Investor ‘rights denied’ as TotalEnergies rejects climate resolution

Oil and gas giant says shareholders would have interfered with company strategy


Christine Dawson

An investor group that had a climate resolution rejected by oil and gas giant TotalEnergies on legal grounds has expressed concern its shareholder rights are being overlooked.

In April, 11 investors – led by Dutch pension provider MN and including Aegon Asset Management, Achmea Investment Management, APG and Greater Manchester Pension Fund – filed a resolution that proposed TotalEnergies set and publish climate goals in line with the Paris Agreement. MN, on behalf of its client PMT (Pension Fund for the Metal and Technology Sector), and the co-filers represent about 0.8% of TotalEnergies’ shareholder capital. 

When the resolution was proposed, Bas Bijleveld, senior adviser responsible investment and governance at MN, said: “We appreciate the open dialogue we had with TotalEnergies and acknowledge the progress the company made over the past years.

“However, its current efforts are not enough to stop global warming. With this shareholder resolution we encourage the company to become the first oil and gas giant that has its targets for 2030 completely 1.5°C aligned and be an example for others in the sector.” 

TotalEnergies said in a statement the resolution “encroaches on the public policy competence of the board of directors to define the company’s strategy.”

The statement continued: “Under cover of extending the transparency of the information to be provided in the management report, the proposed resolution would in fact amount to an obligation to frame the strategy ‘to align its activities with the objectives of the Paris Agreement’ and to (i) set reduction targets in absolute terms… of direct or indirect greenhouse gas emissions… and (ii) the means implemented by the company to achieve these targets.”

MN spokesman, Ruben Munsterman, objected to TotalEnergy’s view on the resolution: “We don’t think our resolution is unlawful for the following reasons:  

  • The resolution asks for targets and does not prescribe a strategy for how to achieve them
  • A similar resolution was accepted by the TotalEnergies board in 2020.”

Munsterman concluded: “We are deeply concerned by the disregard of our rights as shareholders.”

The investor group recently sent an open letter to French market regulator AMF urging it to ensure the resolution will be on the agenda at the next shareholder meeting.

TotalEnergy’s AGM is 25 May.

MN has stated it plans to vote against two agenda items at the AGM – the 2021 executive remuneration resolution and the climate transition progress report.

In a statement, MN said it will vote against the remuneration of TotalEnergy chair and CEO, Patrick Pouyanné, because “we hold the CEO responsible for denying shareholder rights”.

The company said it has strong concerns regarding the climate transition progress report following its shareholder resolution being rejected.

“We call on other shareholders to join us in voting against these agenda items,” said Munsterman.

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