Shareholders overwhelmingly backed TotalEnergies' progress report on climate and sustainability at its annual meeting on Friday and rejected an activist investor group's resolution seeking more ambitious climate targets.

However, activist group Follow This won significantly more support for its proposal seeking more ambitious medium-term emissions reduction targets, gaining 30.44% of shareholder votes, versus 17% in 2020.

Moreover, the vote marks the highest level of support yet for the group's climate resolution at all three European oil and gas majors.
 
"The board of directors will continue its dialogue with all shareholders concerning the company's climate strategy," the French major said in a statement issued after the meeting.

Total, which insists its strategy is already aligned with the Paris Agreement, had advised shareholders to reject the Follow This proposal.

Instead, it urged shareholders to support the climate progress that the company has made by voting for its own resolution, which won 88.7% support from shareholders.

Protesters Clash With Police

Outside Total's meeting in Paris, several hundred climate protesters clashed with police who used teargas to disperse them.

"I regret that this meeting must take place in such a situation," CEO Patrick Pouyanne told shareholders. "It should be a dialogue."

The company said in March that it would accelerate its emissions reduction targets through 2030 and increase low-carbon spending this year.

It also outlined plans to hold oil production steady in its updated Sustainability & Climate 2023 progress report.

Pouyanne said the board had decided to let shareholders judge whether the company would attain its goals by putting the progress report to a vote this year, "given the intensity of this debate."

"I think this dialogue needs to continue, he said. "What is important … is to listen. This is a difficulty that we're confronted with — radical positions mean that we can't listen anymore to each other."

Moreover, Pouyanne emphasized that "the path we have walked so far since 2015 is quite impressive. I didn't expect when I became CEO in 2015 the investment plans I've given you today. This is a deep evolution."

Outlining the "concrete results” the company has made in expanding its renewable energy capacity, for example, Pouyanne said he hoped shareholders in Europe and France would "maintain their trust" in the company.

Otherwise, the company' investor base could shift further to "the other side of the Atlantic," he suggested.

US institutional investors hold 46% of the company's shares today, compared to 35% three to four years ago, he noted.

Voting Power

Follow This described the increase in support for its proposal since 2020 as "a growing shareholder rebellion." It said the 17 institutional investors who filed the climate resolution alongside Follow This deserved much of the credit.

"Investors are increasingly using their voting power to tackle the climate crisis … We hope that their peers will follow their leadership at the [shareholder meetings] of Exxon and Chevron next week," the group said.

Norway’s $1.4 trillion oil wealth fund said on Friday it would vote in favor of the same Follow This resolution at the Chevron and Exxon Mobil meetings on May 31, even though it did not back the group's resolutions at Total, Shell or BP.

The fund — managed by Norges Bank Investment Management (NBIM) — held stakes of 0.91% in Chevron and 1.17% in Exxon at the end of 2022.

NBIM did not immediately respond to a request for comment on why it would vote differently at the meetings of the two US oil and gas majors.

Exxon's board has recommended that shareholders should vote against the Follow This proposal, saying: "We believe setting Scope 3 [greenhouse gas emissions] targets can have significant unintended consequences for society."

Chevron's board said it "does not believe that committing to reduce Chevron's absolute Scope 3 [greenhouse gas emissions] emissions is in stockholders' interests, nor should it be Chevron's responsibility."

In 2022, Follow This resolutions won 28% and 33% of the votes cast at Exxon and Chevron, respectively.

NBIM also said it would vote against the re-election of Darren Woods and Mike Wirth to the board of directors of Exxon and Chevron respectively. Woods and Wirth both chair the boards at their respective companies and also serve as CEO.

"The roles of chairperson and CEO should not be held by the same individual," it said.

European majors Shell and BP have separate chairs and CEOs, although Pouyanne serves in both roles at Total. The two roles are commonly combined at US companies.