Investors to press TotalEnergies over climate goals

A prominent activist group and 17 other investors have filed a shareholder resolution calling on France’s TotalEnergies to do more to cut its emissions by 2030, a move that would imply rolling back some of its gas projects and investing more aggressively in renewable energy.

Dutch shareholder activist Follow This brought the motion ahead of Total’s shareholder meeting on May 26, echoing the pressure that the group is also looking to put on other big oil groups such as BP, Shell, Chevron and ExxonMobil.

Along with investors holding roughly 1 per cent of Total’s capital, the group is calling on Total to be more aggressive in its Scope 3 targets — the carbon produced when the product a company sells is burnt, and which makes up the bulk of all emissions from oil and gas groups.

In the resolution seen by the Financial Times, the investors said they considered that Total’s 2030 targets were not aligned with the ambitions of the Paris Climate Agreement, and the goal of keeping global warming well below 2 degrees Celsius above pre-industrial levels.

“The strategy is totally up to the board,” said Mark van Baal, the founder of Follow This. Ultimately, however, to align with Paris climate goals “we need them to offer renewable energy at scale”, he added.

“We’re dealing with companies that don’t want to change. Of course, they want to invest a bit in renewable energy but the bulk is in fossils fuels, and they want to remain oil and gas companies as long as possible,” he said.

TotalEnergies has forecast that its Scope 3 emissions would stand at less than 400mn tonnes CO₂ equivalent (CO₂) by 2030. But this compares to 389mn tonnes CO₂ equivalent last year, meaning they will barely drop in the coming years.

The group has defended its stance saying it was keeping this goal while increasing its energy production and was pivoting more towards gas, a fuel that was replacing more polluting coal in the world. It also has a goal to reduce Scope 3 emissions from its petrol products by more than 30 per cent in 2030 compared to 2015.

The company had no immediate comment on the resolution, which would not be binding.

Total increased its yearly investment budget in clean energy projects to more than $5bn for this year from more than $4bn previously, although most of its $16bn-$18bn investments are dedicated to other areas, including oil.

“The first thing we’d like to see [from Total] would be to reduce investments in new oil and gas projects,” said Bertille Knuckey, portfolio manager at Sycomore Asset Management, one of the investors behind the motion along with Edmond de Rothschild, Mandarine Gestion and La Banque Postale.

Last year, Follow This’s attempt to put forward a binding climate resolution was blocked by Total. The company put forward its own climate motion, which was rejected by 11 per cent of investors.

In 2020, a previous climate motion led by French asset manager Meeschaert pressing Total to do more on emissions won backing from 17 per cent of investors.

Support for climate motions put forward at other oil majors last year stalled and even slipped after growing momentum in recent years. Some major investors said resolutions had become too prescriptive.