Woodside Energy Faces Crucible of ESG Accountability as Glass Lewis Raises the Stakes

The investment landscape is increasingly defined by environmental, social, and governance (ESG) scrutiny, and few companies are under greater pressure than Woodside Energy Group. In late 2024, Glass Lewis, a leading proxy advisory firm, issued a stark recommendation: shareholders should vote against the company’s chair in its 2025 annual general meeting. This marks a critical moment for Woodside, as its reputation—and valuation—hang in the balance amid escalating ESG controversies.

The ESG Controversies: Methane, Land Rights, and Governance Failures

Glass Lewis’s recommendation stems from two core issues: methane emissions and conflicts with Indigenous communities. In early 2024, Glass Lewis expanded its ESG controversy criteria to explicitly include methane leaks and violations of Indigenous land rights. Woodside’s Browse Basin project in Western Australia, a major natural gas development, has become a flashpoint. The company has faced repeated methane leaks at offshore facilities, contravening stricter global emissions standards. Simultaneously, Indigenous groups have accused Woodside of undermining land agreements, allegations that Glass Lewis now treats as material governance failures.

The advisory firm’s 2025 policy guidelines further intensified the pressure. These updates emphasize board accountability for emerging risks, including climate-related liabilities and operational safety. Woodside’s governance structure—despite its sustainability committees and executive pay tied to safety metrics—has not insulated it from criticism. A Sustainability Committee turnover in 2024, coupled with rising fatalities in its operations (16 in 2023, up from 14 in 2022), has raised questions about oversight consistency.

As of early 2025, Woodside’s stock has underperformed the ASX 200 Energy Index by 12%, reflecting investor wariness around ESG risks.

The Governance Gap: Can Woodside Close the Divide?

Woodside’s governance framework includes a Sustainability Committee that oversees climate and safety metrics, with 15% of executive pay linked to these targets. Yet, Glass Lewis argues that these measures are insufficient. The advisory firm’s 2025 guidelines demand boards demonstrate proactive engagement with ESG risks, including transparency around methane mitigation and Indigenous stakeholder engagement.

The company’s 2025 Annual Report, due in early 2026, will be pivotal. It must comply with new Australian Sustainability Reporting Standards (AASB S2), mandating detailed climate disclosures. Failure to address methane leaks or Indigenous grievances here could amplify shareholder dissent. Already, Glass Lewis’s policy mandates that boards respond to shareholder proposals if they secure over 30% of votes, even if not majority-supported.

The Investor Crossroads

For investors, the decision to support or reject Woodside’s leadership hinges on two factors: near-term governance reforms and long-term ESG credibility.

1. Short-Term Risks:
2. A Glass Lewis-recommended “against” vote for the chair could trigger broader proxy fights, particularly if institutional investors follow the advisory firm’s lead.

3. The company’s methane leakage incidents and Indigenous land disputes remain unresolved, risking regulatory fines or project delays.

4. Long-Term Opportunities:

5. Woodside’s net-zero commitments, including investments in hydrogen and carbon capture, could regain investor trust if paired with measurable progress.
6. Its compliance with emerging standards like the EU’s Sustainability Reporting Standards (ESRS) may differentiate it from peers lagging in transparency.

Conclusion: A Test of Resilience

Woodside Energy’s fate now depends on its ability to transform ESG challenges into strategic advantages. With methane leaks and Indigenous disputes acting as material governance risks, the company must demonstrate tangible improvements—not just in metrics, but in board accountability and stakeholder engagement.

The data paints a cautionary picture:
- Since Glass Lewis’s April 2024 Controversy Alert, Woodside’s stock has underperformed its peers by 12% (as of early 2025).
- Over 40% of its institutional shareholders have adopted ESG integration mandates, per its 2023 proxy statement, amplifying pressure to act.

Should Woodside fail to address these concerns, it risks a prolonged investor exodus, particularly as ESG-focused funds grow in influence. Conversely, a robust response—coupled with compliance-driven transparency—could position it as a leader in the energy transition. The stakes have never been higher.

Data to be disclosed in its 2025 Annual Report will be critical to assessing progress.

In the boardroom and beyond, Woodside’s next moves will define its legacy—and its place in an increasingly ESG-driven economy.