Mar 29, 2011 - 7:00pm
Woodside Petroleum has failed to table the Climate Advocacy Fund’s first, preferred shareholder resolution asking it to disclose its carbon price assumptions, Australian Ethical Investment and The Climate Institute said today.
Instead, Woodside has obliged the Climate Advocacy Fund to opt for a second type of resolution that would require a change to the company’s constitution.
“Once again, companies at great risk from climate change are forcing shareholders to take alternative courses of action,” said Julian Poulter, The Climate Institute’s Business Director.
“This is another major Australian company showing it doesn’t believe climate change disclosure is shareholder business,” said James Their, Executive Director, of Australian Ethical Investment.
The resolution will be put to the Woodside AGM on 20 April 2011. It requires a 75% shareholder vote and asks Woodside annually to disclose the carbon price assumptions it uses in its assessment of new and ongoing capital expenditure.
“Three years ago markets collapsed because of highly optimistic investment assumptions. Now optimistic assumptions are being used over again but in a different sector. It is time for regulators to act to prevent a repeat of the sub?prime crisis, this time a ‘sub?clime’ crisis,” said Mr Poulter
Woodside’s recent sustainability report addresses the content of the resolution by stating “…like other companies, we do not publicly release information on economic assumptions”. However, Woodside stated in a letter to Australian Ethical Investment its base case assumption in evaluating major projects is that there will never be a carbon price, or if there is one the company will receive compensation in perpetuity for the impact of a price.
“It is not credible for a company to claim it has unique insight into future carbon markets and assume a zero carbon price for the indefinite future when they know that prudent investors are expecting the risk of a higher carbon price to be managed,” said Mr Poulter.
“Shareholders will be left carrying the can when carbon prices rise and the value of emission intensive companies fall. It is an inevitable scenario that some directors are conveniently ignoring.”
According to leading global investment adviser Mercer, investors and companies should be factoring in a carbon price of between $110 and $220 per tonne by 2030.
Mr Thier said: “It is time for Woodside to inform shareholders what their business looks like under those carbon price conditions. The projects they are using investor capital for are scheduled to last way beyond 2030 - the simple question is are they viable with carbon pricing?”
Last year the Climate Advocacy Fund launched four shareholder resolutions. The first two were not tabled at the AGMs but still resulted in increased climate risk disclosure commitments from Aquila Resources and Paladin Energy.
For further information:
Julian Poulter | Business Director, The Climate Institute |
James Their | Executive Director, Australian Ethical Investment |