Woodside Energy

Woodside has set targets to reduce absolute scope 1 and 2 emissions by 15% by 2025 and by 30% by 2030 compared to the company’s 2016-2020 gross average annual emissions. The company should disclose the proportion of each target that will be met through direct action, rather than including offsets. Emissions from the use of Woodside’s sold products account for the majority of the company’s emissions, yet the company has not set a target to reduce these emissions. It should set a target covering the entire lifecycle emissions of its products to successfully transition to a low-carbon future.

Woodside’s capital expenditure (CapEx) for low-carbon technologies in 2022 was 2% of its overall CapEx. The company aims to raise this investment to 11% of its overall CapEx over the next five years. This is significantly lower than the sectoral expectation which indicates that companies should invest 77% of CapEx in low-carbon projects to align with a 1.5°C scenario. Woodside can improve its performance on material investment by significantly increasing its current CapEx share allocated to low-carbon technologies, including carbon removal technologies.

Woodside plans to invest USD 8 million between 2023 and 2025 in Monash University to research large-scale solar, direct air capture and biochemical waste gas conversion projects. However, it does not disclose its overall research and development (R&D) investment or its low-carbon R&D spending. Woodside should disclose its R&D expenditure to demonstrate its level of alignment with the sectoral expectation for a 1.5°C scenario.

The company’s past and projected reductions in scope 1, 2 and 3 emissions intensity and the lifecycle emissions per unit of energy indicate it is not on track to decarbonise at the rate required by the 1.5°C scenario. Woodside has slightly reduced the emissions intensity of its sold energy products. However, with no increase in the proportion of low-carbon products in its sold product mix, the company remains completely out of step with the changes required to limit global warming to within 1.5°C. Woodside is projected to exceed its scope 3 carbon budget by over 70%.

Woodside aims to reduce its scope 1 and 2 emissions by 15% by 2025 and by 30% by 2030 compared to the company’s 2016-2020 gross average annual emissions. While the use of Woodside’s sold products account for the majority of the company’s emissions, the company has not set a target to reduce its scope 3 emissions. The company also does not have any targets beyond 2030 and its current targets appear to include an undisclosed reliance on offsets.

Woodside aims to reach its targets by focusing on solar power, synthetic fuels and hydrogen, including green hydrogen. It aims to explore CCU for carbon-to-product technologies and CCS in both saline formation and depleted oil and gas reservoirs. Further, it aims to allocate USD 8 million to low-carbon technology R&D, including direct air capture. It plans to invest 11% of its CapEx in low-carbon technologies between 2022 and 2027. However, this is significantly lower than the sectoral expectation which indicates that companies should invest 77% of CapEx in low-carbon projects to align with a 1.5°C scenario.

Woodside is optimising its own operations and improving its energy efficiency. The company is also investing approximately 2% of its CapEx in low-carbon technologies such as hydrogen production, solar power and CCU. However, the company does not disclose its total R&D investment for low-carbon solutions. At present, Woodside does not have low-carbon products in its portfolio and does not offer any energy efficiency services to its clients.

Between 2017 and 2022, Woodside’s scope 1 and 2 emissions intensity decreased slightly and is projected to remain stable between 2022 and 2027. For its scope 3 emissions, the company is projected to overshoot its 1.5°C carbon budget by over 70% by 2050. The company is required to annually decrease its scope 1 and 2 emissions intensity by nearly 8% and its scope 1, 2 and 3 emissions intensity by nearly 4% to align with its 1.5°C pathway.

Despite Woodside’s planned green hydrogen production, solar power generation, synthetic fuels, CCU and CCS business activities, the company has a significantly limited CapEx allocation to low-carbon technologies. This, in conjunction with the company’s lack of a scope 3 emissions reduction target or targets beyond 2030, makes it unclear whether and how the company intends to align with its 1.5°C pathway. Woodside’s current targets are also heavily undermined by its reliance on offsets.

The company discloses the steps it takes to engage with stakeholders on a just transition. However, no evidence was found of the company’s commitment to social dialogue or of the categories of stakeholders the company engages with on a just transition. No evidence was found of the company undertaking just transition planning to mitigate the social impacts of the low-carbon transition on workers, affected stakeholders and its business relationships. Additionally, no evidence was found to demonstrate the company’s engagement in social dialogue and with stakeholders in just transition planning.

The company discloses the actions it takes, including partnerships with others, to create jobs in local communities. However, no public commitment by the company was found stating its intention to create and support access to green and decent jobs as part of the low-carbon transition. Moreover, no evidence was found of the company’s action to promote these jobs in a way that ensures gender balance and inclusion of vulnerable groups. Additionally, no relevant disclosure was found of the company’s assessment of employment dislocation risks. The company has a commitment to re- and up-skill workers and stakeholders affected by the low-carbon transition and discloses the actions it takes in this regard. For instance, it contributes to training programmes for indigenous communities and students and provides training for staff. However, no relevant disclosure was found of the company embedding equality of opportunity for women and vulnerable groups in these actions. Furthermore, no evidence was found of the company having a process for identifying skills gaps for workers and affected stakeholders or a public commitment to help workers displaced by the transition to re- or up-skill.

No relevant disclosure was found to show if the company identifies impacts of the low-carbon transition on social protection for workers and affected stakeholders, nor how it contributes to social protection. Additionally, no evidence was found that the company expects its business relationships to contribute to the social protection of their workers and affected stakeholders. No relevant disclosure was found to show how the company identifies any misalignment of its lobbying activities with policies and regulations that support the just transition, nor of the measures it takes to address misalignment. Furthermore, no evidence was found that the company lobbies for policies and regulations for green and decent job creation; retention, education and reskilling; and social protection for workers.

The company commits to respecting human rights. Furthermore, the company discloses a human rights due diligence process that includes the identification and assessment of human rights risks, such as labour rights, which include the risk of exploitative labour practices and risks to freedom of association and collective bargaining. Additionally, the company has a grievance mechanism available to workers and external stakeholders.

The company commits to respecting the health and safety of its workers and expects the same commitment of its business relationships. Additionally, the company discloses some information on workforce diversity. However, the company can strengthen its performance and disclosure on other key decent work issues, including the provision of secure, safe and healthy workplaces, where workers are fairly renumerated and have a meaningful say in decision-making.

The company commits to protecting personal data and discloses a privacy statement regarding use of personal data. Additionally, the company discloses its global tax strategy. However, no relevant disclosure was found of the corporate income tax it pays in each relevant jurisdiction. The company has a policy prohibiting bribery and corruption. However, no relevant company disclosure was found on the topic of lobbying and political engagement.