(Reuters) -Activist shareholders called out Australian oil and gas explorer Santos’ growth plans due to climate risks, demanding action against future upstream investment, management remuneration and sought increased focus on shareholder returns.
Market Forces, an activist investor group, filed a statement on Thursday on behalf of 100 shareholders urging all Santos’ investors to vote against its remuneration report, which has already received its “first strike” at its annual general meeting when 25.3% shareholders opposed it.
“Santos’ rampant pursuit of new fossil fuel production, sanctioned by the board and incentivised with big executive bonuses, represents an abject failure of corporate governance,” said Will van de Pol, acting executive director at Market Forces.
A Market Forces analysis revealed Santos’ increasing oil and gas production plans were likely to see its total emissions increase by 40% from 2022 to 2030, with Woodside Energy also projecting to emit 40% more from 2022 to 2027.
“We urge all investors to address the climate risk failures of Santos and Woodside boards at the upcoming general meetings,” van de Pol said.
Separately, London-based activist investor group Snowcap in a letter to Santos called for an overhaul of its “misguided and reckless” growth strategy and advocated for reforms that it claims could increase value for shareholders by as much as 50%.
Santos has committed to $7 billion of new growth projects since 2021 and has another $6 billion of potential spending targeted for final investment decisions, which represents “by far the most aggressive upstream capex plan” in the sector, Snowcap’s letter stated.
“The result has been a drastic underperformance in Santos’ stock price.”
Santos did not immediately respond to a Reuters request for comment. Shares of the firm were up 1.2% as at 0226 GMT, while Woodside shares traded 0.9% higher, against a flat-to-high ASX 200 index.
(Reporting by Riya Sharma and Sameer Manekar in Bengaluru; Editing by Rashmi Aich)