New legal analysis by EDO lawyers raises serious questions about gas giant Woodside Petroleum Ltd’s climate-related risk disclosure.  

The latest report from our new corporate and commercial law team, commissioned by the Conservation Council of Western Australia, suggests Woodside is exposed to a number of climate-related risks that have not been specifically and comprehensively disclosed in accordance with industry best practice.  

Read the full report, Woodside’s disclosure of climate-related risks, here.  

Disclosure of climate risks is critical to investors being able to assess the viability of their investment, and their financial and reputational exposure. 

A lack of information leaves companies and investors vulnerable to major losses.  

An example of Woodside’s climate-related risks is that its carbon-intensive gas projects becoming stranded assets as countries strive to achieve the Paris Agreement’s goal of limiting global average temperature increase to 1.5°C or well below 2°C above pre-industrial levels.  

As detailed in the report, Woodside’s ‘Burrup Hub’ projects are prime candidates for becoming stranded assets during their expected lifetime. If they become operational, these projects would be Australia’s largest greenhouse gas (GHG) pollution source.1 This makes them particularly vulnerable to carbon pricing mechanisms and growing market concern about the sustainability of GHG-intensive processes and products. However, in our view, Woodside’s disclosure of this risk is currently not specific and complete.   

Woodside has foreshadowed that its 2020 Annual Report and related financial reporting will contain further disclosure of its climate-related risks. These are scheduled for release on Thursday, 18 February 2021. We and our client will be watching with interest. 

Find out more on our new, expert corporate law team here. 

1 Urgewald, Five Years Lost: How Finance is Blowing the Paris Carbon Budget (Report, December 2020) 54.

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