Santos shareholders revolt on climate, rubber-stamp lobbying

The Australasian Centre for Corporate Responsibility​ (ACCR) is commenting on the results of the Santos (ASX:STO) annual general meeting today.

25.32% of shareholders voted against Santos’ remuneration report, amounting to a first strike.

36.93% of shareholders voted against Santos’ climate plan.

14.58% of shareholders supported ACCR’s resolution on climate-related lobbying.

15.63% of shareholders supported ACCR’s resolution on decommissioning.

Dan Gocher, Director of Climate & Environment at the Australasian Centre for Corporate Responsibility (ACCR) said:

On the climate-related lobbying resolution:

“Santos shareholders have revolted against the board’s climate plans while rubber-stamping the company’s lobbying activities.

“Investors have effectively sanctioned Australia’s ‘gas-fired recovery’, and the associated emissions that will come from the development of multiple new gas basins.

“Santos and its industry associations continue to advocate for a massive expansion in the oil and gas industry.

“The International Energy Agency (IEA) concluded that we cannot afford to develop any new coal, gas or oil projects if we are to limit global warming to 1.5°C.

“The Australian Petroleum Production and Exploration Association (APPEA) has repeatedly lobbied for policies to incentivise $350 billion investment in new oil and gas projects over the next 20 years, including in a pre-budget submission earlier this year.

“Santos shareholders have failed to connect the company’s advocacy for oil and gas expansion with escalating, climate-induced disasters across Australia and the world.

“We have little hope of ambitious climate policy while the oil and gas industry continues to stand in the way.

On the decommissioning resolution:

“Santos shareholders failed to support a simple request for improved transparency of Santos’ decommissioning liabilities at a time when a significant number of the company’s assets are at or nearing end of life.

“Santos claims that enhanced decommissioning disclosure would require the release of commercially sensitive information, but  its peers Woodside and Esso have demonstrated this is not the case. Its resistance to transparency around this material risk is concerning.

“Under provisioning is a real risk that improved disclosure can help manage. Peer reviewed research on decommissioning provisions in the North Sea found that actual spend was on average 76% higher than estimated.

“The repurposing of end of life assets for offshore wind or CCS is not guaranteed to be feasible. Investors need to be updated on the outcome of feasibility studies in a timely manner due to the direct impact this has on decommissioning liabilities.”

Background

ACCR cannot comment on the vote on Santos’ climate plan, due to ongoing proceedings in the Federal Court. Further information on the case is available here.

ACCR’s briefing on the two resolutions is available here.