Big investors file ‘consultative’ climate proposal at Total

Seventeen European investors, including Man Group, PGGM and MN, have filed a “consultative” climate proposal at TotalEnergies, asking the French oil major to align its 2030 Scope 3 emission reduction targets with the Paris Agreement. 

The filing follows Total’s board’s refusal to allow a similar but binding shareholder resolution to go to a vote last year on the basis that it encroached on “the public policy competence of the board of directors to define the company’s strategy”.

This was despite allowing a similar resolution to go to the vote in 2020, attracting support close to 17 percent.  

This year’s proposal, filed on Wednesday, is a collaboration between the €1 trillion investor group and Dutch climate activist Follow This, which has filed similar requests at Shell, BP, ExxonMobil and Chevron.  

Follow This founder Mark van Baal said the level of support for the filing “takes the fight against climate breakdown to a new level”. 

Among the investor backers, which all hail from France, Belgium, the Netherlands and the UK, are Achmea Investment Management, Sycomore Asset Management and Edmond de Rothschild Asset Management. 

“Based on its plans to ramp up gas production, we expect TotalEnergies to become the largest European hydrocarbon producer by 2030,” said Bertille Knuckey, fund manager at Sycomore AM. “This is not reconcilable with a Paris-aligned emission reduction pathway.”  

“Investors need to vote to voice their opinion on this strategy,” she added. 

There is significant overlap between this investor group and the one that filed a proposal last week at Engie, asking the French utility to offer a Say on Climate vote and improve its disclosure so investors can fully assess its strategy against a 1.5C scenario.   

Several of the filers of the 2022 Total proposal have also returned this year, including MN, Achmea IM and Edmond de Rothschild AM.  

Aegon Asset Management, the Greater Manchester Pension Fund and APG all co-filed last year at Total but are not included in the list released this week. APG is, however, a co-filer on the Engie proposal.  

According to Responsible Investor data, MN is a lead investor on Total as part of Climate Action 100+, the multi-trillion dollar investor engagement initiative. Other co-leads on the company are EOS at Federated Hermes and Meeschaert Asset Management, neither of which is among the filers.  

Given its non-binding status, the filers will hope that it will be much harder for Total’s board to claim the proposal steps on its toes when it comes to strategy.  

However, should the company reject the resolution, little in way of support for the investors is likely to come from France’s financial watchdog, Autorité des marchés financiers (AMF), which stated last month that it would not get involved in such disputes. 

AMF denied it has the “authority to assess the validity of any refusal by the board of directors to include such draft resolutions on the agenda of a general meeting”.  

“Such disputes are a matter for the commercial court,” it added. “The AMF does not intend to obtain jurisdiction pertaining to these types of issues.”   

Total’s annual general meeting takes place on 26 May.