TotalEnergies

The French multinational integrated energy and petroleum company is one of the world seven supermajor oil companies. Total have one of the most credible and balanced energy transition strategies within its peer group embedded across its fossil, renewable and new molecule business.

As an integrated oil & gas major, TotalEnergies energy transition is key to the long-term sustainability of the business and global ambitions to meet net zero emissions and limit warming to 1.5degrees. As such, Total is a key focus of the Managers climate engagement to continue to ensure leadership from this company on the energy transition.

Over the last couple of years, the business has already achieved several milestones. In April 2020, they adopted a net zero emissions target for 2050, aligned with the most ambitious targets of corporates and governments. They also have set absolute and intensity targets across all three emission scopes for short, medium and long term goals. They have adopted scope three emissions targets into the executive remuneration and they have agreed to disclose annual progress related to the climate targets they have adopted and report in line with the Task Force on Climate-related Financial Disclosures (TCFD) format.

More recently in meetings with the CEO ahead of their ‘Say On Climate’ vote at their 2022 AGM. Total has set a clear ambition to diversify its product mix into lower carbon energy molecules, such as renewable energy, hydrogen and biofuels, and carbon capture and storage (CCS) technology. TotalEnergies anticipate that by 2050 fossil fuels will constitute roughly one quarter of their sold products. However, CCS and offsets will get them to net-zero in their scope 3 emissions. While TotalEnergies have received criticism for some of its planned fossil fuel investments, 23% of their 2021 capital expenditure was aligned with the EU taxonomy and the business has been clear that this will continue to increase throughout the decade.

Total appears genuine in its ambition to transition into a low carbon multi-energy company over time. The CEO has emphasised that their workforce is supportive of the strategic direction set and provides employee training opportunities to help them meet Total’s future skillset requirements. Total have also responded positively to the suggestion that they disclose their employee survey results, and stated that they would potentially look to do this in their next reporting cycle.

Companies selected for illustrative purposes only to demonstrate the investment management style described herein and not as an investment recommendation or indication of future performance.