On Thursday, a French court ruled that the refusal by TotalEnergies' board of directors to include a shareholder resolution, co-submitted by the Ethos Foundation, on the agenda of its 2024 general meeting was legitimate. As a result, shareholders will not be able to vote on the separation of the roles of Chair of the board and CEO, which Ethos regrets.

The Nanterre Commercial Court ruled on Thursday. After hearing the arguments of both parties, the court decided that the refusal of TotalEnergies' board of directors to include a shareholder resolution on the agenda for its general meeting on 24 May 2024 was legitimate. 

“We obviously regret this decision," says Vincent Kaufmann, CEO of the Ethos Foundation. For us, TotalEnergies' decision not to put our shareholder resolution on the agenda is an infringement of shareholder democracy. We will continue to defend the rights of shareholders in the future, starting with the right to file a resolution at the AGM of a company of which they are co-owners, in particular on key issues such as governance.

As a reminder, the resolution filed on 18 April by Ethos and a coalition of institutional investors supported by the FrenchSIF, representing more than EUR 1’000 billion in assets under management, was consultative and had the objective of allowing all shareholders to express their opinion on the company's governance. In addition, the coalition of French and international pension funds and asset managers who co-filed the resolution held TotalEnergies shares representing more than EUR 1.3 billion (0.9% of the capital), well above the threshold required by French law for this type of initiative. 

The separation of the roles of Chair and CEO is now widely recognised as good governance practice. It separates management and control responsibilities, ensures a balance of power and strengthens the board's ability to take independent decisions and supervise the management of the company. 

Ethos recommends opposing the re-election of all directors

The board's refusal to put a purely consultative shareholder resolution on the agenda of the general meeting sends a very negative signal about the company's willingness to listen to and dialogue with its shareholders. For this reason, but also because of the lack of independence of the board and the company's insufficient climate strategy, Ethos recommends opposing the re-election of all board members who stand for re-election at tomorrow's general meeting in Paris. 

Ethos also recommends voting against the remuneration report and the consultative vote on the climate strategy. Ethos considers that TotalEnergies' climate objectives are not sufficiently ambitious and that its climate policy is not credible. In particular, the decision to increase oil and gas production by 2 to 3% per year until 2028 is contrary to the global objective of reducing greenhouse gas emissions and also to the forecasts of the International Energy Agency (IEA) published in June 2023 which anticipates oil demand to increase by 0.4% to 1% until 2028.

General meetings