The coalition of investors behind a shareholder climate resolution at Total has welcomed the oil and gas major’s newly declared net-zero ambition, but is sticking with its request, it said today.
The shareholder resolution was requested by 11 institutional investors, owning 137% of Total’s share capital, last month.
Today Total said it had decided to include the shareholder resolution on the agenda of its annual general meeting, to be held on 29 May, but not to recommend the approval of the resolution.
Citing its newly announced ambition to achieve carbon neutrality by 2050, unveiled yesterday in a joint statement with Climate Action 100+ investors, Total said the board of directors considered “it responds largely to the objectives of the authors of the resolution and that the group’s strategy incorporates this ambition”.
“There is, therefore, no need to compel the strategic framework of the company’s activity in the by-laws, beyond what the board of directors has already proposed to the shareholders’ meeting,” it added.
At the AGM, Total will be asking investors to vote in favour of amendments to its by-laws “to enshrine consideration of the social and environmental challenges involved in the company’s activities in the duties of the board of directors”.
Acknowledging and welcoming this proposal and Total’s new climate change commitment, the group of investors behind the shareholder resolution today nonetheless reiterated their view that the company needed to set out a detailed action plan integrating clear intermediary targets, and covering all greenhouse gas (GHG) emissions.
The shareholder resolution calls for the emission reduction targets to be for absolute reductions – as opposed to reductions in relative measures such as carbon intensity.
Speaking to IPE, Aurelie Baudhuin, director of SRI research at Meeschaert, said Total’s ambition to achieve net-zero emissions by 2050 across its Scope 3 emissions only covered Europe.
“We think it should be worldwide,” she said.
She explained that the investor group also wanted Total to provide more information about their capital expenditure, saying that it did not distinguish between natural gas and renewable energy.
She said the group viewed their shareholder resolution as complementary to Total’s new net ambition, in that a follow-through with its request would mean the company would be providing more details about the implementation of its strategy.
In a statement, the group said their resolution had the goal of encouraging Total to “go further in the direction it wants to take, by supporting the effective implementation of its necessary transformation”.
CA100+ accompanies Total to net-zero club
Total’s net-zero emissions commitment was announced yesterday in a joint statement with EOS at Federated Hermes and BNP Paribas Asset Management, as institutional investors participating in Climate Action 100+.
One of the network’s co-ordinating groups said this meant all European oil and gas majors were now working towards net-zero following Climate Action 100+ engagement.
The joint statement highlighted the following as “three major steps to get Total to net-zero”:
- Net-zero across Total’s worldwide operations by 2050 or sooner (scope 1+2);
- Net-zero across all its production and energy products used by its customers in Europe by 2050 or sooner (scope 1+2+3);
- 60% or more reduction in the average carbon intensity of energy products used worldwide by Total customers by 2050 – with intermediate steps of 15% by 2030 and 35% by 2040 (scope 1 + 2 + 3).
A Climate Action 100+ announcement also drew out that Total’s ambition to achieving carbon neutrality by 2050 included:
- “Oil and gas capital expenditure allocation to be assessed for consistency with the goals of the Paris Agreement, together with annual reporting”; and
- “To actively advocate for policies that support delivery of net-zero emissions, together with mobilisation of its capabilities to deliver not only its own ambitions but also to help countries and other corporations to achieve net zero”.
Bruce Duguid, head of stewardship at stewardship provider EOS at Federated Hermes, said Total stating their ambition to achieve net-zero emissions was “a very big step forward” for the company.
He said the capital expenditure assessment measure was “one of the most important elements” of the joint statement.
“If all capital must be consistent with the Paris goals over time, then the company’s contribution to the economy will always have to be within the overall Paris envelope,” he said.
“Logic dictates that unless we find a remarkable form of carbon capture and storage or decarbonised fossil fuel then that does mean a diminishing amount of production so it has to ultimately lead to net-zero emissions.”