Woodside Energy insists climate plan is meaningful as shareholder pressure grows

In a bid to placate shareholder anxiety, Woodside will demonstrate its commitment to reducing emissions ahead of a critical AGM vote.

Woodside is taking meaningful action to reduce emissions despite embarking on expansion plans to meet soaring global demand, the company’s chief executive Meg O’Neill has insisted, as the oil and gas giant moves to temper concern among shareholders ahead of a critical meetings of investors.

The WA-headquartered company has positioned itself to meet a rapid increase in LNG demand through new developments and potential acquisitions, a plan which has placed it in the crosshairs of environmentalists, worrying shareholders.

In a bid to placate concern, Woodside earlier this month released a revised climate action plan — including a Scope 3 emissions target for the first time — which Ms O’Neill on Tuesday pointed to as she sought to win shareholder support while addressing investors ahead of a critical annual general meeting.

Woodside will next month hold its 2024 annual general meeting where shareholders will vote on the company’s climate transition action plan (CTAP) and the re-election of chairman Richard Goyder and several directors.

The votes shape as a de facto proxy test of investor support for Ms O’Neill’s strategy, which she insists strikes the right balance between shareholder returns and emission reduction efforts.

“It is the tightrope that we are walking and the balance that we’re trying to strike,” Ms O’Neill said.

Woodside boss Meg O’Neill says the makeup of the board has changed significantly in the past 18 months. Picture: Naomi Jellicoe

“We are striking a balance of making sure that we are doing the three things we’ve said we’ll do, which is to produce energy products for customers now and into the future to create and return value to shareholders, and to operate our business sustainably.”

Woodside was last year hit with a record 48.97 per cent shareholder vote against its climate report, and Mr Goyder emerged as a target for climate-conscious investors, who insist the company must take more aggressive action to curtail emissions.

Ms O’Neill said Woodside is on track to cut its Scope 1 and 2 greenhouse gas emissions by 15 per cent by 2025 and 30 per cent by 2030, while it maintains an “aspiration” of net zero by 2050 or sooner.

In February, Woodside said its commitment to spend US$5bn on new energy projects would be guided by a pledge to reduce carbon dioxide emissions by 5 million tonnes.

But, opponents have widely condemned the proposal as insufficient, highlighting slow progress on new clean energy projects.

Ms O’Neill said Woodside is continuing to progress its signature renewable energy project, a US-based hydrogen plant, dubbed H20K

Woodside last year delayed a final decision on whether to proceed with the project, but Ms O’Neill said she was cautiously optimistic of a resolution this year, though it would be dependent on US officials tweaking the rules around qualifying for financial incentives.

While it remains to be seen whether the measures will win the support of institutional investors looking for greater clarity around Woodside’s climate ambitions, it will do little to satisfy those seeking greater climate action.

Amplifying some pressure, the advocacy super fund HESTA said it was pushing Woodside to name candidates for its board, indicating growing pressure on the WA-headquartered company to seek appointees with heightened climate credentials.

“We’ve encouraged the Woodside board to undertake its own due diligence of these and any other potential director candidates with similar skills and experience, through its existing internal processes,” HESTA said.

“We believe ongoing strong governance, culture and capabilities are required for the company to thrive through the energy transition and be well-placed for a low-carbon future.”

Ms O’Neill said the company was engaging with all shareholders, but said the company’s directors have evolved substantially in the last 18 months.

“Following the merger with bhp petroleum, Woodside Energy is quite a different company and we’ve been going through a very deliberate process to ensure we have the right skills and capabilities on the board to reflect the global nature of the business, as well as to respond to the pressures of climate change,” said Ms O’Neill.

“The directors we’ve appointed in the last 18 months bring capabilities that I think are well suited to guide the organisation as we move forward.”

Originally published as Woodside Energy insists climate plan is meaningful as shareholder pressure grows