A group of shareholders has asked Engie to be more ambitious with its climate plan. The historic gas group Engie is diversifying and is counting on renewable energies to achieve its CO2 emission reduction targets, but has not yet set a date for leaving the fossil fuel world.
Like the other French giant TotalEnergies, Engie has to defend itself against a shareholder resolution that will be put to the vote at the general meeting on April 26. This coalition of some 15 shareholders, representing less than 2% of the group’s capital, had asked it to amend its articles of association so that the progress made in its climate strategy would be submitted to an annual vote. A “legitimate” request, but for the time being unnecessary, according to Engie, whose board of directors has already recommended to its shareholders to vote against the resolution.
“The board of directors can submit what it wishes to the general assembly”, justified Julia Maris, director of CSR, in front of some journalists on Monday. The group’s chairman, Jean-Pierre Clamadieu, had indicated in March that he was ready to “consult shareholders every three years on the climate strategy”, but he expressed his reluctance to submit its progress to an annual vote, in particular pending a clearer position from the regulator on this type of consultation, but also, on a global scale, on the extra-financial publications of companies.
On the other hand, the group published an “addendum” on April 14 to provide “clarifications” to its plan, while the shareholders also asked for details to better “evaluate this (climate) strategy in relation to a climate scenario limiting global warming to 1.5°C”. Among their requests, details on investment plans, the evolution of the group’s energy mix or its objectives in terms of electrical storage capacities.
But this “addendum” remains insufficient for the NGO Reclaim Finance, which had already criticized in March, a “flawed plan”. Engie “fails once again to give credibility to its ability to meet its climate objectives by providing the information requested by investors”, reacted to AFP Lucie Pinson, director of the NGO. In the face of criticism, the group argued on Monday that it reduced its total climate-damaging greenhouse gas emissions by 33% compared to 2017, to 174 million tons of carbon equivalent. It plans to reduce emissions from its power plants by 59% and emissions from the sale of gas to its customers by 34% by 2030.
To aim for carbon neutrality in 2045, Engie explains that it is following a benchmark corresponding to limited warming “well below 2°C”.
Keeping the gas plants
Why not a limit of +1.5°C compared to pre-industrial temperatures, the reference objective? “This would “impose an asset sale insofar as the thermal power plants concerned remain necessary in the short term for the resilience of the energy systems,” the group justifies in its “addendum.”
It considers “more responsible” to keep its gas power plants and gradually decarbonize them “with more and more hydrogen and renewable gas” produced from agricultural and food waste, “in addition to investing in renewable electrical energy”, and in the storage of these green electrons, explains Julia Maris.
In February, Engie announced a 50% increase in its investments to a total of 22-25 billion over 2023-2025, including 13-14 billion in solar and wind power. But while Engie reaffirms its goal of abandoning coal by 2027 worldwide, no date has been set for the exit of fossil gas, which it considers for the time being as a “solution to the energy equation”, as long as the demand is there.
The group is also committed to long-term contracts for liquefied natural gas(LNG), which has become the new “blue gold” for supplying Europe, which is deprived of Russian gas. “There is a trend away from fossils, but will it be in 2038 or 2042? Nobody can say,” says Julia Maris. Uncertainties” remain, particularly regarding technological advances in the development of green hydrogen.
