Shareholder tension escalates at Woodside AGM over leadership on climate change governance
Woodside Energy, the Australian energy major, faced intense scrutiny during its annual general meeting (AGM) in Perth this morning, with shareholders expressing dissatisfaction over the company's climate risk management and transition strategy.
The company's CEO, Meg O'Neill, referred to the Louisiana project, set to come online in 2029, as a "game changer" for Woodside. However, concerns were raised in the February 2025 update to Woodside's climate plan, particularly around the company's $5bn energy transition budget.
One of the key issues surrounds the company's governance, with the Australasian Centre for Corporate Responsibility (ACCR) recommending voting against all three directors due to shareholder discontent. Notably, Ann Pickard, Ben Wyatt, and Tony O'Neill, who are closely associated with Woodside's climate governance, faced opposition.
Richard Goyder, chair of Woodside Energy, emphasized the need for decarbonization to mitigate climate change but expressed uncertainty about the methods. This uncertainty seems to have fueled shareholder concerns, as evidenced by the votes against directors linked to climate governance.
To address these concerns, Woodside Energy can take several key steps. First, enhancing climate risk oversight at the board level is crucial. The recent votes against directors such as Michael Utsler and Musje Werror, who serve on the audit committee responsible for climate risk oversight, indicate dissatisfaction with the current level of climate governance and ambition.
Second, demonstrating clear progress on climate targets is essential. While Woodside is on track to reduce net equity Scope 1 and 2 emissions by 15% by 2025, investors are seeking more ambitious and transparent climate strategies. Accelerating these initiatives and publicly reporting detailed progress can rebuild confidence.
Third, increasing capital allocation to decarbonization projects is vital. Woodside’s 2025 strategy includes shifting capital from non-core projects into high-impact LNG and new energy ventures such as hydrogen, ammonia, and carbon capture storage (CCS), with $5 billion planned investment by 2030. Prioritizing and communicating these investments clearly supports their energy transition narrative.
Fourth, maintaining operational resilience alongside decarbonization is crucial. Woodside’s operational excellence and cost discipline position it well for the transition. Balancing strong cash flow management with climate action furthers long-term value creation.
Lastly, engaging constructively with shareholders is essential. Rather than ignoring dissenting votes, Woodside should engage shareholders transparently about how it is addressing climate risks and governance issues. This includes clear reporting on governance improvements and climate performance aligned with investor expectations.
By taking these actions, Woodside Energy can improve its climate risk management and accountability framework, directly addressing shareholder concerns about climate governance while sustaining its strategy for long-term energy transition success.
However, Woodside's emissions rose 10% in 2024 once offsets are excluded, despite reporting a decline, according to Rohan Bowater, lead oil and gas analyst at Accela Research. This is the worst vote on record against a committee chair for Woodside and the second worst vote ever against a Woodside director, according to Alex Hillman.
The election of the three directors - Ann Pickard, Ben Wyatt, and Tony O'Neill - took place during the AGM. CalSTRS also voted against Tony O'Neill's bid, while Australian superannuation fund HESTA voted against Ann Pickard's appointment. Last year, 58% of shareholders voted against Woodside's climate transition plan.
In conclusion, Woodside Energy faces significant challenges in addressing shareholder concerns about climate risk management and accountability. However, by strengthening its climate governance, accelerating its climate strategy execution, and improving transparency and oversight mechanisms, it can regain the trust of its investors and continue its journey towards a sustainable energy future.
- In light of the company's $5bn energy transition budget, shareholders are seeking more ambitious and transparent climate strategies, particularly in the area of environmental-science related to climate-change mitigation.
- Investors are urging Woodside Energy to prioritize decarbonization projects, as demonstrated in their votes against directors linked to climate governance, including Michael Utsler and Musje Werror, who serve on the audit committee responsible for climate risk oversight.
- To maintain trust with its investors and continue its energy transition journey, Woodside Energy can expand its investments in business ventures such as hydrogen, ammonia, and carbon capture storage (CCS), as outlined in its 2025 strategy, and communicate these investments transparently to demonstrate its commitment to addressing climate risks and governance issues.
