Woodside Petroleum's annual results, with a $US4.028 billion net loss for 2020, are food for thought for super funds, according to divestment activists.
Several of Australia's largest super funds have significant holdings in Woodside. It appears in the top 20 Australian equities investments of $100 billion government fund QSuper and Hostplus has a holding of approximately $88.4 million in the company.
Woodside also appeared in UniSuper's top 20 holdings in Australian shares as of the end of 2020, however, the fund has now committed to net zero absolute carbon emissions across its portfolio by 2050.
This brings UniSuper in line with the Paris Agreement and with some of the largest super funds including AustralianSuper, Aware Super, HESTA, Rest and Cbus - all of which have committed to reach net zero by 2050 and/or divest thermal coal.
|Sponsored by AIA Australia|
Our new income protection cover Starting a new conversation
The results were preceded by criticism from the Environmental Defenders Office (EDO), which released a legal analysis criticising Woodside's climate-related risk disclosures.
"Woodside is exposed to a number of climate-related risks that, in our view, are not disclosed in accordance with the Task Force for Climate-related Financial Disclosures," the EDO said.
"Woodside's climate-related risks include the risk its carbon-intensive projects become stranded assets as countries strive to achieve the Paris Agreement's goal of limiting global average temperature increase to 1.5C or well below 2C above pre-industrial levels."
Market Forces executive director Julien Vincent told Financial Standard Woodside's results aren't a surprise, but they should still be food for thought for Australian super funds invested in the company.
"No one is going to be pleased. While I don't think there are a lot of surprises in the results, our concerns - and it should be the concern of super funds too - is that these losses will only continue, and possibly accelerate," Vincent said.
"Why do super funds, especially those who claim to care about climate change, think their capital is secure with Woodside?"
Market Forces has filed a resolution ahead of Woodside's annual general meeting, requesting that the company disclose information that demonstrates how its expenditure and operations will be managed in a manger consistent with the Paris Agreement.
"The decline in oil and gas use required to meet the Paris climate goals leaves Woodside exposed to rapidly shrinking markets. In 2020, Woodside's sales revenue mix was made up of LNG (75%), domestic gas (5%) and liquids (20%)," Market Forces said.