On the 29th of May, 16.8% of the Total’s shareholders voted for the first climate resolution ever filled in France, therefore initiating the wake up call of shareholders’ responsibility to push the French major fossil fuel company toward a complete transformation of its activities. A significant share of shareholders, accounting for 11.12% of the voting rights, abstained, reinforcing the disavow of Total’s climate strategy.

It was a real uphill battle getting this resolution to its vote at Total’s AGM:

  • In April 2020, overcoming the obstacles to file a resolution in France and resisting to Total’s pressure, 11 shareholders filed a resolution asking Total to adopt a roadmap to align with the Paris Agreement. Caught unprepared, Total rushed to announce a “new climate ambition”, with the support of BNP Paribas AM and Hermes EOS.
  • Hiding out behind this announcement, the fossil fuel company and some proxy advisers – like Glass Lewis and ISS in its benchmark report – advised shareholders against voting the resolution. But Proxinvest advised to vote for it, as the sustainabiliy report of ISS did.
  • Few days before the AGM, BNP Paribas has announced that it will abstain from the vote, a way of not disavowing the company while pointing out that the balance is not there and that Total must get back to work.

Indeed, far from being “ambitious”, Total’s commitments are a smoke screen that maintains confusion to protect a business model based on fossil fuel expansion. Announced measures are light years away from the ones the company needs to take to reduce its greenhouse gas emissions and adapt to economic, societal and regulatory changes. None of the 11 shareholders behind the climate resolution find Total’s measures sufficient. They were not alone: shareholders with 26.06% of voting rights voted for the resolution or abstained on May 29th.

This resolution must mark a turning point and the beginning of an increasing shareholders’ pressure on Total.
Shareholders that voted against
the resolution, puting short term interests first and giving in to clan logic and habits, must immediately review their position or be ready to be judged by History.

Total doesn’t really aim at carbon neutrality

Total’s carbon neutrality target only concerns 10.5% of its GHG emissions. It applies to emissions coming directly from its installations (scope 1 and 2) but not to the ones caused using the energy products it sells. Therefore, Total only commits on 42 MtCO2 and chooses to ignore 400 MtCO2.

In its convocation to the May 29 th general assembly, Total criticizes the resolution that integrates scope 3 arguing that it “makes the company responsible” for the emissions of the products it sells. This argument is counterfeit. Energy supply as major consequences and depends on the company’s choices, making it responsible. Total tacitly recognizes this when it announces that scope 3 will be integrated for Europe.

However, by saying scope 3 for Europe only, Total only commits to respect the national legislations and European objectives and to follow the European market. Total is active in 130 countries and its GHG emissions are bound to increase outside of Europe. By refusing to decarbonize its scope 3 emissions everywhere in the world, Total opposes the adoption of pro-climate public policies.

Total still plans on expanding fossil fuels

Total does not aim at net zero emissions in 2050, it only accepts to reduce the carbon intensity of its products by 60%. This measurement allows it to continue increasing its fossil fuel production and to develop new projects incompatible with the global carbon budget. Total plans on increasing its fossil fuel production by 12% from 2018 to 2030.

The only thing necessary to lower carbon intensity is to rapidly develop energies that are relatively less carbonized than the ones it currently produces. It does not require the absolute reduction of GHG emissions. On the contrary, over the past few years Total’s emissions increased while the carbon intensity of its products diminished.

Carbon neutrality 2050 entails the adoption of intermediary objectives. Yet, the ones taken by Total are not new nor sufficient to align with a 1.5°C or 2°C trajectory. According to the IPCC, we need to reduce carbon emissions by 50% by 2030, but Total only said it would reduce the carbon intensity of its products by 15% by then.

Total weakens itself by maintaining

its Capex into fossil fuels

According to Total’s commitments, 90% of its CAPEX will still be dedicated to fossil fuels in the next few years and 80% in 2030. Before the Covid crisis, the company planned on digging 25 new wells to grow its production by 5% a year from 2017 to 2022.

This strategy goes against the current trend of growing climate regulation and is risky for the firm and its shareholders. According to 67% of Total’s CAPEX is at risk in the IEA’s BD2S Paris aligned scenario.

Find out more about Total

The resolution is historic

On May 29th, at Total’s AGM, only 16.8% of the oil company’s shareholders voted for the first climate resolution ever filled in France and 11.2% abstained. 83.2% voted against the resolution, refusing to break the tragedy of horizons and the omerta on Total. Their short-termism is also preventing them from ensuring Total’s resilience against growing climate risks, related to new regulation, sanitary crises, economic shocks, and market shift toward clean energies.

By opposing change at Total, shareholders are also undermining their own returns. For years, the price of a Total’s share has stopped increasing. The shareholders’ remuneration relies on generous dividends that are now more and more criticized. Shareholders can only protect their capital by forcing the company to get before its competitors in the ecological transition and not wait to suffer its consequences.

However, despite the fact that there remains a majority of shareholders opposed to climate change, there is no going back. Total will have no choice but to review its climate ambitions to avoid facing another and even more supported resolution next year.

History will remember the 11 investors that broke the incestuous bond between CAC40 members and co-filed the resolution. They are Actiam, Candriam, Crédit Mutuel Asset Management and Assurances du Crédit Mutuel, Ecofi Investissements, Edmond de Rothschild, Friends Provident Foundation, Fédéral Finance Gestion, La Banque Postale Asset Management, Meeschaert AM, Sycomore Asset Management. History will also remember the 15% other shareholders who supported the resolution on the 29th of May, for example the UK and Australian Pension funds Nest, AustralianSuper Pty and First State Super.

Others shareholders and Total’s financial stakeholders must follow or be ready to be judged by History for failing to act now and push the biggest CAC40 polluter on the path of a fossil fuel phase-out.

The resolution must be a beginning

On the day of the Annual General Meeting, a group of 25 investors collectively managing 10 trillion dollars issued a joint statement asking Total to increase its commitments. They call on Total to achieve carbon neutrality by 2050 on all the Group’s emissions, including emissions related to the consumption of its products, and for which Total refused to take any commitment to now. Among them are Amundi, Aviva, AXA, BNP Paribas and Legal & General.

Their initiative is to be welcomed, but it must be remembered that this type of soft declaration cannot replace strong actions such as voting for the climate resolution tabled on 29 May. Moreover, while the 25 investors are calling on Total to make a commitment aligned with a 1.5°C trajectory by 2050, they are not asking the oil company for anything in the short and medium term. But carbon neutrality requires immediate action to rapidly reduce the group’s absolute emissions.

While votes at shareholders’ meetings are confidential, a growing number of investors, including AXA and Amundi, are publishing their voting records. It will therefore be necessary to wait until their votes are published to find out whether they have acted consistently in taking part in both initiatives or whether they are sticking to statements of principle while postponing or even blocking immediate efforts and changes.

Beyond these 25 investors, all the Group’s shareholders must continue their commitment to Total and call on the oil company to adopt a detailed roadmap to move away from fossil fuels and align its activities with the 1.5°C objective.

Their commitment must be based on clear and time-limited demands. If Total does not meet these demands, the oil company must be excluded from all financial services.

Our detailed demands on engagement