Woodside faces investor revolt over climate concerns

Woodside Energy is on course for another investor revolt at its annual meeting next week, with board member Ian Macfarlane facing a backlash over climate concerns, while the company’s remuneration report may also receive a strike from investors.

CGI Glass Lewis joined another proxy adviser in recommending a vote against the former resources minister’s re-election to the board and the remuneration report. UK pension fund LGIM has also said it will vote against Macfarlane’s re-election.

“The rationale for our intention to vote against the most senior director up for re-election, Mr Ian Macfarlane, reflects our concerns around the company’s lack of commitment to aligning with the Paris objectives and net zero, and the insufficient reaction to the significant proportion of shareholder votes against their climate report (49 per cent) in the 2022 AGM,” said the UK fund, which has $US1.4 trillion ($2.08 trillion) under management.

LGIM also said it is seeking more clarity on the energy group’s decarbonisation targets and disclosure issues around its over-reliance on offsets for achieving climate goals.

The fund said it voted against Woodside’s climate report at its 2022 AGM, and noted that the 49 per cent vote against was the highest level of dissent seen among oil and gas peers that put their climate plans to a vote last year.

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CGI’s report noted that the Australasian Centre for Corporate Responsibility, as well as Woodside investors Vision Super and Betashares, all recommended a vote against Macfarlane and two other directors up for re-election to account for “the board’s repeated failure to present a credible climate strategy – a failure that raises genuine governance concerns”.

But CGI said it is recommending a vote against Macfarlane only, as a vote against all three would result in significant disruption to the board.

Institutional Shareholder Services has recommended investors vote against re-election of the three directors – Macfarlane, Larry Archibald and Goh Swee Chen – but is supporting the remuneration report.