Seventeen minority shareholders and the Follow This association tabled a resolution at the general meeting of the oil group, scheduled for Friday, asking Total to adopt more ambitious objectives to fight against global warming.
“Today, it is urgent to act” for the climate. The person who speaks thus to franceinfo at the beginning of May is not a member of an NGO fighting against global warming. No, Bertille Knuckey is a manager for Sycomore Asset Management. Along with 16 other investors and the Follow This association, this asset manager filed a resolution asking TotalEnergies to review its climate objectives. The text will be submitted Friday, May 26 to a vote at the general meeting of the oil major, which was disrupted in the morning by environmental activists.
“TotalEnergies, through its activity, contributes very strongly to global warming”, emphasizes Bertille Knuckey. According to her, the group’s climate strategy, modified in March, is “very far from the mark compared to the effort that would have to be made today”. Concretely, the resolution asks TotalEnergies to align its 2030 objectives for reducing greenhouse gas emissions, drivers 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 that it directly controls. The second to those related to its energy consumption. And the last to greenhouse gas emissions generated upstream of its activity 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 represented 90% of its carbon footprint in 2022 (PDF, page 300).
Medium-term objectives, a crucial step
“Their objective on this scope is not precise and ambitious enough. They have given a very wide range”, argues Guillaume Lasserre, deputy managing director of La Banque Postale Asset Management, one of the investors who support this resolution. In the climate plan updated in March by the oil group, the company is committed to emitting less than 400 million tonnes of CO2 equivalent (CO2eq) by 2030 for its scope 3, which was 389 million tonnes of CO2eq in 2022. “If it is close to 400 million tonnes, we do not see how this can be in line with the objectives of the Paris agreement”asks Guillaume Lasserre.
For Follow This, the Dutch NGO that formed this coalition of rebellious investors, insisting on medium-term emission reduction targets seems crucial. “We are a little afraid that the objectives of carbon neutrality in 2050 [un engagement de TotalEnergies] not be used as a diversion from the relevant actions in the medium termdreads McKenzie Ursch, legal director of the NGO. If we do not start to drastically reduce our emissions in the next decade, the objective of limiting global warming to +1.5°C [l’objectif le plus ambitieux de l’accord de Paris] is lost.”
TotalEnergies calls for voting against
TotalEnergies has accepted that this resolution, which is purely advisory, be placed on the agenda of its general meeting. For the company, the risk is above all mediatic and symbolic. A high score, during the vote, would show that some of its shareholders disapprove of its climate strategy, already criticized by environmental organizations.
The oil and gas giant is therefore calling for a vote against. “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 that its strategy is “coherent and efficient to be a major player in the energy transition”. She refuses to be “responsible” of emissions from products including “the use is the decision of its customers”.
An argument that makes McKenzie Ursch smile. “I wonder what anyone can do with a barrel of oil other than burn it” and emit greenhouse gases, quips the head of Follow This. More seriously, he observes that TotalEnergies, like other oil companies, has set itself objectives on the famous scope 3. “They have already taken on this responsibility, they just need to do more”he hammers.
“It’s not a delirium 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 favorable votes, reported then The echoes (paid item). In 2022, another binding resolution had not been placed on the agenda by TotalEnergies, which considered that it encroached on the prerogatives of the board of directors. The 2023 text is advisory to avoid this pitfall.
“Of course we want a majority, but that’s not necessarily the starting point, acknowledges McKenzie Ursch. Visible minority support would send a clear signal to the company about the need to change course.”. Active with other oil groups, such as BP or Shell, Follow This has seen companies “begin to change” from 10-15% of votes on similar resolutions. Guillaume Lasserre hopes that it will receive more votes than the 1.4% of shareholders who filed it: “PFor us, it is a success if the company realizes that it is not a fad of a few small management companies, but a fundamental subject, which it will have to take into account.”
Bertille Knuckey wants to believe that the “dynamic” is more buoyant this year than in 2020 or 2022. She cites the mobilization of certain associations, which are calling on Twitter to the blocking of the general assembly, and the tribune, in The world, scientists from the Intergovernmental Panel on Climate Change (IPCC), which urges shareholders to vote against the firm’s climate strategy.
An approach hailed by environmental NGOs
Holders of the dissenting resolution consider this lever of action 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 the technological expertise to make the necessary investments and make the energy transition.” “Our weight in capital is quite low, yet we manage to trigger this difficult discussion, which involves transformations of the company”notes 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 useful” that “investors say the same thing as scientists and NGOs”. Baraka Lenga, a Tanzanian opponent of the controversial Eacop-Tilenga project, sees this vote as a way to “put the pressure on TotalEnergies to stop” the construction of this pipeline and these production wells. Lucie Pinson, director of Reclaim Finance, an NGO specializing in finance and climate issues, sees in these resolution filings “interesting tools in the hands of shareholders”, on condition of being “integrated into a more global strategy. Once you have voted once, twice, three times, you have to divest because there is nothing more to expect from the company”she believes.
A decision taken by La Banque Postale Asset Management for American oil companies. “We got out of it because the discussion was very difficult”, explains Guillaume Lasserre. The financier “stay convinced” than a dialogue “serene” is possible with TotalEnergies, which he considers “one of the best students” among oil companies.