TotalEnergies: Energy Transition Strategy and Goals

Published June 15, 2021 | 45 min watch

Derek Neldner, CEO and Group Head, RBC Capital Markets sits down with Patrick Pouyanné, Chairman and CEO, TotalEnergies SE to discuss the company’s recent name change and its bold new climate strategy to reach Net Zero emissions by 2050.

Solving the Sustainability Conundrum

Energy players are currently facing an existential dilemma. “You have a growing global population requiring more and more energy, and, at the same time, the need to lower CO2 emissions. It’s a challenge we need to tackle,” Patrick Pouyanné, who is at the helm of the world’s fourth largest oil company, said. “Last year, we accelerated our investments in renewables, but the perception of the company was still ‘Total equates oil’. At the board level, we wanted to really transform into an energy company.” Hence the new name, TotalEnergies, and the increasing pace of investments in lower emission energies, especially in the most energy-hungry parts of the world. “In the past three years, we have invested US$3 billion in natural gas, and renewable, solar, energies in India. Currently the population stands at about 1.5 billion, but it is expected to reach 2 or 3 billion in the years ahead and we need to be prepared.”

The Opportunities of Energy Transition

Despite the decline in oil prices last year, TotalEnergies witnessed positive trends. “Two types of energies kept increasing - renewable electricity, up by 13% last year, and liquified natural gas (LNG) - up 3%, driven by China and India, despite the economic slowdown. This was good news for TotalEnergies, since they are the two pillars of our growth,” Pouyanné stressed. The move from Total to TotalEnergies is to build on this momentum and participate in the many opportunities offered by the energy transition. The energy giant aims to become one of the top five renewables producers by 2030 - whilst maintaining investor returns. “Last year, for instance, we bought the largest solar developer in India. We invested US$2 billion and the value of the shares today is about $5 billion.” As part of its strategy to reach Net Zero emissions by 2050 or earlier, TotalEnergies has a clear strategy between now and 2030. “We’ll see no more growth in oil, even declining sales of oil products, but we’ll also maintain our growth overall, with the ambition to produce a third more energy – half coming from LNG, half from electricity.”

A holistic approach to sustainability

To create a culture of sustainability and reach its goals, TotalEnergies has included CO2 emissions targets in all the compensation packages. “We have also created a team of CO2 fighters with 500 big ideas to reduce emissions at no costs, just by managing things differently,” Pouyanné stated. The company will also be recruiting 50 renewable business developers in 50 different countries to identify new opportunities and leverage its worldwide global presence. “We have committed that the renewables investment we have done have a return on equity of about 10%. We need to be smart,” he concluded.

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