Proxy adviser’s attack on Woodside on climate grounds does not stack up, Allan Gray says
Proxy adviser CGI Glass Lewis’s attack on Woodside Energy chair Richard Goyder on climate grounds is ‘surprising’ and unwarranted, major shareholder Allan Gray says.
Proxy adviser CGI Glass Lewis’s attack on Woodside Energy chair Richard Goyder on climate grounds is “surprising” and unwarranted, a major shareholder in the company says, with independent ratings of the company’s climate strategies backing this opinion.
Allan Gray Australia managing director Simon Mawhinney told The Australian that there was certainly a place for holding companies to account regarding their climate stewardship, but he failed to see how Mr Goyder in particular and Woodside warranted being targeted.
Proxy adviser CGI Glass Lewis this week recommended shareholders vote against Mr Goyder’s re-election at Woodside’s upcoming annual general meeting on April 24 because of what it called a “dismissive” attitude to concerns about emissions and climate.
Glass Lewis added that shareholders may also see his oversight failings as Qantas chair as relevant in assessing his suitability to remain chair of Woodside.
Glass Lewis also referred to a report by the Australian Centre for Corporate Responsibility (ACCR) that Woodside under Mr Goyder had been “persistently unresponsive” to shareholder concerns on climate risk management and was pursuing a growth strategy not in shareholders’ interests.
While Woodside has been on the receiving end of strong protest votes at its annual meetings on climate grounds - for example its 2021 climate report was adopted by just 51 per cent of shareholders - independent agencies such as Morningstar Sustainalytics and S&P Global rate the company’s performance as at worst a “medium” ESG risk rating in the case of Morningstar.
S&P meanwhile scored Woodside a 67 out of 100 in its 2023 S&P Global Corporate Sustainability Assessment, released in February, which the company says puts it in the top 10 per cent of the upstream energy sector globally.
Mr Mawhinney said he wasn’t sure where the Glass Lewis opinion was coming from, and disagreed with it.
“I have been surprised by their stance here,’’ Mr Mawhinney said.
“I think the board under Richard Goyder’s leadership have been excellent stewards of capital, have shown commitment to decarbonisation and the energy transition.’’
Mr Mawhinney said he couldn’t see anything specifically related to Mr Goyder in this context which would give them cause for concern.
“So I’m not sure. We think it’s important for companies to be good stewards of capital, we think that decarbonisation is the responsibility of all humans living on the planet, not just the boards of energy companies.
“And the boards of energy companies need to play a part, like everyone and the best way for them to play a part is to make sure that they continue to be good stewards of capital so that they’ll have the financial means to positively impact the transition.
“I think that Woodside seems acutely aware of that and as a shareholder in Woodside we support their approach and their efforts in this regard.’’
A recent report from Jarden analysts said Woodside’s “Climate Transition Action Plan highlights that the company is well placed to meet its 30 per cent emissions reduction target by 2030, largely thanks to access to its pool of 20 million tonnes of low-cost carbon credits’’.
“In addition, Woodside has already committed to projects that avoid and reduce emissions by 28 million tonnes of CO2-equivalent.
“In our view, the focus needs to be on the company’s post-2030 emissions reduction ambitions, given this will likely require investment in (currently very expensive) carbon capture and non-hydrocarbon power generation technologies.’’
Just on Friday Woodside announced a memorandum of understanding between its operated Angel CCS project with Yara Pilbara Fertilisers to study the feasibility of using CCS to decarbonise Yara Pilbara’s operations near Karratha in Western Australia.
The Angel project envisages a multi-user CCS hub near Karratha which would aggregate and store emissions from several industrial operations, with international customers also being contemplated.
Mr Goyder earlier this year brought his retirement as chairman of Qantas forward by a year following a series of controversies at the airline, including the board signing off on allowing former CEO Alan Joyce to offload the bulk of his shares with months to run on his contract.
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