The company received another notice, as it has done for the past several years, from a group of 103 shareholders, representing 0.018% of the company's shares on issue, asking the May 4 annual general meeting consider two resolutions.

 

The first resolution is aimed at amending the company's constitution inserting a clause giving shareholders greater powers to use resolutions to express opinions and question directors' decisions.

 

It is the first attempt to enforce the Financial Stability Board's Task Force on Climate Change-Related Disclosures recommendations, which were released in December.

 

The second resolution specifically tackles climate change and Santos' plans for the world post-2035, and its planning and modelling of various climate scenarios, including both 1.5C and 2C pathways under the Paris Agreement.

 

The resolution aims to embed climate risks in the business and set public targets for addressing climate change.

 

Santos said it understood the resolutions have been promoted by Market Forces as part of its anti-fossil fuels campaign, and said it respected the right of shareholders to requisition the resolutions, however, the board believes the resolutions are not in the interests of the company and will explain why it will not support then later this month. 

 

Market Forces said a vote would provide an important opportunity for Australia's asset management sector, including our massive superannuation industry, "to walk the walk when it comes to managing climate change and its associated risks".

 

The divestment group said Santos was the nineteenth worst emitter in Australia, and that investors deserved to see greater climate risk disclosure so they could better judge how the Adelaide-based oiler was transitioning to a low carbon economy.

 

"Despite former CEO David Knox signing on to a joint business CEO statement in support of the Paris negotiations in late 2015, the company has failed to follow through with action to bring its business into line with the Paris Agreement's aims," the group said.

 

It argues plans to develop a controversial CSG project in the Gunnedah Basin, which could meet 50% of New South Wales' gas needs, was "clearly at odds with its pledge to support policy to keep the world well below 2C of warming".

 

Market Forces said the call by the Australian Prudential Regulatory Authority to describe climate risks as "distinctly financial in nature" and "foreseeable, material and actionable" supported its calls to keep investors fully informed. 

 

"APRA's recent warning builds on a legal opinion released in late 2016 by Noel Hutley, which states that company directors who don't properly consider climate related risks could be personally liable for breaching their duty of due care and diligence," Market Forces said.

 

In 2016, more than 160 climate-related shareholder resolutions were filed in the US and Europe, and similar numbers are expected this year. 

 

While European oilers are gradually increasing climate change reporting, US investors at the biggest oilers have routinely rejected transparency mechanisms.

 

In Australia only AGL Energy and BHP Billiton have disclosed scenario analyses.

 

The bid for greater climate accountability came on the same day the Commonwealth released its five-yearly State of the Environment report, which warns that heritage and economic activity are being affected and that the damage from climate change could be irreversible.

 

"While carbon emissions per capita have declined from 24.1 tonnes in 2011 to 22.2 tonnes in 2015 and energy efficiency improvements are reducing electricity demand, the report makes clear that, for the world to meet its Paris goals, there is much more to do," Energy Minister John Frydenberg said this morning.

 

The report is critical of Australia's lack of an overarching national policy that establishes a clear vision for the protection and sustainable management of Australia's environment to the year 2050.