Status quo inconceivable: majority of investors reject Woodside’s climate strategy

The Australasian Centre for Corporate Responsibility​ (ACCR) is commenting on the results of the Woodside Energy Group (WDS) Annual General Meeting (AGM), at which:

• 58.4% of shareholders voted against the company’s Climate Transition Action and 2023 Progress Report
• 16.61% of shareholders voted against the re-election of Chairman Richard Goyder

ACCR filed a members’ statement against the re-election of Richard Goyder because, under his leadership, the Woodside board has been persistently unresponsive to shareholder concerns on climate risk management over the last four years and is pursuing a growth strategy that is not in shareholders’ interests.

Commenting on the results, Harriet Kater, Head of Impact, ACCR, said:

“It is inconceivable for Richard Goyder’s board to continue its trend of dismissing shareholder concerns following this overwhelming rejection of Woodside’s climate plan.

“The board must now act on investor feedback and begin the long overdue work of credibly de-risking its business.

“The scale of this rejection is globally unprecedented. With 58.4% of investors voting against, this is the least-supported climate plan ever. The fact that the previous record of 49% was also held by Woodside speaks to this board’s persistent unresponsiveness.

“There was a global groundswell of public dissent against Woodside’s climate plan ahead of today’s AGM. It was rejected by all major proxy advisory firms, at least three major Australian superannuation funds, some of the United States’ biggest pension funds, Norway’s largest private pension fund, and Britain’s biggest asset manager.

“For Richard Goyder to keep his job while a solid majority of Woodside’s register has rejected a strategy he is responsible for is an inconsistency in today’s results. However, the 16.6% vote against his re-election is material and is by far the largest vote on record against a Woodside Chair, with no chair over the past 20 years receiving a vote against higher than 1.6%.

“Mr Goyder would be naive to presume that he can continue his final term with a business as usual approach.

“This overwhelming rejection of Woodside’s climate plan is in effect a rejection of the company’s strategy. It is impossible to divorce the two - indeed CEO Meg O’Neill has explicitly said that Woodside’s company and climate strategy are one and the same. Woodside cannot deliver a credible transition plan without addressing its flawed company strategy.

“For Woodside’s board to maintain that the only path to shareholder value is persevering with low value, high risk oil and gas projects suggests a lack of skills, poor judgement and risky group-think.

“The board has alternative options. ACCR research shows Woodside’s portfolio of unsanctioned oil and gas projects does not appear to be a material source of value for shareholders. On the other hand, a capital return strategy would generate more value, with less risk and lower emissions.

“The most material strategic decisions in front of the Woodside board right now are whether to progress with its portfolio of growth projects that are yet to pass final investment decision, including Browse, Sunrise and Calypso.

“It’s time for Woodside’s board to remove its blinkers and have an honest conversation about which growth projects in its portfolio don’t make sense.

“It would surprise us if Goyder did not move quickly to appoint new directors. Any directors presented by Goyder should rightly be scrutinised for their ability to bring fresh thinking and to develop and consider strategies outside the board’s existing fossil fuels growth capability.

“This is the inflection point, the moment for change. It would be belligerent for Woodside to front up to shareholders next year with the same old approach.”

Background

At Woodside’s 2023 Investor Briefing Day Meg O’Neill stated - see p 2 transcript:

“It is also important to note that our Company strategy is a climate strategy, we don’t have two separate strategies”

Proxy advisors against the climate plan

• Institutional Shareholder Services (ISS)
• CGI Glass Lewis
• The Australian Council of Superannuation Investors (ACSI)

Proxy advisors against the re-election of Richard Goyder

• CGI Glass Lewis

Pre-declares against Climate Plan

• Allianz Global Investors
• AustralianSuper
• Aware Super
• CalSTRS
• Florida State Board of Administration
• HESTA
• KLP
• Legal and General Investment Management (LGIM)
• Anima Sgr

Pre-declares against Goyder

• Allianz Global Investors
• Aware Super
• CalPERS
• CalSTRS
• Florida State Board of Administration
• Legal and General Investment Management (LGIM)