Briefing note

Investor briefing: Shareholder Resolutions to Woodside Petroleum Ltd to adopt Say on Climate reporting

AGM date and location: 15 April 2021, Perth, Australia.

Contact: Dan Gocher, Director of Climate and Environment

Other key links: Resolutions and Supporting Statements.


ACCR has engaged with Woodside Petroleum Ltd (Woodside) on its approach to climate risk management since 2017 and we last met with Woodside executives in early 2021.

At Woodside’s 2020 AGM, ACCR filed two shareholder resolutions that received an unprecedented level of support. The first—calling for Paris-aligned targets—was supported by 50.16% of shareholders. The second—calling for a review of Woodside’s direct and indirect lobbying—was supported by 42.66% of shareholders.

Special Resolution on Annual Climate Report Vote

Shareholders request the company 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).

Shareholders request that 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.

Woodside’s commitments

In late 2020, Woodside updated its climate commitments:[1]

  • To reduce equity share Scope 1 and 2 emissions by 15% by 2025 (baseline: average 2016-20)
  • To reduce equity share Scope 1 and 2 emissions by 30% by 2030 (baseline: average 2016-20)
  • Aspiration to achieve net zero emissions by 2050 or sooner

Woodside plans to achieve its short and medium term targets largely through the use of carbon offsets, in addition to operational efficiencies and avoiding emissions in design (e.g. use of batteries).

Woodside has not set targets for its Scope 3 emissions (the most material being use of product sold), preferring to work with its customers “to meet their lower-carbon goals”.[2]

In 2020, Woodside published its first review of industry associations. Despite assessing groups on their support for the Paris Agreement and global net zero emissions by 2050, it seemed to be based on policy positions rather than advocacy.[3] Woodside omitted any reference to the Australian government’s proposed “gas-fired recovery” from the pandemic, despite heavy lobbying for the proposal by the Australian Petroleum Production and Exploration Association (APPEA) throughout 2020.[4]

Woodside’s expansion plans

Woodside is planning to significantly increase production over the next decade through the development of the Scarborough (targeting first cargo 2026), Sangomar (targeting first oil 2023) and Browse (targeting FID from 2023) fields.

In 2020, Woodside’s equity share Scope 1 and 2 emissions were 3.6 million tonnes CO2e, an increase of 9% from 2019, due to “fewer planned maintenance activities and increased operational hours”.[5] Its equity Scope 3 emissions were 32.9 MtCO2e, an increase of 18% from 2019.[6]

In late 2019, Woodside projected production growth of 6% per annum until 2028.[7] Such growth would increase Woodside’s Scope 3 emissions to more than 47 MtCO2e by 2028 (see below).

In 2020, Woodside suffered pre-tax impairment losses of US$5.269 billion, “driven by a reduction in oil and gas price assumptions, increased longer-term demand uncertainty” and the “increased risk of higher carbon pricing”.[8]

Woodside’s expenditure on new energy in 2020—including hydrogen pilot projects, carbon capture and storage (CCS) and carbon offsets—was approximately equivalent to its expenditure on exploration of US$100 million.[9] Its investment expenditure guidance for 2021 is US$2.9 billion to US$3.2 billion (without targeted equity reduction),[10] and this expenditure is exclusively allocated to existing and new oil and gas projects.

ACCR’s analysis of Woodside’s commitments and strategy against the Climate Action 100+ indicators.

Climate Action 100+ Net-Zero Company Benchmark

ACCR has assessed Woodside’s existing disclosures against the Climate Action 100+ Net-Zero Company Benchmark Indicators, as laid out below.

