TotalEnergies’ 2024 Annual General Meeting confirmed the overwhelming support of its shareholders for the company’s climate-wrecking strategy. Reclaim Finance has analysed the details of the votes cast by the main shareholders, and the results are indisputable. Despite the obstinacy of TotalEnergies’ management in pursuing a fossil fuel expansion strategy, most of its shareholders voted in favour of the company’s climate plan, the re-election of its directors and the remuneration of the CEO. Ignoring the climate emergency, they also approved the dividend payment and financial statements, while TotalEnergies’ investment strategy remains mainly focused on fossil fuels.
At the 2023 Annual General Meeting, 30% of shareholders voted in favour of a resolution calling on TotalEnergies to align its climate plan with the Paris Agreement. Instead of amending its climate strategy, a few months later TotalEnergies took a step backwards, announcing that the company plans to increase its oil and gas production by 2 to 3% by 2028. [2] Once again, this year, the company ignored its climate-conscious investors by rejecting a shareholder proposal that aimed, among others, at “improving dialogue with the Board of Directors on climate and transition issues”. [2]
A climate-wrecking plan approved by a majority
In contradiction with the projections of the International Energy Agency (IEA) and the scientific recommendations to limit global warming to 1.5°C, TotalEnergies continues to develop new oil and gas projects. In 2023, the company was the sixth largest oil and gas upstream developer in the world, [3] perpetuating fossil fuel production and locking in decades of additional greenhouse gas emissions. Moreover, TotalEnergies’ investment strategy still prioritizes oil and gas: more than 67% of the company’s investments will be devoted to this sector between now and 2030, with a large proportion dedicated to developing liquefied natural gas activities.
However, this year,
of TotalEnergies’ shareholders approved its climate plan through their votes on the so-called Say-on-Climate resolution.
Of the company’s 20 largest shareholders, only DWS, Dimensional Fund Advisors, UBS Asset Management and Union Investment voted against the climate strategy. Of the 10 largest French shareholders, Ofi Invest Asset Management and La Banque Postale Asset Management voted against, and Ostrum Asset Management abstained but did not vote against, failing to express clear opposition.
Paradoxically, Amundi (Crédit Agricole group) and BNP Paribas Asset Management (BNP Paribas group) have given their support to the company’s climate plan. However, as part of their climate commitments, their parent companies recently announced that they would no longer participate in conventional bond issues for companies involved in the development of oil and gas exploration and production projects. The votes cast by their asset management subsidiaries are highly inconsistent with these commitments.
Massive support for the management behind TotalEnergies’ strategy
The Chair of the Board and Directors and CEO, Patrick Pouyanné, and the members of the Board of Directors are the orchestrators of this climate-wrecking strategy. As directors, they are responsible for defining the company’s strategy and overseeing its activities, including its climate plan. Since votes regarding the re-election of directors and executive remuneration are binding, they are an effective means of expressing disagreement with the decisions taken by management. Voting against these resolutions is therefore a way of sanctioning TotalEnergies’ fossil fuel expansion and an attempt to block its implementation. In addition, these votes are tools for escalation in the face of the failure of past shareholder engagement.
Yet, few major shareholders voted against these resolutions this year. Overall, 76% of shareholders supported Patrick Pouyanné’s re-election. Of the major shareholders analysed here, only NBIM, DWS, Dimensional Fund Advisors, Union Investment and Ofi Invest Asset Management voted against, and BNP Paribas Asset Management abstained. However, these opposition votes are not always motivated by climate-related reasons. NBIM said its vote meant to oppose the combination of Chair and CEO roles. Ofi Invest Asset Management and Union Investment were among the few investors to justify their vote against the CEO’s re-election on climate grounds. [4] BNP Paribas Asset Management did not specify the reasons for its abstention.
Furthermore, only Union Investment opposed the other two re-elections of directors, and Ostrum Asset Management and La Banque Postale Asset Management opposed one of the two. These three investors were also the only ones to vote against the CEO’s remuneration. All the other major shareholders analysed gave their support to these resolutions, which all received more than 89% of votes in favour.
Focus on short-term profits
TotalEnergies’ shareholders are adopting a short-term approach, favouring immediate financial income over the investments needed for the transition. They have almost unanimously approved the allocation of dividends and the financial statements. While the company could use its record profits to invest in sustainable energy, 99.99% of shareholders approved the payment of dividends. [5] As a reminder, in 2023, for every dollar invested in its integrated power business, which is supposed to group together its transition-related activities but includes activities based on fossil gas, TotalEnergies distributed 3.4 dollars to shareholders. Similarly, even though TotalEnergies’ financial accounts do not properly incorporate climate-related risks, [6] thereby underestimating their long-term financial impacts, 99.5% of shareholders approved the financial statements at the AGM. None of the 20 largest shareholders and the 10 largest French shareholders of TotalEnergies voted against the dividend payment and the financial statements.
The time has come for TotalEnergies shareholders to fulfil their responsibilities and radically change their engagement approach with the company. To prevent its climate-wrecking projects, they must absolutely oppose strategic routine votes and halt new investments in the company, primarily the purchase of bonds.
