Shareholder Resolution

ACCR Shareholder Resolutions to Santos Ltd to adopt Say on Climate reporting

The Australasian Centre for Corporate Responsibility (ACCR) has filed Shareholder Resolutions to Santos (ASX: STO) asking for an annual vote on the adoption of a Climate Report consistent with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and the Climate Action 100+ Net-Zero Company Benchmark as developed by institutional investors.

This page contains the resolution and its supporting statement, and will be updated with links to news and additional briefings about this engagement.

Special resolution

Shareholders resolve that the following clause be inserted into our company’s Constitution, either as a new clause 39(h) or wherever the Board determines it is better situated:

39(h). Annual vote on adoption of climate report

  1. Each year commencing 2022, no later than the date at which the company disseminates to shareholders its notice of meeting, pursuant to clause 25, for its annual general meeting, the company will publish a report consistent with the recommendations of the Financial Stability Board of the G20’s Task Force on Climate-related Financial Disclosures, and where relevant, the Climate Action 100+ Net-Zero Company Benchmark (Climate Report). At a minimum, the Climate Report will include:

    • a) the company’s greenhouse gas emissions (Emissions) in accordance with recommended disclosure (b) of the Task Force on Climate-related Financial Disclosure Metrics and Targets Recommendation, and
    • b) the company’s proposed strategy to reduce its Emissions, detailing short, medium and long-term targets for reductions in the company’s Emissions.
  2. At each annual general meeting, a resolution that the Climate Report be adopted must be put to a vote. The vote on the resolution is advisory and does not bind the directors.

Supporting statement

The management of climate risk by major companies has portfolio-wide and economy-wide implications. The proponent of this resolution, the Australasian Centre for Corporate Responsibility (ACCR), and co-filing shareholders, believe that the mechanism this resolution seeks to establish—an annual report on our Company’s climate transition plans and strategies against relevant international frameworks (Climate Report) and a vote thereon—will benefit the Company and its shareholders, as well as global climate change objectives.

Our Company “recognises the science of climate change and supports the objective of limiting global temperature rise to less than 2°C”[1]. In December 2020, our Company committed to achieve net zero operational emissions (Scope 1 and 2) by 2040[2]. As governments take action to limit greenhouse gas (GHG) emissions, climate change will represent a material risk to our Company for the foreseeable future.

Australian legal context

Australian law does not currently compel the disclosures sought in the Climate Report, and the prospect of law reform which would compel such disclosures remains unlikely for the foreseeable future in this market. This resolution is designed to ensure that, in the absence of law reform, immediate investor demand for information to be disclosed in a timely and consistent fashion is met, so that a structured conversation between our Company and its shareholders can take place. ACCR intends to make similar requisitions at a number of Australian-listed companies in 2021.

Information sought in the Climate Report

Due to the rapid transition taking place in the energy sector, it is imperative that shareholders are provided with the necessary information required to make informed judgements about the future earnings and value of our Company. The information sought in the Climate Report, which this resolution seeks to elicit on an annual basis, is an important means of assuring shareholders that the Company is managing effectively the physical and transition risks associated with climate change.

The Recommendations of the Task Force for Climate-related Financial Disclosure (TCFD) provide an internationally recognised framework for climate risk disclosure. In addition, the Climate Action 100+ (a coalition of more than 500 investors with over $52 trillion in assets under management) Net-Zero Company Benchmark outlines metrics that create accountability for companies, and transparency and comparability for shareholders on GHG emissions, GHG targets, improved climate governance, and climate-related financial disclosures. The resolution centres around these two credible global standards, with guidance on minimum expectations and appropriate flexibility for our Company to exceed them.

Our Company addressed each of the key pillars of the TCFD in its 2020 Climate Change Report. The additional disclosures required to satisfy the request for a Climate Report would not be burdensome.

Our Company disclosed its Scope 1 and 2 emissions (operational and equity share) for the previous six reporting periods, and Scope 3 emissions (operational and equity share) for the previous three reporting periods in its 2020 Climate Change Report[3]. Emissions are reported to the financial year ending 30 June, while financial performance is reported to the calendar year ending 31 December[4]. For the purposes of satisfying the request for a Climate Report, emissions should also be reported by each of the core operated and non-operated asset hubs, with accompanying commentary explaining annual performance and long-term trends.

In December 2020, our Company disclosed a ‘Roadmap to net zero’^5, outlining the planned activities that will be required to achieve net zero operational emissions by 2040. Our Company plans to reduce operational emissions by 26-30% by 2030 through the use of land-based offsets, energy efficiency projects, phase 1 of the carbon, capture and storage (CCS) project at Moomba, and electrification with hydrogen fuel in the Cooper Basin[5]. It is not clear what each of the planned activities in the Roadmap will contribute towards the 2030 target.

Beyond 2030, our Company intends to rely on the expansion of the Moomba CCS project, and the development of hydrogen with CCS, to deliver the remaining ~70% emissions reduction to net zero. Other than an estimate of capturing carbon emissions at Moomba for $A30 per tonne[6], our Company has not disclosed interim milestones, the estimated cost or the metrics it will use to measure the success of the planned activities in the Roadmap. The cost of the planned activities in the Roadmap is imperative for shareholders to assess future earnings, and the likely impact of more ambitious emissions reduction pathways.

To date, our Company has not committed to reducing its Scope 3 emissions (from the use of product sold), other than to “work with customers to reduce their Scope 1 and 2 emissions by more than 1 MtCO2e per year by 2030”[7]. Our Company has discussed the prospect of capturing its customers’ emissions at Moomba[8], but has not disclosed sufficient information for shareholders to assess this strategy.

Our Company should provide additional information about each of the planned activities in the Roadmap, and the progress of each of those activities on an annual basis. The projected cost of each of those activities is imperative for shareholders to assess future earnings, and the likely impact of more ambitious emissions reduction pathways.

An annual vote on the Climate Report will simply provide shareholders with a non-binding advisory vote on our Company’s performance and strategies to reduce emissions. This is in the long-term interests of all shareholders.

ACCR urges shareholders to vote for this proposal.


  1. Santos Ltd, 2020 Climate Change Report, February 2020 ↩︎

  2. Santos Ltd, ‘Santos to be net-zero emissions by 2040’, December 2020 ↩︎

  3. Santos Ltd, 2020 Climate Change Report, February 2020 ↩︎

  4. ibid. ↩︎

  5. ibid. ↩︎

  6. Santos Ltd, ‘Santos to be net-zero emissions by 2040’, December 2020 ↩︎

  7. Santos Ltd, 2020 Investor Day Briefing, December 2020 ↩︎

  8. Santos Ltd, ‘Santos to be net-zero emissions by 2040’, December 2020 ↩︎

Our work