Disclosure IndicatorWoodside commitment/disclosureACCR assessment
1. Net-zero GHG emissions by 2050 or soonerAspiration to achieve net zero emissions by 2050 or soonerExcludes Scope 3 emissions
2. Long-term (2036-2050) GHG reduction target(s)Aspiration to achieve net zero emissions by 2050 or soonerExcludes Scope 3 emissions
3. Medium-term (2026-2035) GHG reduction target(s)To reduce equity share Scope 1 and 2 emissions by 30% by 2030Excludes Scope 3 emissions
Applies to equity share emissions only
Depends almost exclusively on carbon offsets
Not Paris-aligned
4. Short-term (up to 2025) GHG reduction target(s)To reduce equity share Scope 1 and 2 emissions by 15% by 2025Excludes Scope 3 emissions
Applies to equity share emissions only
Depends almost exclusively on carbon offsets
Not Paris-aligned
5. Decarbonisation strategyPilot hydrogen projects
CCS feasibility assessment
Carbon offset portfolio
Plan is lacking in detail, with little or no information about costs, milestones or metrics to measure success.
6. Capital allocation alignment2020 expenditure of ~US$100m on new energy—hydrogen, technology and carbon businessExpenditure on new energy is overshadowed by planned investment expenditure in 2021 of US$2.9-3.2 billion (without targeted equity reduction) on oil and gas
7. Climate policy engagementAssessed industry associations on support for Paris Agreement in 2020Direct lobbying remains opaque
Industry association review focused on policy rather than advocacy
8. Climate governanceSenior VP, Climate reports to CEO
Material sustainability issues included in executives’ remuneration
Accountability for climate rests with board sustainability committee
Quantum of incentives for emissions reduction is opaque
Lack of climate competence on board
9. Just transitionn/aWoodside sold the Northern Endeavour FPSO to NOGA in 2016, who subsequently went into administration, leaving the cost of decommissioning to the Australian government.[11]
10. TCFD disclosureAddressed each of the key pillars of the TCFD across its 2020 Annual Report and its 2020 Sustainable Development ReportScenario analysis is insufficiently rigorous, requires assessment against B2DS and further granularity.
Source: Woodside Petroleum Ltd, ACCR

Say on Climate

In short, the ‘Say on Climate’ framework requires:

  1. Annual disclosure of emissions
  2. A plan to manage those emissions
  3. An AGM vote on this plan

ACCR believes that this framework will benefit Woodside and its shareholders.

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+ Net-Zero Company Benchmark provides metrics that create accountability for companies, and transparency and comparability for investors. The resolution centres around these two credible global standards, with guidance on minimum expectations and appropriate flexibility for Woodside to exceed them.

Woodside currently discloses its Scope 1 and 2 emissions for the previous five reporting periods, and its Scope 3 emissions for the last two reporting periods in its Sustainable Development Report.[12] For the purposes of satisfying the resolution, emissions should also be reported by asset (equity and operational), with accompanying commentary explaining annual performance and long-term trends.

While Woodside has addressed each of the key pillars of the TCFD across its 2020 Annual Report and its 2020 Sustainable Development Report, its plan to decarbonise its portfolio lacks detail.

Woodside’s projected growth in emissions from the planned development of the Scarborough, Sangomar and Browse fields will come at the expense of more ambitious emissions reductions before 2030. Furthermore, Woodside will rely heavily on land-based offsets to meet its 2025 and 2030 targets.
Beyond 2030, Woodside has proposed that CCS will be required to achieve net zero emissions by 2050, without making any firm commitments beyond a feasibility assessment.

Woodside has stated that it has approximately 3.4 gigatonnes of storage potential across its operated titles.[13] Other than disclosing a target cost for CCS of US$50 per tonne,[14] Woodside has not made a firm commitment to invest in CCS, disclosed the estimated cost, interim milestones or the metrics it will use to measure success.

Woodside is also engaged in a number of pilot hydrogen projects, and is aiming for initial hydrogen production by the mid 2020s. Further disclosure would be required for shareholders to assess the feasibility of this strategy.

Woodside should disclose additional information about each of the planned CCS and hydrogen projects, and the progress of each of those projects on an annual basis.

Board response

The Woodside board claims that Say on Climate would “add another layer of process and formality that is not necessary”, given its ongoing engagement with investors, and that it may “reduce the time and resources that Woodside will be able to devote to existing avenues of engagement”. [15]

  • ACCR response: the additional layer of process is outweighed by the value of an annual accountability mechanism, which will consolidate and focus engagement with shareholders.

