Yesterday, TotalEnergies published the detailed poll results for its Annual General Meeting (AGM) held on 25 May. These results mark the failure of shareholder engagement and confirm the complicity and major responsibility of shareholders in the oil and gas majors’ climate inaction. In contradiction with their own commitments regarding the need to support and accelerate the companies’ transition toward a low-carbon future, major investors such as BlackRock and Allianz did not even find the courage – or the desire – to oppose TotalEnergies’ flawed climate plan through a simple consultative vote. In the coming weeks, Reclaim Finance will continue to analyze each investor’s individual votes to point out the hypocrisies and cowardice that undermine the credibility and effectiveness of shareholder engagement.

A stinging failure for the climate and for shareholder engagement

The flawed climate plan presented by TotalEnergies received 89% support from shareholders at the company’s 2022 AGM last week (compared to 92% last year). This slight decrease in shareholder support (-3 percentage points) reflects a status quo: shareholders continue to rubber stamp flawed climate plans that are fundamentally incompatible with the climate emergency. The result of the vote at TotalEnergies confirms a trend seen at other oil and gas companies’ AGMs during the last couple of weeks (1)

Accounting for abstention, the support rate for TotalEnergies’ climate plan even increases slightly between 2021 and 2022. It was 82.8% last year (7.3% against and 9.9% abstention) and it reaches 83.8% this year (11.1% against and 5.7% abstention). These figures indicate that the increase in the rejection rate of TotalEnergies’ climate plan is entirely due to some investors shifting from absention to opposition (2): none of TotalEnergies’ major shareholders seem to have withdrawn their support for the company’s climate strategy.

The results of TotalEnergies’s AGM confirm the failure of shareholder engagement toward oil and gas companies. While CEO of the French Major discarded shareholder opposition by saying that those who voted against its climate plan were “marketing their shares at the expense of [TotalEnergies]”, one can legitimately wonder if it is not rather the opposite: Say on Climate votes are becoming hollow marketing tools for companies to greenwash their climate inaction, with the help of complicit shareholders. The last option for safeguarding the credibility and effectiveness of Say on Climate would be to make them mandatory under law and to set precise expectations regarding the content of underlying climate plans (as it is currently being done by the UK Transition Plan Taskforce in the UK).

Revealing a first cohort of complicit investors

Individual investors are slowly beginning to publish their votes at TotalEnergies’ AGM. These votes highlight the hypocrisy and complicity of investors who appear to be more concerned by giving the appearance of climate action and “engagement” rather than actually pushing companies to do more on climate –  even through a simple, non-binding vote.

It is already established that Allianz Global Investors, a subsidiary of the insurer Allianz and one of the first investors to make its votes public, voted in favor of TotalEnergies’ flawed climate plan (3). The investor also supported incomplete and unambitious climate plans at Repsol, BP and Shell. The US giant Blackrock has also published its ballots, which show that it supported TotalEnergies’ climate plan – as well as those of Shell and Equinor (4).

BlackRock’s decision is not all that surprising since the American asset manager had already supported TotalEnergies’ and Shell’s 2021 climate plans last year, and had announced that it would support fewer shareholder resolutions on climate this year. Allianz’s position, on the other hand, is much more surprising – some would say hypocritical – as Allianz recently pledged neither to insure nor to invest in any new oil and gas projects.  However, Allianz seems comfortable to give its full support to companies behind such projects – TotalEnergies is Europe’s largest fossil fuel developer and the seventh largest worldwide.

The arguments put forward by Allianz and investors to justify their unwavering support for TotalEnergies – and other majors – are very weak:

  • According to BlackRock, TotalEnergies is compliant with the TCFD reporting framework – despite this claim being rebutted by the benchmark of the Climate Action 100+ initiative… of which BlackRock is a member. The asset manager also welcomes new climate targets – on methane, Scope 3 oil, etc. – while knowingly ignoring the fact that TotalEnergies’ overall emissions have not decreased since 2015 and will barely decrease by 2030. Finally, BlackRock praises TotalEnergies’ “transition-resilient” investments… citing the development of brown assets such as liquefied natural gas (5) and forgetting that 70% of the company’s capital expenditure remains dedicated to fossil fuels (including for exploration and development of new projects).
  • Allianz points several key concerns with TotalEnergies strategy (planned increase in fossil production, absence of clear absolute target for scope 3 emissions, etc.) and even concludes that this plan “does not allow to assess whether the company [is] in line with its Net Zero ambition by 2050”. However, Allianz supports this plan because of TotalEnergies’ new target for oil-related emissions – despite this target having no material impact over the company’s overall emissions) and because the company made new commitments regarding the transparency and disclosures in its future climate plans – despite the two issues being totally unrelated (6)

Some silver linings

Despite such disappointing results for the climate, TotalEnergies’ AGM also hinted at some positive trends:

  • Shareholders begin to hold Directors accountable for oil and gas expansion  – TotalEnergies’ incumbent Directors were re-elected with 93% shareholder support on average, a -6 points decrease compared to their last election in 2019.
  • A minority of active  shareholders remains truly committed to the climate. Beyond the filing of two climate resolutions – which were not tabled in the end –  TotalEnergies’s AGM saw a growing number of pre-declarations of votes against the company’s climate plan (7) and several major investors did vote against it. For example, after Crédit Mutuel last week, Ostrum published voting bulletins confirming it had also opposed TotalEnergies’ climate plan (8).
  • The technical and complex issue of Say on Climate votes has spurred an unprecedented mobilization from climate activists, asset managers’ customers and civil society organizations, sending a clear message: Shareholders who rubber stamp flawed climate plans share the responsibility for big emitters’ climate inaction, and they will be held accountable.

After the Annual General Meetings of Repsol, Equinor, BP and Shell – which all saw shareholders massively approve failing climate plans, often at the expense of more ambitious shareholder resolutions – TotalEnergies Annual General Meeting results question the willingness and ability of investors to push the oil and gas sector transition. In the coming weeks Reclaim Finance will continue to analyse in detail the votes of investors on these resolutions in order to highlight their hypocrisy, complicity and cowardice in the face of companies that refuse to transform.

Notes :

  1. See our mid-season review of the AGM season and our analysis of the results of Shell’s AGM.
  2. As is the case, for example, with Assurances du Crédit Mutuel and Crédit Mutuel AM who abstained last year and opposed TotalEnergies’ climate plan this year.
  3. Details of Allianz GI’s votes can be found here.
  4. And against most of the climate resolutions tabled by shareholders. Details of BlackRock’s votes and analysis can be found here.
  5. While LNG’s lifecycle emissions can sometimes be higher than those of coal.
  6. As illustrated by the fact that most of the investors that obtained the new transparency-related commitments from TotalEnergies still voted against the company’s climate plan.
  7. Including from a “lead” investor for TotalEnergies’ engagement through Climate Action 100+, which publicly flagged this resolution and its intention to vote against it  to all CA100+ members.
  8. Details of Ostrum’s votes can be found here.