How Woodside shares can 'thrive through the energy transition'

Woodside is taking concrete steps to address its role in the global energy transition.

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Woodside Energy Group Ltd (ASX: WDS) shares are down 0.9% during the Tuesday lunch hour.

Shares in the S&P/ASX 200 Index (ASX: XJO) energy stock closed yesterday trading for $29.44. At the time of writing, shares are changing hands for $29.18 apiece.

For some context, the ASX 200 is up 0.1% at this same time.

Woodside could be facing some additional headwinds with lower expectations for global growth, particularly in China, potentially dampening shorter-term energy demand.

Brent crude oil is currently trading for US$82.38 per barrel, down from US$82.50 last night, according to data from Bloomberg.

Here's how the oil and gas company is addressing shareholders' concerns over climate change and how it will respond to the global energy transition.

Woodside shares can adapt to new energy demands

Commenting on the company's Climate Transition Action Plan (CTAP) that's intended to steer Woodside shares profitably through the energy transition, CEO Meg O'Neill said

"I firmly believe Woodside is built to thrive through the energy transition and our Climate Transition Action Plan shows how we plan to achieve this."

O'Neill continued:

Our climate strategy is integrated throughout our corporate strategy as we provide the energy our customers need today and into a lower carbon future, create and return value to shareholders, and conduct our business sustainably.

Woodside's CTAP was released last month, on 27 February. It outlines the company's potential pathway to net zero Scope 1 and 2 net equity emissions by 2050.

It also introduced a new Scope 3 target to take final investment decisions for five million tonnes of CO2 equivalent abatement capacity per year. New Scope 3 abatement target will track the impact of new energy products on customers.

That come atop Woodside's existing target to invest $5 billion in new energy products and lower carbon services by 2030.

O'Neill said the CTAP highlights, "Woodside's confidence in a sustained role for natural gas through the energy transition, while providing additional information on our plans and progress to reduce net equity Scope 1 and 2 emissions and to invest in new energy products and lower carbon services for the transition."

The company said that while there is no single or certain pathway through the energy transition, "Diversification and adaptation will be central to the competitiveness of successful energy businesses."

Woodside shares are down 7% year to date despite an uptick in crude oil prices.

If you're looking to invest in energy shares or any other ASX stock, remember to do your research first. Or seek out professional advice.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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