The board also claims that shareholders have existing avenues to “express their opinions about climate-related issues”,[16] including general meetings, the annual investor day and via its regular engagement program.

  • ACCR response: not all shareholders are able to attend meetings, nor have access to Woodside executives. The board understates the importance of climate risk management by demoting it to an issue about which shareholders simply have opinions.


An annual Say on Climate will provide shareholders with a non-binding advisory vote on Woodside's plan to reduce emissions and its performance against that plan. Say on Climate is in the long-term interests of all shareholders.

Note on Special Resolution

The Australian Corporations Act 2001 (Cth) (the Act), as interpreted by courts, is not conducive to the right of shareholders to place ordinary resolutions on the agenda of the annual general meeting (AGM) of any listed company. While s249N of the Act sets out a general right of 100 shareholders or those with at least 5% of the votes that may be cast at an AGM propose resolutions for discussion at the company AGM, courts have interpreted this provision to restrict these rights to the proposal of special resolutions, i.e., resolutions amending the company constitution (ACCR v CBA [2015] FCA 785; affirmed in ACCR v CBA [2016] FCAFC 80).

The solution to this problem, in practical terms, is for a group of members meeting the statutory threshold to propose one special resolution to amend the company constitution in order to permit the proposal of ordinary resolutions by members, followed by an ordinary resolution (or resolutions) on the issues of substantive engagement. This is the accepted ‘Australian way’ of proposing shareholder resolutions.

A special resolution requires 75% support to be legally effective, and no resolution of this kind has ever succeeded in Australia. In this legal environment, it is all but assured that contingent, ordinary resolutions proposed by members will have no legal force. ACCR, however, uses this method to compel non-binding votes of shareholders. A large vote on an ordinary resolution to an Australian-listed company can be highly persuasive, but is never binding on the company.

Further, ACCR’s preferred special resolution drafting limits the scope of permissible ordinary resolutions to advisory resolutions related to “an issue of material relevance to the company or the company's business as identified by the company.”

In combination, the restrictive Australian legal environment under the Act, and the conservative method proposed by ACCR, are extremely deferential to the management powers of a company board (as per s198A of the Act). Shareholders should have no concern that any resolution proposed by ACCR will legally compel the activities of any company board, nor limit any board's capacity to make decisions in the best interests of a company.

In this context, we encourage institutional investors to use the opportunity to vote on non-binding Australian shareholder resolutions to send a signal (without binding effect) to boards and management, in line with ambitious readings of their policies. This makes the situation in Australia the same as that in the US where similar shareholder proposals are advisory. In the UK both directive and advisory proposals are possible.

  1. Woodside Petroleum Ltd, Investor Briefing Day 2020, November 2020 ↩︎

  2. ibid. ↩︎

  3. Woodside Petroleum Ltd, Industry Association Review, October 2020 ↩︎

  4. APPEA, ‘Government recognises gas in economic recovery plan’, September 2020 ↩︎

  5. Woodside Petroleum Ltd, Sustainable Development Report 2020, February 2021 ↩︎

  6. ibid. ↩︎

  7. Woodside Petroleum Ltd, Investor Briefing Day 2019, November 2019 ↩︎

  8. Woodside Petroleum Ltd, Annual Report 2020, February 2021 ↩︎

  9. Woodside Petroleum Ltd, Investor Briefing Day 2020, November 2020 ↩︎

  10. Woodside Petroleum Ltd, Annual Report 2020, February 2021 ↩︎

  11. Adam Morton, ‘Calls for Woodside to pay $200m to clean up moribund Timor Sea oil site it ran until 2016’, The Guardian, August 2020 ↩︎

  12. Woodside Petroleum Ltd, Sustainable Development Report 2020, February 2021 ↩︎

  13. Woodside Petroleum Ltd, Investor Briefing Day 2020, November 2020 ↩︎

  14. ibid. ↩︎

  15. Woodside Petroleum Ltd, Notice of Annual General Meeting 2021, March 2021 ↩︎

  16. ibid. ↩︎

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