In CGI’s report containing its recommendations, seen by The Age and The Herald, the firm noted that it was concerned with the inclusion of requests for the companies to disclose how they would wind down operations and manage job losses, saying it does not believe these requests “reflect the best long-term interests of shareholders”.
However, because the resolutions were non-binding, CGI said it believed such concerns could be overlooked “in light of what would be potentially beneficial reporting”.
The boards of Woodside and Santos have both urged their investors to vote down the resolutions, saying they disagreed with the premise that winding down oil and gas production was the only pathway consistent with achieving the Paris agreement’s goals.
“The board does not consider this premise is supported by reputable evidence,” Santos said, citing scenarios modelled by the International Panel on Climate Change (IPCC) recognising the potential impacts of emerging technologies such as carbon capture and storage (CCS) to decarbonise gas production. Woodside said it intended to continue spending capital to drive superior shareholder returns.
Santos has a goal of achieving net-zero operational emissions by 2040, while Woodside is targeting net zero by 2050.
Meanwhile a separate set of resolutions, calling for Santos and Woodside to commit to giving shareholders a vote on their climate change reports, was withdrawn after both companies agreed to adopt the “Say on Climate” initiative to facilitate a shareholder vote at future annual general meetings.
“Companies are increasingly recognising the importance of climate-related financial risk to investors,” said Louise Davidson of the Australian Council of Superannuation Investors (ACSI).
“Woodside joins Santos, Rio Tinto, Shell and several other global companies in adopting an advisory ‘say on climate’ vote. We expect many more companies to adopt this approach by the end of the year.”
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