Santos shareholders repudiate board’s climate direction in world first vote

At Santos Limited (ASX:STO)’s first online-only AGM today in Adelaide, shareholders voted in unprecedented numbers for two shareholder resolutions filed by the Australasian Centre for Corporate Responsibility (ACCR).

• 43.39% of shareholders (~62% excluding ENN & Hony shareholdings) voted FOR the shareholder resolution on Paris Goals & Targets
• 46.35% of shareholders (~66% excluding ENN & Hony shareholdings) voted FOR the shareholder resolution on Climate-Related Lobbying

Santos has two large Chinese shareholders, ENN Ecological Holdings and Hony Capital, that control ~30% of the shares on issue. Proxy advisers ACSI, Glass Lewis, ISS, PIRC (UK) and Regnan all recommended in favour of both shareholder resolutions.

The special resolution on which the ordinary resolutions were contingent was supported by 6% of shareholders.

Commenting on results of the Santos Annual General Meeting, Dan Gocher, Director of Climate and Environment, ACCR, said:

“This level of support across institutional investors for an NGO-filed shareholder resolution is unprecedented, and this level of support for a resolution calling explicitly for targets on Scope 3 emissions (those from products sold) is a world first.”

“These results show how much of a laggard Santos is on climate change. This is further evidence that institutional investors have woken up to the damage a growing gas industry is wreaking on the planet.”

“The onus is now on institutional investors to ensure that their vote is not ignored. Santos should immediately move to implement the review and disclosure measures recommended in the two resolutions.”

“A vast number of Santos shareholders do not agree with the company’s plans to increase gas production by 60% by 2025. Santos’ peers, including BP, BHP, Royal Dutch Shell and Total have committed to set targets for their Scope 3 emissions. Chairman Keith Spence today confirmed that Santos has “no intention” of setting targets for Scope 3 emissions— this is an untenable position for the chairman to maintain given the clear signal sent by his shareholders.”

“Santos has consistently refused to acknowledge the role of its industry associations in obstructing effective climate policy. This vote is a stinging rebuke of APPEA’s dogged undermining of climate policy in Australia.”

“Today, Chairman Keith Spence attempted to put a positive spin on CEO Kevin Gallagher’s recent trip to Canberra where he attended a cocktail party hosted by coal advocates Craig Kelly and Joel Fitzgibbon. Investors have now said loud and clear that Santos needs to do more to ensure alignment of its policy advocacy with goals of the Paris Agreement.”