Protect the climate but finance Total?
It’s a provocative question: can you protect the climate while financing Total? Many will answer in the negative. And yet, while a growing number of French financial actors are committed to achieving carbon neutrality (net-zero) and aligning their activities with the 1.5°C target, none or virtually none has excluded the company from its support. Provocation or simply hypocrisy?
This is what a new report published by Reclaim Finance and Greenpeace France entitled “Pipeline of Pollution: Total responsible, Finance complicit?” aims to find out. Given Total’s responsibility for greenhouse gas emissions and climate change at the international level, the way financial players adapt their relationship with Total SE is a good indicator of the sincerity of their climate commitments and the challenges involved in meeting them.
Step 1: Evaluating Total on climate
The report begins with an overview of Total’s climate commitments. The group is committed to investing massively in renewable energies. There is cause for concern about the role of false solutions such as biomass, but the significant amounts invested there support Total’s communication efforts to appear as a multi-energy company. With this in mind, Total has also announced that it will submit a change of name to TotalEnergies to the vote of its shareholders at the next annual general meeting.
But you have to compare them to other figures and that’s where the problem lies: in 2020, Total produced 447 units of fossil fuels for every 1 unit of renewable energy – fossil fuels thus represent more than 99.7% of its mix. This order of magnitude is likely to change very little over the 10 years we have left to carry out the transformations necessary to limit warming to 1.5°C. This is because:
- The evolution of Total’s hydrocarbon production will result in an increase of more than 50% between 2015 and 2030.
- In 2030, Total’s CO2 emissions are expected to exceed by 200Mt the maximum allowable emissions to align with a 1.5°C trajectory.
- In 2030, 80% of Total’s investments will still be directed towards fossil fuels.
To invest in Total is therefore to invest in the expansion of fossil fuels and the aggravation of climate catastrophe.
“To invest in Total is to invest in a carbon-heavy future and a strong dose of greenwashing to boot. While its name might change, its mission remains exactly the same: with 90% of its investments directed towards fossil fuels, Total has been attempting to burn the planet for profit for a number of years,” comments Lucie Pinson, founder and director of Reclaim Finance.
Step 2: Studying the possible options
Financial actors will only be able to achieve their long-term climate objectives if they push Total to align itself with equivalent transition trajectories. Otherwise, they must exclude the company. According to the United Nations, oil and gas production must decrease by 4 and 3% per year by 2030 and greenhouse gas emissions must decrease by 7.6% per year by 2030 in order to limit warming to 1.5°C.
If they decide to engage Total, banks, insurers and investors must therefore ask Total what its commitments are in terms of reducing its hydrocarbon production and reducing its greenhouse gas emissions in absolute terms, on all its activities (scope 1, 2, and 3). Currently, Total has none.
French financial actors are also forced to set red lines for Total right now: the Minister of the Economy, Finance and Recovery, Bruno Le Maire, has called on all financial actors to adopt exit policies for the financing of unconventional gas and oil. Total, by contrast, notably has five new projects in the Arctic. Requiring Total to halt the development of this type of project will enable them to meet the Minister’s request, but this request must be extended very quickly to all fossil fuel projects in order to meet scientific realities.
“Whether they’re trying to protect the climate or their dividends, shielding themselves from the financial risks linked to fossil fuels or responding to the Minister’s demand, financial actors have no choice but to force Total to put a stop to its hydrocarbon expansion strategy ,” continues Lucie Pinson.
Step 3: Translating into action
Because they will also have to adopt policies on unconventional gas and oil as of this year, financial actors must now demand that Total halt the development of new projects in deep waters and the Arctic. The termination of the EACOP project in Uganda-Tanzania should also figure among the conditions for the provision of new support.
But their alignment with the climate objectives of the Paris Accord requires them to go further, in particular not supporting companies like Total SE until they have given up exploring or opening up new fossil fuel reserves, including through the construction of transportation infrastructure. Banks, insurers and investors must also, from 2022 onwards, make their support conditional on the adoption of a plan to decarbonize their activities in line with the objective of limiting global warming to 1.5°C.
Total’s investors have the opportunity to act now ahead of Total’s AGM. Because Total is already communicating on its climate strategy, a Say on Climate would be irrelevant. Rather, shareholders must table their own resolution to influence the terms of the debate.
More specifically, they must require that Total adopts targets for the absolute reduction of its greenhouse gas emissions, to align its investments with the climate objectives of the Paris Agreement and to weight its offsets according to the achievement of these objectives. In addition, they must vote against certain members of the Board of Directors to express their disagreement with the climate strategy.
“The oil major’s ambition to reach carbon neutrality by 2050 is simply smoke and mirrors. Up to now, certain shareholders have perhaps been duped by Total’s smokescreens. But they will all be complicit in its ecocidal activities from tomorrow if they ignore the numbers unveiled in our report. We cann on them to follow the path forged by others at the last AGM and submit a new, ambitious and binding climate resolution ahead of this May,” concludes Edina Ifticene, oil campaigner at Greenpeace France.
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