TotalEnergies, Carrefour… The climate, a new battlefield for general shareholders’ meetings

The instructions are clear: no laptop, no computer, no bag… and if possible, don’t come at all. Otherwise, it is best to arrive at Salle Pleyel two and a half hours in advance. This is not a concert but the general meeting of shareholders of TotalEnergies which should begin at 10:30 this Friday.

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The tanker multiplies this year the precautions to avoid the disastrous session of last year, with hundreds of environmental activists blocking the general assembly, under the insults of some small carriers. Again this year, Shell’s general meeting in London was seriously disrupted by environmental activists. And yet the morning promises to be tense. Early this morning, scuffles between demonstrators and police near the Salle Pleyel were observed. A dozen activists who managed to sit on the ground in front of the entrance to the room were dislodged by the police, who cordoned off the section of rue du Faubourg Saint-Honoré. Dozens of demonstrators have since been installed to try to prevent the holding of the GA, according to the calls to demonstrate broadcast upstream.

Say on Climate

Two resolutions of the French major on the climate will attract attention. The first is filed at the initiative of the company itself, which finally agrees to consult its shareholders on its climate strategy within the framework of the Say on Climate. However, NGOs are calling for a vote against this resolution, which is deemed insufficient in relation to the CO2 emission reduction targets of the Paris Agreement (2015). And, newer, leading institutional investors, such as CNP Assurances, have already indicated that they would vote against this resolution.

At the same time, 17 French and international investors filed their own resolution, calling on the group to align its indirect emission reductions (Scope 3) with the Paris Agreement. A text on which TotalEnergies has called for a vote against on the grounds that these emissions are not the responsibility of the company but of its customers! This is also the same argument that was put forward by Shell and BP against a similar resolution.

The result of these two votes will be crucial to better gauge the balance of power on the climate issue. In the background, an international coalition of NGOs launched a campaign last week targeting financial support from TotalEnergies.

Finance in focus

BNP Paribas is clearly targeted: it is the oil company’s second largest bank and its chairman, Jean Lemierre, whose mandate has just been renewed, also sits as a director of TotalEnergies. During its general meeting, on May 16, several scientists questioned the bank, under the boos of small shareholders present, on its climate strategy. The atmosphere was much less heated than last year but the tension is still just as palpable. The bank also took care to specify its climate objectives a few days before the meeting.

“We are faced with financial institutions that are in denial and defending their continued support for oil and gas expansion in the name of energy security even as they are part of carbon neutrality alliances. We must therefore call on them again during general meetings to ensure that these companies align their practices with their speeches”had warned Lucie Pinson, director of Reclaim Finance.

A rise in power

“The climate has never been so topical”, notes Olivier de Guerre, co-founder and CEO of Phitrust, a management company that has been defending ESG and good governance practices for nearly 25 years. It has also just added, along with ten other management companies, an item on the agenda of Carrefour’s general meeting on its climate strategy, which should give rise to a formal response from the board of directors of the distributer.

“On the one hand, companies are all changing scale on the subject of the climate. We must measure the progress made: before 2016, climate issues were not or hardly addressed in general assemblies or boards of directors. They are now at the heart of governance. On the other hand, investors are now obliged to take an interest in the climate and justify their choice with the implementation of the European taxonomy”summarizes Olivier de Guerre.

Internal or external resolution

The climate can invite itself to general assemblies in two ways. First, shareholders can propose climate resolutions, which do not have board approval. This is the case this year at TotalEnergies or Engie where around fifteen investors have submitted their own text in favor of greater transparency. This last resolution obtained nearly 25% of the vote on April 26, which is a relatively good score for a dissenting motion. And moreover, the chairman of the board of Engie, Jean-Pierre Clamadieu, has undertaken to take this resolution into account.

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Filing a resolution without the company’s approval is however rare, especially in France where the exercise is an obstacle course. Moreover Phitrust and several management companies have presented a reform project at Bercy to the Financial Markets Authority, without great results so far. On the other hand, more than 120 climate resolutions have been filed by shareholders in the United States, twice as many as two years ago, according to a count by the shareholder consulting agency Proxy Preview.

Then companies can submit their own climate resolution (Say on Climate), with an advisory vote at the general meeting. In 2021, three French companies submitted a vote Say on Climate and, in 2022, there were twelve of them, i.e. 10% of the companies in the SBF 120. This year, there are only five left: Icade, Klépierre, Covivio, Schneider Electric and TotalEnergies.

Growing activism

THE Say on Climate has no legal basis, far from it. But there is pressure to institutionalize it, and even for an annual climate vote, as 56 asset managers recently demanded. Some NGOs, such as Reclaim Finance, are also reserved on the Say on Climate, too often perceived as a “greenwashing” tool.

Opposite, a large majority of companies show their opposition to the Say on Climatewith a strong argument: putting a climate strategy to the vote ultimately amounts to putting the company’s strategy to the vote, taking into account climate issues, which must remain the prerogative of the board of directors.

“We are announcing a massive withdrawal from upstream oil and gas and the means to achieve it” (Antoine Sire, BNP Paribas)

“To have the climate strategy validated is to open the door to the validation of an acquisition, of a commercial strategy… we can’t get out of it”, advances a manager, reluctant to Say on Climate. In any case, the subject was carefully avoided by the AFEP-Medef governance code revised last year. This shareholder activism can be boring or bear fruit. This is the conviction of Lucie Pinson: “general meetings are not only an opportunity to challenge management, but it is also an opportunity to call on shareholders and investors to play their role in favor of the climate”.

CEO compensation and carbon emissions on the menu at Carrefour’s AGM

Social climate strained by inflation, call for more transparency on carbon emissions: the shareholders of the French distribution giant Carrefour meet Friday morning in Aubervilliers for a general meeting which must also decide on the remuneration of CEO Alexandre Bompard. This compensation, broken down into a fixed part (1.5 million euros), a variable part (up to twice the fixed part), long-term compensation (up to “60% of the maximum total compensation” ), “is unacceptable, even indecent”, criticized the CGT.

The group’s unions denounce in this transition from stores to lease-management, a form of franchise system in which Carrefour remains the owner of the business, a low-noise social break. The CFDT estimates that Carrefour’s workforce has shrunk by 30,000 people since 2018, from 115,000 to 85,000.

For its part, the management says that this change in the status of the stores is reviving their activity and preserving employment, and the CEO Alexandre Bompard plans to rely more and more on a franchise store operating model.

Carrefour was also summoned by small shareholders, claiming to weigh a total of 1.1% of the capital, to clarify the calculation of its greenhouse gas emissions.

The board of directors of Carrefour, criticized in recent months by specialized associations on the sincerity of its commitments in this area, plans to submit to the vote of its shareholders a more precise communication of the levers used to reduce its indirect greenhouse gas emissions. Greenhouse.

The Moulin family, owner of Galeries Lafayette, is Carrefour’s largest shareholder with 13.73% of the capital and 17.5% of “real voting rights” at the end of 2022.

(with AFP)