how TotalEnergies’ wayward shareholders are urging the company to greenen its goals

Seventeen minority shareholders and the Follow This association presented a resolution at the oil group’s general meeting, scheduled for Friday, asking Total to adopt more ambitious targets to fight global warming.

“Today it is urgent to act” for the climate. The person who spoke to franceinfo in early May is not a member of an NGO fighting global warming. No, Bertille Knuckey is a manager for Sycomore Asset Management. Together with 16 other investors and the Follow This association, this asset manager presented a resolution asking TotalEnergies to review its climate targets. The text will be put to the vote in the general meeting of the oil major, scheduled for Friday 26 May.

“TotalEnergies, through its activity, contributes strongly to global warming”, points out Bertille Knuckey. According to her, the group’s climate strategy, amended in March, is “far off the mark compared to the effort that should be made today”. Concretely, the resolution asks TotalEnergies to align its 2030 goals for the reduction of greenhouse gas emissions, the driver of global warming, with the Paris Agreement.

In a company’s carbon footprint, these emissions are divided into three categories, called “scopes” 1, 2 and 3. The first corresponds to those it directly controls. The second to those relating to its energy consumption. And the latest to the greenhouse gas emissions generated upstream of its business by its suppliers and downstream by its customers. The resolution studied on Friday is aimed in particular at this scope 3, which corresponds mainly for TotalEnergies to the emissions produced by the company’s customers by consuming its oil and gas. For the group, these indirect emissions accounted for 90% of its carbon footprint in 2022 (PDF, page 300).

Medium-term goals, a crucial step

“Their focus on this area is not precise and ambitious enough. They have given a very wide range”, argues Guillaume Lasserre, deputy general manager of La Banque Postale Asset Management, one of the investors supporting this resolution. In the climate plan updated in March by the oil group, the company pledged to emit less than 400 million tonnes of CO2 equivalent (CO2eq) by 2030 for its scope 3, which was 389 million tons of CO2eq in 2022. “If it is close to 400 million tonnes, we don’t see how this can be in line with the goals of the Paris Agreement”asks Guillaume Lasserre.

For Follow This, the Dutch NGO that formed this coalition of rebel investors, insisting on medium-term emission reduction targets seems crucial. “We fear a little that the carbon neutrality goals in 2050 [un engagement de TotalEnergies] be used as a diversion from relevant medium-term actionsfears McKenzie Ursch, the NGO’s legal director. If we don’t start drastically reducing our emissions in the next decade, the goal of limiting global warming to +1.5°C [l’objectif le plus ambitieux de l’accord de Paris] is lost.”

TotalEnergies asks to vote against

TotalEnergies has accepted that this resolution, which is purely advisory, will be placed on the agenda of its general meeting. For the company, the risk is above all media and symbolic. A high score during the vote would show that some of its shareholders disapprove of its climate strategy, which has already been criticized by environmental organizations.

The oil and gas giant is therefore calling for a negative vote. “The proposed resolution does not provide a credible response to the challenges of climate change and would be contrary to the interests of the Company, its shareholders and its customers”writes the company in a press release, considering what its strategy is “coherent and efficient to be protagonists of the energy transition”. He refuses to be “responsible” of emissions from included products “the use is the decision of its customers”.

A topic that makes McKenzie Ursch smile. “I wonder what you could do with a barrel of oil but burn it” and emit greenhouse gases, jokes the head of Follow This. More seriously, he notes that TotalEnergies, like other oil companies, has set itself targets on the famous scope 3. “They have already assumed this responsibility, they just need to do more”hammer.

“It is not a delusion of a few small management companies”

Can the bearers of the resolution win their case at the general meeting on Friday? In 2020, a first version had obtained 16.8% of the votes in favour, denounced at the time The echoes (item paid). In 2022, another binding resolution had not been placed on the agenda by TotalEnergies, which considered it to be detrimental to the prerogatives of the board of directors. The 2023 text is advice to avoid this pitfall.

“Obviously we want the majority, but that’s not necessarily the starting point, acknowledges McKenzie Ursch. Visible support from a minority would send a clear signal to the company that it needs to change course.”. Active with other oil groups, such as BP or Shell, Follow This has seen companies “begin to change” 10 to 15% of the votes on similar resolutions. Guillaume Lasserre hopes he receives more votes than the 1.4% of the shareholders who submitted it: “PFor us, it is a success if the company realizes that it is not a trend of a few small management companies, but a fundamental theme, which it will have to take into account”.

Bertille Knuckey wants to believe that the “dynamic” is livelier this year than in 2020 or 2022. He mentions the mobilization of some associations, which are demanding Chirping to the block of the general meeting, and the rostrum, in The world, scientists from the Intergovernmental Panel on Climate Change (IPCC), urging shareholders to vote against the company’s climate strategy.

An approach acclaimed by environmental NGOs

Holders of the dissenting resolution we consider this lever useful in the fight against global warming. “Oil companies will play an important role in the transitionwants to believe McKenzie Ursch. They have the capital and technological expertise to make the necessary investments and achieve the energy transition.” “Our weight in capital is quite low, yet we manage to trigger this difficult discussion, which involves transformations of society”observes Guillaume Lasserre.

At Friends of the Earth, an NGO engaged in a frontal fight against TotalEnergies and its Eacop-Tilenga oil project in East Africa, Lorette Philippot finds “completely helpful” That “Investors say the same thing about scientists and NGOs”. Baraka Lenga, Tanzanian opponent of the controversial Eacop-Tilenga project, sees in this vote a way to “putting pressure on TotalEnergies to stop” the construction of this pipeline and these production wells. Lucie Pinson, director of Reclaim Finance, an NGO specializing in financial and climate issues, sees in these resolution documents “interesting tools in the hands of shareholders”, provided to be “integrated into a more global strategy. Once you have voted once, twice, three times you have to disinvest because there is nothing more to expect from the company.”she believes.

A decision made by La Banque Postale Asset Management for American oil companies. “We got out because the discussion was very difficult”, explains Guillaume Lasserre. The financier “remain convinced” rather than a dialogue “serene” it is possible with TotalEnergies, which considers “one of the best students” among oil companies.

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