Woodside, activist investors prepare for hotly contested climate battle at AGM

He won re-election in 2021 with a 99.2% margin. Two of Australia's largest pension funds said on Monday they would vote against the plan because of doubts about how the company could hit its net zero target, with one highlighting the absence of target for cutting the emissions produced when customers use its products, also known as Scope 3.

Activists are confident they will land serious, if symbolic, blows against Woodside Energy and its current climate strategy as a growing number of major investors signal they will reject the company's climate plan at a shareholder vote on Wednesday.

Usually perfunctory exercises, Woodside's annual general meeting in Perth is expected to see a bitter fight between activists and Australia's largest energy producer, which is presenting its climate transition plan for an advisory vote. Opponents say the plan is unambitious and too similar to one which nearly 49% of investors voted against in 2022. A campaign against it has won support from major pension funds in the U.S., Norway and Australia along with proxy advisor Glass Lewis.

Activists hold Chair Richard Goyder responsible for the plan and want investors to block his re-election, although this proposal has attracted less support. "It's extremely clear that a huge proportion of shareholders are going to reject its inadequate climate plans but it does seem that too many investors are willing to let leadership off the hook," according to Will van de Pol, CEO of activist group Market Forces.

Votes against the plan could be close to 60%, while those cast against Goyder could total around 15% to 20%, according to a source close to investors who spoke on condition of anonymity. While the vote on the plan is not binding and Woodside is free to ignore the results, it would be seen as a rebuke. Any sizable move against Goyder would be similarly significant given directors are usually elected nearly unanimously. He won re-election in 2021 with a 99.2% margin.

Two of Australia's largest pension funds said on Monday they would vote against the plan because of doubts about how the company could hit its net zero target, with one highlighting the absence of target for cutting the emissions produced when customers use its products, also known as Scope 3. Activists want Woodside to shelve major new oil and gas projects and oppose its reliance on carbon credits to help meet its targets. Woodside has a $20 billion plus portfolio of new projects in various stages of development and has a target of net zero by 2050 for Scope 1 and 2 emissions, which refer to those produced directly or indirectly by operations.

In a recent letter to shareholders, Goyder said Woodside has been addressing the concerns investors have over its climate plans but the company must transition its business in an orderly fashion to protect shareholder value.

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