Investors in Woodside Petroleum Limited (ASX: WPL) might want to keep a close eye on the stock in the future after a new report found that the company's board may not have what it takes to protect shareholders interests.
Woodside was one of 15 S&P/ASX 200 Index (ASX: XJO) companies analysed by the Investor Group on Climate Change (IGCC). The group found Australian company directors generally lack the skills needed to protect investors' interests from climate change.
The IGCC's report; A Changing Climate: what investors expect from company directors on climate, was released the same day the Australasian Centre for Climate Responsibility (ACCR) blasted Woodside for continuing to push towards progressing its Scarborough project.
At the time of writing, the Woodside share price is $22.28, 1.27% higher than its previous close.
For context, the ASX 200 Index is up 0.3% this morning. Meanwhile, the S&P/ASX 200 Energy Index (ASX: XEJ) has gained 0.7%.
Let's take a closer look at the pressure that's faced Woodside this week.
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ACCR warns Woodside shareholders
Woodside – among other ASX 200 companies – has been the focus of investor scrutiny this week as the IGCC found that Australian company directors often don't treat climate change as a business risk.
Instead, IGCC found climate risks are generally viewed as compliance or reputational issues.
Additionally, ASX 200 boards often underestimate the pace of technology and innovation when it comes to decarbonisation.
IGCC released its report on Monday – the same day ACCR condemned Woodside's decision to sell 49% of Pluto Train 2.
Pluto Train 2 is set to service the Scarborough project and will now be operated as a joint venture.
ACCR director of climate and environment Dan Gocher commented on the sale, saying:
Before the ink is even dry on the Glasgow Climate Pact, Woodside has hit the accelerator on the single largest new fossil fuel project in Australia in recent memory.
Woodside falsely claims that LNG supplied from Pluto "will assist [its] customers to achieve their decarbonisation goals". This is a blatant lie, it is misleading and deceptive. The extraction, processing and distribution of gas releases fugitive methane emissions which have been found to be as detrimental to climate change as burning coal.
Gocher urged Woodside investors to demand the company explain why it's pushing to continue with the project. Particularly, as he said Carbon Tracker determined that Scarborough isn't compatible with limiting warming to 2.7°C.
For context, COP26 saw nearly 200 countries committing to limiting warming to 1.5°C.
Gocher continued:
The Scarborough project is a climate disaster, a climate investment risk, and investors must attempt to stop it from going ahead.
Woodside has implemented numerous decarbonisation targets.
It plans to cut emissions by 15% of its 2016-2020 base line scope 1 and 2 emissions by 2025. It's also targeting a reduction of 30% by 2030 and plans to reach net zero emissions by 2050.
