Will shareholders push Total to be more virtuous on its CO₂ emissions? A coalition of investors intends to table a resolution at the general meeting of shareholders of the TotalEnergies group, on May 26, asking the company to be more responsible on the climate plan. Led by the shareholder activism organization Follow This, this purely consultative resolution calls for “an alignment of the existing reduction targets for 2030” with those of the Paris agreement, adopted in 2015, aimed at limiting global warming below two 2°C. In all, the proposal brings together 17 investors, including La Banque Postale AM, Edmond de Rothschild AM, La Financière de l’Echiquier, Mandarine Gestion and Sycomore AM, who together manage 1,007 billion euros and hold 1.5 % of business.
The core of this resolution concerns so-called “scope 3” emissions. This formula groups together the CO₂ emissions resulting from the use of TotalEnergies products by its customers. So far, the firm has not communicated specific targets for reducing these emissions by 2030, considering in particular that they are not its responsibility. In its 2023 climate plan, the group nevertheless reports that the carbon footprint of the energy products (oil, gas, etc.) used by its customers amounted in 2022 to 389 million tonnes of CO₂ equivalent. While these emissions do represent a drop from 2015 (410 million tonnes of CO₂, according to the company), TotalEnergies’ forecast of simply remaining below 400 million tonnes in 2025 and 2030 augurs stagnation at best. or, at worst, a slight increase in carbon emissions from this tranche.
weight support
“To reduce scope 3 emissions, there are not a lot of solutions: oil and gas production must be reduced. Yet Total still plans today to produce ever more oil and gas, which goes against the recommendations of scientists”, retorts Lucie Pinson, founder and director of the NGO Reclaim Finance, promoting the divestment of fossil fuels. Among its investment expenditures by 2030, Total plans to devote “a third to low-carbon energies, around 30% to the development of new oil and gas projects, the rest going to the maintenance of the hydrocarbon portfolio”.
Will this speech be heard on May 26? If the Follow This motion has been added to the agenda, TotalEnergies has recommended that its shareholders vote against it, judging that the initiative is “contrary to the interests” of the French hydrocarbon company, “of its shareholders and its customers. The group proposes instead to vote in favor of its climate strategy, via its advisory resolution “Sustainability & Climate 2023 Progress Report (sustainable development and climate progress report 2023)“.
In 2020, Follow This, the origin of the first binding climate resolution for the company, had garnered 17% approval. It is therefore difficult to imagine that activist shareholders will win a majority of the votes this year. But they can count on strong support: that of the influential consulting agency Institutional Shareholder Services (ISS), which recommended supporting the resolution of Follow This. This organization studies company documents and offers voting recommendations at general meetings for its shareholder or investor clients. According to a note consulted by the FinancialTimesISS thus underlines that “the resolution proposed by the shareholder has merit, because it underlines the fact that information is missing to be sure that the objectives of scope 3 follow the trajectory of the Paris agreement”.
Ambiguity of some shareholders
Some investors have already declared that they would vote against TotalEnergies’ climate strategy. On May 16, during a debate organized by the Climate Academy, Vincent Damas, director of social and environmental responsibility (CSR) at CNP assurances, announced that he would support the motion of Follow This because of the intention displayed by the group to develop new oil projects.
In the past two years, the insurer had already voted against the French oil company’s climate strategy. But, before influencing the environmental strategy of TotalEnergies, the fight is likely to be long. Despite around 20% of votes in favor of the motion tabled in 2020 by Follow This, the major’s climate strategy had been adopted by all shareholders by nearly 92% in 2021 and 89% in 2022. A sign that part of the shareholders support both the motion of opposition and that proposed by the company.