A growing number of shareholders (30%, up from 17% in 2020) voted in favour of a climate resolution put forward by Follow This climate at the TotalEnergies annual general meeting (AGM) last week.
According to the Paris Climate Agreement, the world must almost halve emissions by 2030 to limit global warming to 1.5°C. TotalEnergies had no targets that lead to large-scale emissions reductions this decade, the request of the climate resolution.
The vote is the highest for the Follow This climate resolution at a European super major yet, the climate group announced. In 2021, the climate resolution received 30% support at Shell.
“Financial institutions have stepped up their efforts to fight the climate crisis,” said Tarek Bouhouch of activist shareholder group Follow This, adding that “voting is crucial in compelling Big Oil to drive down emissions. Big Oil can make or break the Paris Climate Agreement and must respond to shareholders.”
He added: “We thank the 17 co-filers of the climate resolution and the investors who followed their leadership. These investors voted as true stewards of the global economy.”
He noted that votes on climate resolutions expose which investors are determined to drive down emissions and which investors allow TotalEnergies to postpone emission reductions.
Investors that voted in favour of the resolution recognise this vote as “the most effective tool to urge TotalEnergies to drive down emissions by 2030,” Bouhouch added.
“Clients of institutional investors, such as pension funds, will be watching how their asset managers voted to gauge their competence as long-term value stewards.”
The 17 institutional investors from France, Belgium, the Netherlands, the UK, and the US have €1.1trn of total assets and include Achmea Investment Management, Degroof Petercam Asset Management, Edmond de Rothschild Asset Management, Man Group, MN, and PGGM Investments, among others.
AGMs of ExxonMobil and Chevron to follow
Because no oil major has set Paris-aligned emissions reduction targets for 2030, investors are expected to apply the same pressure at ExxonMobil and Chevron today (Wednesday 31 May).
“Investors are increasingly using their voting power to tackle the climate crisis. We thank these investors for their determination to achieve the Paris goal. We hope that their peers will follow their leadership at the AGMs of Exxon and Chevron next week,” said Bouhouch of Follow This.
“We hope that the investors that voted against, will view Exxon’s and Chevron’s AGMs as retakes to correct this oversight,” he continued.
The resolutions request 2030 emissions reduction targets in line with the Paris Climate Agreement.
Open consultation at Glencore
Shareholders have forced Glencore to open up a consultation process on a resolution filed at its AGM last week demanding to disclose information on thermal coal production.
Specifically, the shareholders asked the company to explain how its thermal coal production aligns with the goals set in the Paris Agreement.
The company saw 29.22% of shareholders vote in favour of the resolution despite Glencore’s board advising against it, triggering a consultation process under the UK Corporate Governance Code.
The resolution was co-filed by a global coalition of institutional investors, representing $2.2trn in total assets, including Legal and General Investment Management, Ethos Foundation on behalf of the Pensionskasse Post and Bernische Pensionskassem, Vision Super, an Australian industry super fund, and HSBC Asset Management.
The Australasian Centre for Corporate Responsibility (ACCR) and UK-based responsible investment NGO ShareAction were also co-filers.
Financial institutions press companies to disclose climate impact
Not-for-profit charity CDP has started a non-disclosure campaign with the support of 288 financial institutions, with nearly $29trn in total assets, pushing companies to disclose information on the climate impact of their business activities.
Companies can send their responses to investors via CDP’s online system until 26 July.
The companies targeted by the campaign emit the equivalent to more than 4,200 megatons (Mt) of carbon dioxide per year, more than all 27 EU member states combined (4145 Mt), according to CDP.
The campaign targets companies that have either never reported on the environmental impact of their business activities or that have ceased reporting on such impacts to CDP.
The results of last year’s non-disclosure campaign showed that companies are twice as likely to disclose their data if they are asked to do so directly by financial institutions, according to an analysis conducted by CDP. Last year, the campaign prompted responses from 388 companies.
Laurent Babikian, global director of data products at CDP, said: “Standardised and comprehensive information about the environmental impact [of companies’ business activities] is critical to financial institutions. The disclosure of this information will soon be for many companies unavoidable, with a number of mandatory disclosure measures coming into force not only in the EU, but also in the UK, US, Brazil and Japan.”
Henrik Pontzen, head of ESG at Union Investment, said: “Trust is good, control is better. We invest in a credible transformation, and in order to be able to verify this credibility, we need transparency. Companies that refuse [to report data to] CDP have to feel the consequences.”
The financial institutions participating in CDP’s campaign include Schroders, Union Investment, Pictet and Deka Investment, asking companies such as Tesla, Hellofresh Exxon, Saudi Aramco to disclose data.
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