Proxy group at odds with itself over Woodside’s Richard Goyder

Angela Macdonald-SmithSenior resources writer

Apr 8, 2024 – 4.18pm

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Investors focused on sustainability should vote against the re-election of Woodside Energy chairman Richard Goyder because the oil and gas producer’s emissions reduction commitments are not in line with shareholder expectations, Institutional Shareholder Services’s ESG advisory division has told its clients.

That puts it at odds with the influential proxy advisory’s main analyst, who has recommended shareholders back Mr Goyder’s re-election at Woodside’s annual meeting later this month. Both recommend a vote against the company’s climate plan.

Climate protesters outside Woodside’s AGM in April 2023. Tony McDonough

The Woodside meeting is shaping up as a major clash between the energy giant and investors spurred on by environmental activists who want to force the company into taking more decisive action to rein in carbon emissions from its products.

Mr Goyder’s re-election is supported by Ownership Matters, as well as Allan Gray, a major Woodside shareholder, along with ISS. It is opposed by CGI Glass Lewis.

Like the main ISS advice, the sustainability arm said Woodside’s climate transition action plan “does not appear to be sufficiently complete and rigorous�?. It said Woodside only had an “aspiration�? rather than a commitment to reach net-zero emissions by 2050 for its direct emissions, and it lacked “tangible�? plans to reduce Scope 3 emissions.

“On the contrary, its business plan is to continue the production of oil and gas without near-term, meaningful development of lower carbon services,�? its report reads.

Vas Kolesnikoff, ISS’s main analyst in Australia, said there was nothing unusual about the different stance taken by the firm’s sustainability policy division.

Woodside suffered a record 49 per cent vote against its first climate report at its 2022 meeting. At last year’s meeting, climate-conscious investors made their dissatisfaction known in the votes on the re-election of director Ian Macfarlane and on the remuneration report. Almost 35 per cent of shareholders voted against the former resources minister, while the vote against the remuneration report was 20.99 per cent – just short of the 25 per cent needed to record a first strike against the board.

This year, Mr Goyder has become the biggest target, as well as the climate plan itself, amid a campaign by both activist investor groups the Australasian Centre for Corporate Responsibility and Market Forces. The latter, an arm of Friends of the Earth, is also urging shareholders to vote against Woodside’s remuneration report.

The voting on Mr Goyder is also set to reflect the displeasure among some shareholders of Woodside’s donation to the Yes campaign for the Indigenous Voice to parliament last year. Data released last week by the Australian Electoral Commission showed Woodside was the third-biggest corporate donor to the campaign, giving $2.1 million.

CGI Glass Lewis, a rival proxy advisory to ISS, last week recommended against Mr Goyder and the climate plan. Allan Gray has already said it would go against that advice and vote for both, while high-profile energy analyst MST Marquee’s Saul Kavonic accused the proxy firm of losing objectivity and acting like an anti-industry activist.

Similar issues are set to dominate the discussion at Santos’ annual meeting on Thursday, where environmental groups are urging shareholders to vote against the re-election of the company’s chairman, Keith Spence, and against the remuneration report. Mr Spence’s re-election is backed by both ISS and CGI Glass Lewis.

Santos is not putting a climate report before shareholders for a vote this year.

Angela Macdonald-Smith writes on the resources industry with a focus on energy, including gas, oil, electricity and renewables. Connect with Angela on Twitter. Email Angela at amacdonald-smith@afr.com