As a fiduciary on behalf of our clients, BIS has engaged with Total over the past several years on a range of governance and material sustainability topics, including climate-related disclosures. As part of our engagement and voting process, we reviewed relevant company disclosures ahead of this year’s annual general meeting. Total’s disclosures are consistent with our expectation of large carbon emitters with a previous history of engagement with BIS on the topic.
…BIS has engaged with Total on its climate commitments for a number of years and was engaged with the company throughout the process of this latest revision of its commitments. Most of Total’s Scope 3 emissions come from the Scope 1 emissions of Total’s customers. Because no single oil & gas company is fully in control of the global energy mix, Total’s Scope 3 commitments will only be achievable if key stakeholders such as policymakers, businesses and consumers work together to accelerate the development and use of low-carbon technologies, incentivize more energy efficiency, reduce demand for fossil fuels, and remove emissions from the atmosphere.
- Instruct Company to Set and Publish Targets for Greenhouse Gas (GHG) Emissions Aligned with the Goal of the Paris Climate Agreement and Amend Article 19 of Bylaws Accordingly
In determining our vote, we took into consideration that Total already had some of the most ambitious climate targets in the industry on all relevant scopes (1, 2 & 3), and that the company already makes strong TCFD disclosures. Even under the most ambitious energy transition scenarios, fossil fuels are likely to play a role in the global economy for the coming decades.
Furthermore, the shareholder resolution refers to Total’s previous climate commitments, which are now out of date and have been superseded by renewed and stronger commitments. As a result of Total’s responsiveness, BIS considers the request made in the resolution to have been substantively delivered.
Given the company’s TCFD-aligned reporting, which has been one of BIS’ key requests of significant carbon emitters, its commitment to continuous improvement and its responsiveness to shareholder engagement on portfolio resilience and reduction of scope 1, 2, and 3 GHG emissions, we are supportive of management at present.
Moreover, we do not believe it appropriate to amend Total’s bylaws in the manner proposed. A company’s bylaws define its purpose and the rules by which it is run, and are not meant to define the corporate strategy, which must, by its very nature, evolve in accordance with the company’s operating environment. In this case, the proposed modification to Total’s bylaws is an unsuitable mechanism by which to address climate-related matters and could have unforeseen and far-reaching consequences for both the company and its shareholders.