Investors will put shareholder resolutions to the AGMs of Woodside and three other emissions-intensive ASX-listed companies in a move designed to pressure them to reveal details of their greenhouse gas emissions and carbon policies.
The Climate Advocacy Fund today revealed that its first tranche of climate-change related AGM resolutions – the first of their kind in Australia – would target Woodside, Paladin Energy, Aquila Resources and Oil Search.
The fund, an initiative of Australian Ethical Investment and the Climate Institute, has selected the four companies because they are emissions intensive and don't publicly disclose details of their emissions and corporate climate policies via schemes such as the Carbon Disclosure Project.
In the case of Woodside, the fund is also concerned at indications from the company that it does not factor a carbon price into its business planning because it considers it will be protected from it for many years.
The move is the first step in a push to ensure that ultimately 100% of ASX-listed companies disclose carbon-related information, with Climate Institute business director Julian Poulter today saying anything less would be unacceptable.
Reveal carbon assumptions, resolution says
The shareholder resolution for Woodside, Australia's largest oil and gas company, says the company's annual report should include "a description of assumptions" made by the company about the path of future carbon prices, oil prices, demand for oil and greenhouse gas emissions.
It should also include information on assumptions made by the company and its auditor on the extent of any impairment of Woodside's assets that might result from carbon prices and the regulation of greenhouse gas emissions, the resolution says.
To build support for the four initial resolutions, the fund will contact major institutional investors including signatories to the UN PRI, which obliges its members to consider environmental, social, and corporate governance issues in its investment decision-making.
The resolutions will be posted on the website of the UK-based PRI tomorrow and on the website of another key collaborative body for institutional investors, the U.S.-based ICCR.
Woodside and Oil Search won't hold their next AGMs until next year, but Paladin and Aquila are expected to have theirs later this year.
'Detail emissions and trends'
Paladin Energy's Australian projects comprise the Valhalla/Skal, Bigrlyi, Manyingee, Oobagooma and Angela/Pamela uranium developments and Aquila Resources has coking coal and iron ore interests.
The fund has proposed identical resolutions for the two companies calling for their annual reports to include a description of the level of their emissions and recent trends, as well as information on their policies and management systems to deal with climate change risks and a carbon price.
ASX-listed Oil Search is PNG's largest oil and gas producer and has a 29% interest in the PNG LNG Project, operated by ExxonMobil.
The resolution for Oil Search proposes that it adopt "quantitative goals, based on current technologies, to reduce total greenhouse gas emissions" and report on plans to achieve these goals and on relevant policies and management systems.
Speakers at today's event naming the four target companies said it was not necessary for the resolutions to achieve 50% or greater support, as overseas experience had shown that companies took very seriously even moderate support for such resolutions.
Companies won't change 'until they have too'
Self-proclaimed "sustainability provocateur" Paul Gilding, who founded corporate environmental consultancy Ecos Corp, told today's launch of the resolutions that "companies do not, will not change until they have too".
And the pressure for them to change must come from either governments or investors, he said.
Australia has "a particularly sophisticated and aware investment community … and I think ripe for this kind of initiative", he said.
It has investors, such as some of the major super funds, "who care about the issues who are articulate about what they believe has to happen and who are prepared to use that authority to try and change companies", he said.
Gilding rejected claims by some that the markets had effectively priced carbon risk into its decision-making, arguing that they had failed to take into account that climate science dictated most of the unexploited fossil fuel reserves would have to remain so.
"Whenever you hear investors saying we price carbon risk into our assumptions I can tell you they have not," he said.
Gilding said "the killer fact" was that if the world wanted to maintain a reasonable chance of not going past two degrees of warming "then you are looking at approximately 75% of all known economically recoverable reserves of oil, coal and gas never been used".
That means a large percentage of the asset base of the companies with these reserves "is suddenly worthless or certainly worth a lot less".
