POLICY

Santos, Woodside face climate resolutions again

SANTOS and Woodside Petroleum have been handed fresh shareholder resolutions from activist investor groups which are continuing their campaigns to convince shareholders the two companies’ oil and gas projects are incompatible with halting runaway climate change.

 More AGM showdowns ahead

More AGM showdowns ahead

Market Forces and the Australasian Centre for Corporate Responsibility filed separate resolutions. 

ACCR is demanding more transparency on decommissioning and an end to pro-oil and gas lobbying, while Market Forces is urging shareholders to demand the companies' reveal how their emissions reduction plans align with the Paris Agreement and keeping global temperatures below 1.5C. 

This includes production guidance plans for the lifetime of oil and gas assets, capital expenditure plans for decommissioning and rehabilitating asset sites and how employees of the company will be informed of asset closures and employee transition plans. 

At last year's AGM, similar resolutions received support from 19% of Woodside's shareholders and 13% of Santos'. 

Santos informed the market of the resolution late yesterday, noting that the company will release its annual climate change report, consistent with the guidelines of the Financial Stability Board's Task Force for Climate-related Financial Disclosures. 

The report will outline the company's climate transition plan and demonstrate capital alignment with the Paris agreement, Santos said. 

Woodside has yet to disclose its own resolutions to the market. 

Santos and Woodside have committed to net zero emissions by 2040 and 2050 respectively, however neither commitments cover scope 3 emissions, the largest portion of their carbon footprints. 

Woodside has committed to A$7 billion in new energy investment between now and 2030 including on several hydrogen and renewables projects, while relying on offsets and carbon markets to neutralise emissions it can't abate. 

Santos meanwhile has gone down the route of CCS, committing to the Moomba project in South Australia which it claims could eventually store some 100 million tonnes of CO2. It has also claimed that its recently sanctioned Barossa project will be able to include a CCS element to it.

Market Forces argue these ventures are inadequate to counter the sheer amount of emissions from the companies' core oil and gas businesses and their respective mergers, along with newly sanctioned projects, are incompatible with the International Energy Agency's Net Zero scenario which calls for no new oil and gas developments. 

"Woodside and Santos' expansion plans threaten to waste billions in investor capital on projects that would be stranded by the low-carbon transition that's already underway," Market Forces asset management campaigner Will van de Pol said. 

ACCR meanwhile argued that investors must demand greater transparency on when infrastructure will reach end of life and the major assumptions driving estimated provisions. 

"Decommissioning has been described as a "time bomb" for the Australian oil and gas industry by leading analysts," ACCR climate director Dan Gocher said. 

"Peer reviewed research on decommissioning provisions in the North Sea found that actual spend was on average 76% higher than estimated." 

Market Forces, ACCR and similar groups have gained a certain level of notoriety at company AGMs as campaigners pepper management with questions about their decarbonisation plans, or they claim lack thereof. 

At last year's Woodside AGM company chairman Richard Goyder finally lost his cool at Market Forces campaigner Julian Vincent.

 "You've dominated this shareholder meeting and you had the opportunity to put through your resolution to shareholders - which frankly in my view shouldn't be allowed at 0.01% but that's a matter for ASIC and the treasurer to deal with in due course," Goyder said.

"So I don't think we're now going to have a speech because you've had plenty of opportunity to raise the issues you want to raise."

Asked by Energy News whether the group is afraid of becoming stigmatised for hogging the limelight, Van der Pol was adamant that they were simply reflecting genuine community concerns. 

"If companies are afraid of that level of scrutiny and accountability they're facing at AGMs then perhaps they need to consider the negative environmental climate and social impacts that are bringing on those increased concerns," he said. 

Van der Pol also flagged potentially targeting voting in replacement directors, similar to the recent successes Engine No1 had with ExxonMobil's board last year. 

In a follow up announcement to market this morning Santos argued that the recent energy crunch experienced in the Northern Hemisphere demonstrated that new investment in oil and gas was sorely needed and driving investment into less-transparent companies would be a detriment to the energy transition. 

"New supply investment is essential to provide energy security and affordability for customers as the world moves into a low-carbon future," it said. 

Santos will announce the date of its AGM next month. Woodside has yet to set a date for its own. 

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