Shareholders push back against TotalEnergies

20 May, 2022

The coalition has accused TotalEnergies of being “neglectful” of shareholder rights.

A shareholder coalition has stated it will vote against TotalEnergies’ executive pay and sustainability and climate progress report after the company refused to include their resolution at its AGM.

In April, MN Services - together with a shareholder coalition of 11 investors - had filed a shareholder resolution ahead of the AGM to urge TotalEnergies to set and publish targets consistent with the Paris Climate Agreement’s 1.5C.

However, the board decided against including the resolution in its AGM agenda, arguing it contravened French legal rules setting the prerogatives of the company's governance bodies.

In a press release, it stated: “The resolution encroaches on the public policy competence of the Board of Directors to define the Company’s strategy.”

It instead welcomed those who had filed the resolution to share their views as a written or verbal question at the AGM.

The coalition, however, sees this as an “extraordinary neglection” of shareholders’ rights, highlighting that TotalEnergies had accepted a similar resolution in 2020.

As a result of the decision, the coalition announced earlier this month that it would be voting against two resolutions at the AGM.

These included the executive pay for TotalEnergies’ chairman and CEO Patrick Pouyanné, as the coalition holds Pouyanné responsible for denying the shareholder resolution to be included on the agenda.

The second resolution the coalition voted against is TotalEnergies’ sustainability and climate progress report, as the coalition argued the report's targets will not meet 1.5C.

It has also argued TotalEnergies’ report has a lack of commitment to decarbonising upstream production.

The coalition is led by asset manager MN on behalf of its client PMT and includes Achmea Investment Management, Aegon Asset Management and APG (on behalf of clients bpfBOUW, SPW and PPF APG), among others.

Altogether, the 11 coalition members make up 0.8% of TotalEnergies’ shareholder capital.

In comparison, other companies in the oil and gas sector have allowed such resolutions to be discussed at their AGM. TotalEnergies’ peers, Shell, Equinor and BP, all allowed at least 20 votes on climate resolutions in the past year.