TotalEnergies’ shareholders vote for climate chaos

At TotalEnergies’ 2023 annual general meeting, shareholders had the opportunity to express themselves through their votes on the company’s climate strategy, both through resolutions dedicated to this topic and routine votes. Despite investor rhetoric presenting shareholder engagement as one of the effective levers to support corporate transition, the voting results showed that the majority of TotalEnergies shareholders continue to support an inadequate climate strategy. 

Reclaim Finance has scrutinised the individual votes of the company’s thirty largest international shareholders, as well as those of the ten largest French shareholders, based on TotalEnergies’ shareholder base on 11 May 2023. 

This year, a group of minority shareholders filed a resolution calling on TotalEnergies to align its indirect greenhouse gas emission targets, known as “scope 3”, with the Paris Agreement by 2030. Although TotalEnergies plans to reduce these emissions by only 2% by 2030, only 30.4% of investors supported this resolution, with the rest being complicit in the company’s climate inaction. Amongthe company’s thirty largest shareholders, fourteen voted against the resolution (including Blackrock, Vanguard, Norges Bank Investment Management, and Allianz Global Investors), four abstained, and three cast mixed votes. Among the ten largest French shareholders, AXA IM and Carmignac did not support the resolution, and Ostrum abstained.  

The company’s management also submitted to its shareholders a Say on Climate vote on the implementation of its climate strategy. In spite of its name, this strategy is not at all climate-friendly since it authorises the development of new oil and gas fields despite their incompatibility with a 1.5°C trajectory. And yet, 88.8% of TotalEnergies’ shareholders and almost all the largest international ones approved the Say on Climate, with the exception of Dimensional Fund Advisors and Ostrum who voted against, and DWS and Thornburg Investment Management, which abstained. In France, the company’s main shareholders also supported the company’s climate plan, except for two [1]. 

Oddly, six investors, including Amundi, BNP Paribas AM, UBS AM and Union Investment, showed inconsistency between their vote for the shareholder climate resolution and their vote for the Say on Climate. This behaviour demonstrates a very partial shareholder engagement approach and sends a confused message to the company’s management about the direction its climate strategy should take. 

Investors can also integrate climate issues into routine votes, such as re-appointment of board members, approval of remuneration, and approval of financial statements. Yet, these levers for putting climate issues at the heart of a company’s operations are largely ignored by shareholders, and votes at TotalEnergies’ 2023 annual general meeting were no exception. 

Regarding re-appointment of directors, this year the company’s shareholders voted on the re-election of Marie-Christine Coisne-Roquette, who sits on the Strategy and CSR Committee, and Mark Cutifani. Although they both failed to encourage the company to define a climate plan in line with a 1.5°C scenario, their mandates were respectively renewed with the support of 83.9% and 91.2% of investors. Among the company’s major shareholders, only DekaBank Deutsche Girozentrale voted against the two outgoing directors, without specifying whether the decision had been motivated by climate issues. 

Votes on remuneration did not fare any better. Despite the fact that the 2022 variable remuneration package for CEO Patrick Pouyanné did not sufficiently integrate quality climate-related criteria [2], 90.6% of investors approved it. Only three of the largest shareholders opposed the CEO’s remuneration: Union Investment, DekaBank Deutsche Girozentrale and Ostrum. However, none of them indicated that this opposition was due to climate issues. 

Lastly, the company’s consolidated financial statements were approved by 99.9% of shareholders, including all the major shareholders, even though the statements do not properly integrate the risks associated with climate change and transition [3]. 

The annual publication of investor votes for all portfolio companies is essential for to ensure accountability to their clients and external stakeholders, and to demonstrate the credibility of their shareholder engagement approach. However, many investors still do not publish their detailed votes after annual general meetings, such as the Government Pension Investment Fund (GPIF), Oddo BHF, AG2R La Mondiale and Société Générale’s asset management subsidiaries. Other TotalEnergies shareholders publish their votes annually, but with too long a delay after the meeting. For example, PIMCO, Federated Hermes and Natixis IM International have still not published details of their votes three months after the company’s meeting. 

Given the considerable influence of TotalEnergies’ shareholders on the company’s strategy, and their pro-shareholder engagement rhetoric in the fight against global warming, their votes in 2023 are incomprehensible. Reclaim Finance is calling on all shareholders of the oil and gas company to radically reconsider their voting approach for the coming proxy voting season, and to integrate climate issues into all relevant routine resolutions.