Woodside investors unfazed by Scarborough climate risks

view original post

But Katana Asset management’s Romano Sala Tenna said the ESG “bandwagon” needed to get more sophisticated and mature in the dialogue about gas given its key role in supporting the transition to clean energy, pointing to the energy price crisis gripping Europe as illustration of the challenges ahead.

“We’ve seen what’s happening in Europe right at the moment as we speak with the transition: it’s going to be lumpy and LNG is the perfect commodity to facilitate this transition,” he said.

QIC’s head of global infrastructure Ross Israel acknowledged some investors would view Scarborough as inconsistent with the Paris and Glasgow climate agreements to move away from fossil fuels.

“I don’t think it is for everyone, I think it depends upon the lens of your portfolio and the level of commitment you’re making,” Mr Israel said, while adding it was “without doubt part of the transition fuel solution globally”.

“It [gas] is an important bridge to the energy transition so I think it depends on who you ask. For security of supply and peaking power gas has an important role to play,” he said.

Advertisement

QIC’s Global Infrastructure Fund has invested in gas assets, including Lochard Energy, which owns the main gas storage plant on the east coast, at Iona in Victoria.

Laura Hills, director of corporate engagement at the Investor Group on Climate Change, whose members manage more than $2 trillion in Australia and New Zealand, emphasised the importance of disclosure of climate risks by companies to inform investors in their decision-making.

She said the need for climate risks to be incorporated into financial reporting was emerging as a key ask for all companies in the Climate Action 100+ initiative, aimed at ensuring large emitters take action on climate change, and was particularly relevant for “extractive” firms such as gas. Investors are also asking firms to set targets on scope 3 emissions, she said.

Woodside has not set targets for scope 3 emissions, those released by the users of its products, and has a net zero “aspiration” for its direct emissions.

“CA100+ engagement groups all engage regularly on climate related financial risks with companies,” Ms Hills said.

“With extractives companies these engagements include discussion regarding appropriate consideration of climate risk and alignment of corporate strategies with Paris-aligned climate transition pathways.

Advertisement

“Incorporation of climate risk disclosure is a key ask for all CA100+ focus companies,” she said.

ACSI, which has stepped up and widened advocacy on climate issues, said it “will engage” with Woodside but declined to comment further.

Woodside chief executive Meg O’Neill, who has pointed out the minimal CO2 content in Scarborough gas of 0.1 per cent, said the company is engaging with shareholders on issues around climate and noted Woodside has committed to put its climate report to a non-binding advisory vote at its 2022 AGM.

“We regularly engage shareholder and other stakeholders on climate as well as other topics,” she said.

“Our approach to climate risk management is in line with the recommendations of the Taskforce on Climate-related Financial Disclosures.”