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Santos to face more climate resolutions at AGM

03 Feb 2021 11:06 AM | Sonia Harvey (Administrator)

SANTOS has defended the scope of its decarbonisation plans as activist shareholders lodge a resolution to compel to disclose how it will align itself with the goals of the Paris Agreement.

The resolutions, put to Santos by Market Forces,  will be put to a vote when shareholders meet on April 15. 

Market Forces is a group that purchases shares in major coal, oil and gas companies in order to sway shareholders to vote on climate and decarbonisation-related resolutions. 

The resolution first urges for an amendment to the company's constitution to provide that members can pass advisory resolutions in relation to the exercise of powers vested in the board.

It is the third year in a row the activist group has brought a resolution of this nature before the AGM. 

Previous moves were also made against Woodside and Origin Energy. While their motions have failed thus far, the vote of support has been growing each year. 

This would allow shareholders to pass the second resolution which would force Santos to disclose information that demonstrates how the company's capital expenditure and operations will be managed in a manner consistent with the climate goals of the Paris Agreement. 

This would include production guidance plans for the lifetime of oil and gas assets, capital expenditure plans for decommissioning and rehabilitating asset sites and how employees of the company will be informed of asset closures and employee transition plans. 

"The constitution of Santos is not conducive to the right of shareholders to place advisory resolutions on the agenda of a shareholder meeting," The resolution's supporting statement reads, citing examples in the UK, where shareholders can consider resolutions seeking to explicitly direct the conduct of the board. 

It also noted that at last year's AGM, 43% of shareholders voted in favour of a proposal that Santos disclose scope 1, 2 and 3 emissions targets, and exploration and capex plans aligned with Paris.  BROUGHT BY ACCR?

In a statement, Santos noted it has already declared it intends to reach net-zero emissions across Scope 1 and 2 emissions by 2040, highlighting the resolutions have been requisitioned by a group representing less than 0.01% of Santos' shareholders. 

"Santos does not intend to close down its oil and gas operations, as doing so would be against the interests of shareholders and would not be consistent with global climate and human development goals, particularly reducing air pollution and poverty," the company said. 

Santos announced late last year that rather than pivot to electricity as other majors have, it would focus its attention to emissions-offset LNG, hydrogen and carbon capture and storage technology to reach its net-zero emissions target. 

Santos CEO Kevin Gallgher told shareholders he was confident the company would soon hit the federal government's "H2 under $2" stretch goal laid out in its Technology Investment Roadmap. 

It is developing its proposed Moomba CCS Project in the Cooper Basin aiming to store 1.7 million tonnes of CO2 per annum. 

"Santos is already working to align our business with the Paris Agreement's central goal to limit global temperature rise this century to well below 2 degrees Celsius above pre-industrial levels," it said. 

The Market Forces resolution, citing Carbon Tracker analysis, points to the company's Narrabri CSG Phase 1, Barossa LNG and Dorado Phase 1 projects, as being inconsistent with a 2C scenario, saying around US$12 billion of Santos' potential capex on upstream projects to 2030 would be stranded.

Source: Energy News Bulletin

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