While shareholders are increasingly inclined to use their voting rights to influence company decisions, it was not until 2020 that a first resolution on climate change was tabled in France at the Annual General Meeting of Total SE. This historic resolution sent a strong signal to the French oil and gas major and constituted a real gamechanger: it will be the first of many.

Shareholders have long been silent in the face of Total’s devastating activities and wait-and-see approach to the climate emergency. Few have dared to confront its CEOs on their development strategy. The first attempt at a resolution in 2011, at that time on tar sands, was aborted before the general meeting, in all probability because of threats and pressure from the company – then led by Christophe de Margerie – against its shareholders. After years of fruitless discussions, 11 shareholders decided in 2020 to put an end to this pact of silence.

But while climate resolutions are gaining ground, another initiative has risen that may well stall this momentum: the Say on Climate. This initiative, from the British hedge fund TCI – The Children’s Investment Fund – consists of asking companies to commit to submit their climate strategy to their shareholders for a vote every year. This may seem like a clever idea—freeing shareholders from the obligation of organizing themselves to table a new resolution every year.

But if the Say on Climate has an interest in pushing companies absent from the climate debate, operating in weak or non-existent regulatory contexts on climate issues, this is not the case in France and Europe. In the case of Total, a Say on Climate is at best a distraction, and at worst, a diversion.

Total SE, a company from the country of COP21, published its first climate report in 2016. The company already communicates a lot about the climate, and shareholders already have all the elements available to express their disapproval of the group’s strategy, notably by voting against the management and accompanying this vote with a justification. However, these justifications are often not made public until months after AGM votes. In the intervening time, it is difficult to differentiate between votes opposed to the very principle of integrating climate urgency into the group’s strategy and those that would sanction a strategy lacking ambition.

In other words, Total does not need to be encouraged to communicate on its climate strategy; Total needs to be pushed to adopt a climate strategy that is compatible with a viable climate trajectory. Only a resolution will allow shareholders to define the terms of debate.

While the relevance of a Say on Climate is uncertain in Total, it is not without risk either. Indeed, if Total decides to put a watered down climate strategy to the vote, it is to be expected that shareholders will decide to vote for it. The majority of shareholders vote in agreement with the company’s management, as shown in last year’s Say on Pay or climate resolution. This positive vote will give the company the legitimacy to pursue a slow, incrementalist strategy. This will pave the way for Total to develop its capacity in renewables without reducing its hydrocarbon production and its activities in fossil fuels for years to come.

Another risk is emerging: some companies and investors are taking the original CIFF proposal and weakening it by changing the timeline or applying it to sectors that CIFF didn’t originally intend. For example, the Say on Climate supposedly asks companies to put their strategy to the vote every year. However, no shareholder has contested Shell’s recent commitment to bringing such a resolution to a vote only every three years. If this climate strategy is adopted, Shell will be able to oppose any other request until 2024 by referring to the mandate given in 2021 by these shareholders.

Finally, while Say on Climate resolutions aim to force companies to submit their climate strategy to a vote, the result is not binding. The company could just as easily choose to ignore the vote’s result, whether it is for or against its climate strategy. This was not the case with the climate resolution tabled at the 2020 General Meeting of Total SE.

If they are sincere and willing to play an active role in decarbonizing the activities of companies whose shares they hold, investors should file their own climate resolutions, even when Say on Climate already applies, to make clear their expectations. Additionally, they must vote against board members who express disagreement with their climate strategy.

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