TotalEnergies Scales Back 2030 Net Zero Target

TotalEnergies Scales Back 2030 Net Zero Target

Investors are demanding that energy firms decarbonize as the green energy transition will be essential for any hope of limiting global warming below 1.5°C. Accordingly, climate change dominates shareholder proposals, as shown in the Proxy Preview annual report, which features a recent request by activist group Follow This to TotalEnergies ahead of the energy giant’s shareholder meeting at the end of May.   

The Proxy Preview provides an annual report cataloguing ESG shareholder resolutions. Its 2023 publication cited at least 542 ESG shareholder resolutions between January and March; 23% are about climate change. The volume of climate-related shareholder proposals has increased from this time last year, with 122 proposals in 2023 compared to 109 in 2022. We expect this trend to continue. Follow This alone is responsible for resolutions at BP, Chevron, ExxonMobil, and – most recently – TotalEnergies. In early April, Follow This – along with seventeen other investors – called TotalEnergies to accelerate its emissions cuts by 2030. The group also demanded the energy firm make Paris-aligned targets and develop more aggressive Scope 3 targets.  

TotalEnergies was one of the first oil and gas giants to announce a net zero by 2050 target, with a 35-40% emissions reduction goal for 2030. However, the firm has now scaled back their 2030 target to a 20-30% emissions cut, stating a necessity for increased investment in oil and gas to meet energy demands due to current economic and energy instability. The Verdantix 10 net zero and climate risk predictions report, released in February 2023, predicts that organizations will walk back the timelines of their net zero targets due to increased Scope 2 emissions from oil and gas investment for energy security. Both the US and UK governments have made investments into continued fossil fuel extraction under a similar guise. Additionally, TotalEnergies has recently conducted early-stage talks with private-equity-backed oil and gas exploration firm, Neptune Energy Group, about a potential takeover, demonstrating the firm’s active pursuit of new oil and gas sites.

The IEA’s 2022 World Energy Outlook report details that to target 1.5°C by 2100, investment must cease towards new oil and gas fields. Fatih Birol, executive director of the International Energy Agency, stated that “if (energy firms) increase… oil production (by) 3 million barrels per day and (announce a) strategy… in line with the Paris Agreement – this doesn’t work… there is a contradiction here”. The business case for developing strong transition plans and net zero targets is clear from increasing shareholder demands, litigation risks and the latest climate science. Oil and gas firms will need to accelerate their efforts to achieve their targets.

To learn more about our predictions for 2023 check out our webinar and for information on how industrial organizations are responding to energy transition strategies, check out the Verdantix report: Best Practices: Energy Transition Strategies For Industrial Facilities.