Big US pension funds, Aware want Richard Goyder off Woodside Energy board

Aware’s chief investment officer, Damian Graham, said Woodside’s climate plan was too focused on offsets rather than abatement, and the company had “no clear plan” on carbon emissions reductions beyond 2030.

“This decision has not been taken lightly and is underpinned by our belief that climate change is one of the most significant financial risks to our portfolio over the long term and to our members’ financial future,” he said.

Ahead of the Wednesday meeting, the company’s largest investors have begun disclosing how they intend to vote.

AustralianSuper’s head of equities, Shaun Manuell, said on Monday that fund intended to vote against the climate plan, but for Mr Goyder.

“We have been comfortable that the company has engaged with us extensively over the last 12 months and that it has made large improvements in its disclosure in its climate transaction plan,” Mr Manuell told a parliamentary inquiry.

“But to some extent all that increased disclosure has left us with additional questions.”

The fund has backed Woodside’s energy transition plans previously, but Mr Manuell said the fact it had substantially increased its stake in the company since the last vote meant it was “more important this time” that it had faith in its strategy.

HESTA last week said it would vote for Mr Goyder and against the climate plan.

The last time Woodside put its climate plan to a vote, in 2022, it received a 49 per cent vote against it.

Mr Goyder was not up for re-election last year, but almost 35 per cent of shareholders voted against another director, former resources minister Ian Macfarlane.

Two of Woodside’s largest shareholders, Blackrock and Vanguard, index fund managers with a combined holding of about 16 per cent, said they would not disclose their voting intentions ahead of the meeting.

The campaign against Mr Goyder and Woodside’s climate plan is being led by the Australasian Centre for Corporate Responsibility, which claims the company has been “persistently unresponsive” on concerns about the management of climate risks.

The climate plan is also opposed by influential proxy advice firms Institutional Shareholder Services, CGI Glass Lewis and the Australian Council of Superannuation Investors.

They say the plan is incomplete and lacking commitment to tangible actions to achieve net-zero emissions by 2050.

On Friday, Woodside’s chief executive Meg O’Neill argued that the company’s climate plan was realistic, criticising some of the oil and gas group’s peers for “very aggressive targets”.

“We have laid out targets that we are honest about, and we have confidence in delivering,” she said. “That’s the difference between ourselves and some other companies that have said things to appease shareholders.”

Other oil and gas giants such as Shell have backtracked on emission reduction plans as they regroup to meet growing demand for their traditional products and take advantage of higher prices following Russia’s invasion of Ukraine two years ago.

Those higher prices have begun to subside, and on Friday Woodside reported revenues for the three months to March 31 had fallen to $US2.97 billion ($4.6 billion), 31 per cent lower than the same period last year.

The average realised price was $US63 per barrel of oil equivalent in the March quarter, substantially lower than last year’s $US85 a barrel, and even the previous quarter’s $US67 a barrel.

In a note to clients, JPMorgan analyst Mark Busuttil said Woodside’s revenues for the quarter were “well below our prior forecast due to lower sales volumes and lower LNG realised prices”.

“The weakness in pricing was partly attributed to lower production, but Woodside also sold a greater proportion of its sales volumes at spot LNG prices,” he said.

But the investment bank remains bullish on Woodside’s prospects.

Mr Busuttil said the company’s two key growth projects – Scarborough and Sangomar, in Senegal – remained “on track”.

Scarborough is 62 per cent complete, with first production in 2026, while Sangomar is almost finished, with oil production later this year.

Woodside shares fell 2.8 per cent on Monday to close at $28.58.