By Ritvik Dutta
On Wednesday, eleven investors owning about 1.35% of Total SA’s capital increased pressure on the French Oil Company, stating that the current efforts to comply under the Paris Agreement were inadequate. The investors pushed for the company to alter their business plans to focus more on the reduction of carbon emissions. Although efforts were made in the past to attenuate greenhouse gas output of their own energy generation, their marketable products remained untouched.
The Paris Agreement was signed into action on November 4, 2016 in order to ensure lower environmental carbon levels in the future. Ratified by the 55 countries that make up the majority of global emissions, the agreement brings most of the polluting countries together to “strengthen the global response.” According to the UNFCC, the main goal of the UN committee that signed the agreement is to minimize as much greenhouse gas damage to the environment as possible and keep the temperature change in this century under “2 degrees Celsius above pre-industrial times.”
Total SA’s investor group led by Meeschaert Asset Management consists of Actiam, Ecofi Investments, Sycomore Asset Management, La Banque Postale Asset Management, and Credit Mutuel Management. Together, they are working on creating a plan that they will present later at the next Total SA shareholder meeting currently scheduled for May 29th. In an interview done by the Thomson Reuters Foundation, an oil campaigner noted that if the plan is indeed implemented by Total SA, there would be a massive change in the oil giant’s business strategy. This huge change would prove to be instrumental during this time period due to the current COVID-19 outbreak. Demand for fuel is at an all-time low and the industry as a whole is forced to take drastic measures and institute cost cuts.
The Houston Chronicle reports that a separate organization by the name of Follow This is “delighted that institutional investors have now filed a resolution with the exact same request as ours.” Follow This adds that “Similar resolutions have been proven effective with Shell in 2017 and with BP and Equinor in 2019.” This forced reduction of emissions appeals to work with Total SA as it has in the past with other supergiant oil companies.
Competitors such as BP Plc, Repsol SA. Royal Dutch Shell, and Equinor ASA have all pledged to implement some form of carbon emission reduction, with BP plc and Repsol SA assuring carbon-free emissions by 2050. Total SA reports that since 2010, they have already reduced carbon emissions by 25%, pledging to reduce 40 million tons of carbon emissions by 2025. However, what the future actually entails for Total SA is yet to be seen.