While Woodside chairman Richard Goyder was re-elected and other resolutions such as the remuneration report were passed, the meeting was overtaken by pressure on the ASX’s largest oil and gas company to move faster on its energy transition plans.
While climate change protesters attempted several times to disrupt the marathon meeting, in the end it was the shareholders themselves who delivered a clear rejection of the climate change action plan with only 41.64 per cent supporting it and 58.36 per cent rejecting it.
Despite the fact that it was non binding, Goyder promised to take the rejection seriously, despite earlier comments that the company would not be “turning on a dime” with regard to its policies and that it would not be making promises that it couldn’t keep.
“We will reflect on the voting, continue to engage with shareholders, understand the feedback, and decide how we hopefully work with shareholders who want to own shares in Woodside to ensure that they have the confidence in us and our plans,” he said.
Goyder will now need to go back to shareholders such as Australia’s largest super fund, AustralianSuper, which holds more than 3 per cent of the company, and discuss exactly what changes in its strategy would be sufficient to meet their demands for the company to do better.
Like many other shareholders, AustralianSuper backed Goyder’s re-election (he received more than 83 per cent of the vote) but is now putting the pressure on him to deliver on its demands for more aggressive action. While Woodside is in a unique position, in the eye of the storm as a major oil and gas producer, the meeting will inevitably see climate change becoming an increasing focus to put pressure on other companies.
With the Woodside meeting a focus for climate change protesters and climate change critics, the challenge for other companies and boards will be to ensure their AGMs are not hijacked by the resolution or become a grandstanding platform for vocal shareholders to make their points on the issue.
The meeting became a microcosm of a broader debate facing Australia, as Goyder and his chief executive, Meg O’Neill, attempted to put their case for the importance of gas in reducing the use of coal, particularly in major emitting countries such as China and its importance in supplying Australia’s domestic energy needs, with the practical challenges of moving to net zero by 2050.
While Goyder had declared at the beginning of the meeting that he had “never been more energised and excited to serve as chair of Woodside”, his energy and excitement for the role will be sorely tested as he now faces a major challenge in combining the need for ongoing returns to shareholders with a more aggressive emission reduction strategy.
The company is targeting initiatives to reduce its carbon emissions by a total of 28 million tonnes by 2050.
In the shorter term, it is aiming to reduce its Scope 1 greenhouse emissions by 15 per cent by 2025 and Scope 2 emissions by 30 per cent by 2030 which it says it is on track to achieve.
But those voting against the current strategy argue it needs clearer goals to meet its targets by 2050 and is too reliant on the use of carbon offsets to get there.
The question of Goyder and his board is what more specific action is needed to move at a faster pace – action that will almost inevitably reduce the company’s short-term returns to shareholders.
While the company is also under more pressure to reduce its Scope 3 emissions, Goyder was rightly putting the case that there are limits on what a company can do to reduce the emissions of its major customers and suppliers.
“Our Scope 3 emissions are our customers’ Scope 1 emissions,” he argued.
O’Neill, who sat next to Goyder in the marathon meeting and has a firm grasp on what is needed to run the company operationally, declared that the company’s strategy was to “thrive through the energy transition”.
But the question for the company is how can it do this in the face of shareholder pressure for faster emission reductions.
As O’Neill pointed out in her presentation and comments, the company is looking at the potential of hydrogen and other measures such as carbon sequestration, but these sectors have a long way to go before they are profitable.
The meeting and the subsequent challenges now facing the company’s management, highlight the difficulties of a chair of a company in the spotlight of climate change juggling the role with other major responsibilities.
While Goyder is stepping down from his equally demanding role as chair of Qantas, he will still retain his high-profile role as chairman of the AFL Commission.
By his own admission, the pressure for more action on climate change is now taking up an increasing amount of his time.
Last year he held 43 meetings with investors on climate change (in addition to the 70 held by the company’s investor relations team), followed by another 40 meetings so far this year.
While Goyder argued that his time spent on the AFL came after the time he was spending on family and his two chairmanship roles, the demands of overseeing a high-profile national sport with millions of passionate supporters, organisational demands and commercial interests are not inconsiderable.
Goyder’s final years as chair of Woodside, which he could well oversee for the next three years, come towards the end of a distinguished corporate career that included a long stint as chief executive of Perth conglomerate Wesfarmers.
Recent years have seen criticism of Goyder’s role as chair of Qantas, particularly in the final year of chief executive Alan Joyce, and Woodside’s decision to spend millions of dollars to back the yes vote for the voice to parliament.
But if Wednesday’s rowdy and cantankerous annual meeting is any guide, the next three years will continue to be demanding for Goyder and Woodside given its increasing role as a focus for climate change activists.
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Woodside’s four-hour annual meeting highlights the growing potential for climate change resolutions at AGMs to push companies for faster action on climate change action.