Total SA shareholders voted down a proposal for more stringent emission targets even as growing numbers of investors call for a tougher stance on climate change.
The resolution, which would have forced Total to step up cuts in global emissions, was rejected by 83.2 per cent of shareholders at their annual meeting held online on Friday. But the proportion supporting – almost 17 per cent – reflects rising concern among investors and mirrors similar votes at European peers Royal Dutch Shell plc and Equinor ASA.
“For the third time this month, responsible investors have sent a clear signal to an oil major,” said Mark van Baal, founder of Dutch activist investor group Follow This. “They expect action from management – not just empty words about 2050.”
Total is seeking net-zero emissions from its own worldwide operations – known as Scope 1 and 2 -- by 2050, the company said on May 5. It’s also targeting net-zero emissions from energy products used by its customers – so-called Scope 3 -– in Europe by that year.
In recent weeks, investors from France, the U.K. and Australia have called on the oil major to publish targets for reducing greenhouse-gas output in absolute terms and for curtailing emissions caused by the use of its products worldwide.
Total’s board had advised shareholders to reject the resolution, saying it would force the company to assume responsibility for emissions from customers such as airlines and motorists, bringing legal risks. The oil and gas producer also pointed to its recent announcement on targeting carbon neutrality by 2050.
The group of 11 money managers that initially filed the resolution, including Meeschaert Asset Management and Candriam France SAS, said they “regret the lack of global absolute emission-reduction targets” and called for an “action plan that meets concrete and comprehensive objectives.”
European oil majors are increasingly chasing more ambitious emission goals amid growing pressure from investors, governments and customers to fight global warming. But concern persists that they’re not doing enough. Shell shareholders voted against a similar climate resolution last week, though support increased to 14.4 per cent from 5.5 per cent in 2018. A greater proportion of Equinor investors also supported such measures – 27 per cent, up from 12 per cent last year.
At Total, “a large number of investors are clearly unconvinced” by its climate commitments, said Jeanne Martin, campaign manager at non-profit group ShareAction. “Today’s voting result on France’s first climate resolution constitutes a significant revolt against the company.”
Total chief executive officer Patrick Pouyanne said Friday that the company will extend its climate pledge on carbon neutrality – including on Scope 3 – to regions outside Europe if and when they adopt similar policies to those on the continent. He also said the company will probably take a stake in a “large” North Sea wind project soon, and is looking at floating wind projects in France and Asia, as well as expansion in electricity distribution in eastern Europe.
The company has pledged to spend 20 per cent of its capital expenditure on low-carbon electricity by 2030, up from 10 per cent currently.
© 2020 Bloomberg L.P.