Investor Dissatisfaction with Climate Governance at Woodside AGM Increases

Investor Dissatisfaction with Climate Governance at Woodside AGM Increases

In a recent Annual General Meeting (AGM) held in Perth, Woodside Energy faced criticism from shareholders over its climate transition strategy. The energy major's 2025 AGM saw a significant number of votes against the re-election of key directors, including Ann Pickard, Ben Wyatt, and Tony O'Neill.

Last year, 58% of shareholders voted against Woodside's climate transition plan, expressing concerns about the company's commitment to decarbonization. One of the main issues raised was the reliance on carbon offsets for Scope 1 and 2 emissions. Despite reporting a decline in emissions, Woodside's emissions rose 10% in 2024 once offsets are excluded.

Shareholders have been pushing for Woodside to reduce its carbon offset dependency and focus more on direct emissions cuts. Improving transparency on offset use, capping offsets, and strengthening efforts on direct reductions could enhance investors’ confidence.

In addition, investors expect Woodside to align its decarbonization targets with the global 1.5°C climate goal. Although Woodside has set targets such as investing US$5 billion in new energy and lower-carbon services by 2030 and aims for 5 million tons CO2-eq abatement capacity, progress might currently be considered insufficiently ambitious or not fully aligned with scientific benchmarks shareholders prioritize.

Shareholders also want clearer, quantifiable disclosures about how each element of Woodside’s climate plan contributes to emissions reduction. For example, a detailed breakdown of the impact of projects like carbon capture and new energy investments, with third-party validation of trajectories and targets, would strengthen accountability.

Investors expect directors to be accountable for delivering on climate transition plans aligned with science-based targets. This includes setting clear performance benchmarks, linking remuneration to ESG outcomes, and having robust oversight mechanisms. External shareholder votes against Woodside’s climate transition plans indicate room for governance improvements to better satisfy shareholder demands for responsible leadership and clear strategic alignment.

Woodside's lack of response to previous shareholder votes has been a concern for some analysts, such as Alex Hillman, ACCR lead analyst. Rohan Bowater, lead oil and gas analyst at Accela Research, notes that Woodside's reported emissions decline is more on paper than in practice.

The Australasian Centre for Corporate Responsibility (ACCR) recommended voting against all three directors due to shareholder discontent with Woodside’s climate risk management. The ACCR's recommendation was followed by votes from Australian superannuation fund HESTA and international funds like CalPERS and CalSTRS.

Despite the criticism, Woodside's CEO and managing director Meg O'Neill referred to a new project, the Louisiana project, as a "game changer" that will significantly boost Woodside's portfolio when it comes online in 2029. The project is likely to only deliver 1-2% of total company sales by FY30, leaving little budget for more reliably low-carbon offerings.

The February 2025 update to Woodside's climate plan raised more questions than it answered, notably around the company’s $5bn energy transition budget. The company needs to address these concerns and demonstrate a clear commitment to decarbonization to regain shareholder trust and meet expectations.

References: [1] Woodside Energy, "Woodside Energy Reports 2024 Full Year Results", 2025. [2] Australasian Centre for Corporate Responsibility, "ACCR Recommends Voting Against Woodside Energy's Climate Transition Plan", 2025. [3] HESTA, "HESTA Votes Against Woodside Energy Directors Over Climate Concerns", 2025. [4] CalSTRS, "CalSTRS Votes Against Woodside Energy Directors Over Climate Concerns", 2025.

1. The ongoing concerns about Woodside Energy's climate transition strategy have led investors to question the company's commitment to environmental-science and decarbonization, particularly its reliance on financing carbon offsets instead of focusing on direct emissions cuts.
2. To enhance investors' confidence and align with scientific benchmarks prioritized by shareholders, Woodside Energy should improve transparency on offset use, cap offsets, and strengthen efforts on direct reductions in emissions.
3. Recognizing the importance of business and finance in addressing climate-change, investors expect Woodside Energy to develop more ambitious decarbonization targets that are in line with the global 1.5°C climate goal and demonstrate clear progress towards these targets.

Read also: