of 35% against incumbent director Ian Macfarlane at last year’s AGM. The primary elements of concern that investors have held regarding Woodside’s climate strategy and governance over the last four years are:

• Woodside is continuing to allocate the majority of its capital to developing new oil and gas projects
• Woodside’s scope 1 and 2 decarbonisation targets are not Paris-aligned
• Woodside has not set a scope 3 target, even though scope 3 emissions comprise more than 90% of company emissions
• offsets dominate Woodside’s scope 1 decarbonisation strategy
• the company has been persistently unresponsive to the above concerns.

Commenting on the results and the 2023 Climate Transition Action Plan, Alex Hillman, Lead Analyst at the Australasian Centre for Corporate Responsibility, said:

"With energy markets settling after the highs of the Ukraine war, Woodside's 2023 profit is 74% lower than 2022 whilst its full year dividend has also fallen by 45%.

“Unsurprisingly given the groundswell of persistent investor concern over the last four years, Woodside has today come to the table saying it is listening and responding to shareholders on climate risk management. However, the small tweaks and change of tone are not what matters, it is the core substance of the company’s strategy that investors care about.

“Whilst a tone of self preservation appears to have kicked in, the Woodside board has still failed to bring anything of substance to the table.

“It is hard to see how Chair Richard Goyder will appease frustrated investors with this climate plan, a high risk choice for a chair facing re-election at the 2024 AGM.

“Investors will see that nothing in today’s report changes the fact that 88% of Woodside’s greenfield capex will be allocated to oil and gas expansion and that, as yet, Woodside has not sanctioned a significant new energy project.

“Woodside expects its scope 1 emissions to increase to 2030 and despite a lot of talk about costly and uncertain abatement technologies, it is clear that offsets remain central to meeting its scope 1 target.

“Offsets are not a decarbonisation strategy.

“Woodside’s new abatement target of 5 MtCO2e pa is just 7% of its 2023 scope 3 emissions. And whilst it’s progressing 475 million tonnes of new scope 3 emissions from Browse, Sunrise and Calypso, it’s hard to take anything Woodside says about managing scope 3 emissions seriously.

“Woodside openly acknowledged at the 2023 Investor Briefing Day that its offsets portfolio and nascent CCS projects are tools to support growth. This is not about scope 3 emissions reduction, it is about facilitating scope 3 emissions production.

“As CEO Meg O’Neill has stated, Woodside’s climate strategy is its company strategy, “we don’t have two separate strategies”. And today we see no changes to Woodside’s company strategy.

“A key question is whether Woodside’s carbon intensive strategy will even drive value for shareholders. ACCR analysis has concluded that Woodside's oil and gas growth opportunities deliver less value than a share buyback would.