Valuation
6.1 Financial Summary
Figure 9
In 2022, TotalEnergies’ adjusted net income was $36.2 billion. Among its main competitors, TotalEnergies surpassed BP ($2.3 billion), Eni ($13.8 billion), Equinor ($33.5 billion), and Chevron ($35.5 billion). Its return on equity (ROE) was equal to 32.5%, indicating that TotalEnergies is profitable and is efficient in converting its equity financing into profits. Regarding the return on capital employed (ROACE) of TotalEnergies, it equaled in 2022 at 28.2%. This means that the company can generate higher profits from its investments.
6.2 Stock Price Evolution
Figure 10
Regarding the stock price of TotalEnergies, we can observe that over the last months, the company has maintained a high and stable stock price and EPS, well above its main competitors (Equinor, Chevron, BP, and Shell). Indeed, TotalEnergies’ EPS growth has been 32.53% CAGR since last September 2022. As of its share price, it was 60.65 EUR on December 6, 2023. We expect the company’s stock price to reach 78.67 EUR in three years, indicating a 30% upside, and 83.85 EUR in five years, equaling a 38% upside.
6.3 Financial Ratios
As per TotalEnergies’ current financial profitability ratios, we can observe that the company has consistently outperformed its industry average, and for some ratios, outperformed its overall benchmark. For instance, TotalEnergies’ gross margin (16.6 vs 15.6), EBITDA margin (21.7 vs 20), EBIT margin (16.6 vs 15.5), and net margin (8.5 vs 7.6) have all been superior to the industry average. As for the ROE, the company did outperform its overall benchmark (15.9 vs 12.4) but not its industry average (15.9 vs 17.7). These numbers indicate that TotalEnergies possesses a solid financial record and is currently ranked as a top performer in its industry.
Figure 11
Furthermore, as per TotalEnergies’ valuation ratios, we can conclude that they have both outperformed its industry and benchmark average. Indeed, most ratios are thoroughly ahead such as the P/E ratio LTM (8.2 vs 1 vs 0.5), the P/Bk ratio (1.3 vs 1 vs 0.6), the P/CF ratio (5.2 vs 1 vs 0.5), and the EV/EBITDA ratio (3.9 vs 1 vs 0.3). However, for the company, only the P/Sales ratio (0.7 vs 1) and EV/Sales ratio (0.8 vs 1.1) are slightly lower than the industry average. These ratios indicate that TotalEnergies is strongly valued and performs well compared to its industry and benchmark.
Figure 12
6.4 Financial Forecasts
As per the financial forecasts, TotalEnergies is expected to grow in the coming years. As per its income statement, the forecasted numbers show that its sales are expected to grow in 2025, almost doubling its original figures of 2021 (161 vs 215). The same scenario for the company’s EBITDA, equaling 33. 697B EUR in 2021 and expected to reach 43.466B EUR in 2025. Lastly, TotalEnergies’ net income of 16.038B EUR is forecasted to reach 19.377B EUR in 2025. Thus, we can see that the company is growing at a stable and steady rate.
Figure 13
Moreover, TotalEnergies’ forecasted balance sheet also indicates growing figures. For instance, the company’s total assets are expected to reach 287.625B EUR in 2025, compared to its 2021 baseline (255.904B EUR). As per its net debt, TotalEnergies will be expected to drastically reduce its debt levels to 8.869B EUR in 2025 (vs 26.937B EUR in 2021). This indicates that the company has managed to both be profitable and rely on its internal assets to clear off its debt. Last but not least, TotalEnergies has proven once more its profitability by enabling its shareholders to increase their equity levels. Indeed, the company’s shareholders' equity was equal to 97.437B EUR and is forecasted to reach 2025 123.417B EUR, indicating that the company has enough assets to cover its liabilities and repay its shareholders in case of a liquidation.
Figure 14
The company’s cash flows (from operations and financing) are expected to increase in 2025. For instance, cash flow from operations is expected to grow from 26.518B EUR in 2021 to 33.018B EUR in 2025. The same scenario from the cash flow from financing (-22.234B EUR vs 14.547B EUR). This means that TotalEnergies is diversifying its cash flow drivers and earning more profit to retain it. However, only cash from investing is expected to lower to -16.248B EUR in 2025 compared to 2021 (-11.908B EUR). This could signify that significant cash is being invested in the company's long-term health, such as research and development.
Figure 15
Lastly, we can analyze TotalEnergies’ share performance and expected performance. As per its forecasted EPS, figures are expected to grow at a rate of 8.70x in 2025, compared to a 5.83x rate in 2021. Similarly, the company’s dividends per share are also expected to increase, reaching 3.36x (vs 2.72x in 2021). As per cash flow per share, it is forecasted to grow by a 4.82-point basis, reaching 14.87x in 2025 compared to 2021. Lastly, the most notable increase relates to the book value per share. Indeed, the book value per share of a company indicates the performance of its stock relative to its market value. As TotalEnergies’ book value is expected to increase (54.87 in 2025 vs 36.64 in 2021), the stock is expected to be perceived as more valuable.
Figure 16
Risks and Mitigation
Risks
Protectionist Measures Affecting Free Trade and Economic Sanctions Regime
Against a backdrop of increased geopolitical tensions and risks of deglobalization and fragmentation between nations in the form of protectionist measures, trade tensions between certain countries restrict the free trade of goods and services, financial flows, and international transfers of labor or knowledge. These tensions, particularly when they require modifying the contractual framework of partnerships or the operating conditions of projects, are likely to hurt TotalEnergies’ business and operating income. If TotalEnergies were unable to manage the impacts of these commercial tensions appropriately, it would potentially incur significant increases
in costs for developing its projects, losing markets, and seeing its production or the value of its assets fall, which could adversely affect its financial situation.
Furthermore, economic sanction regimes, combined with export controls, can target those countries in which TotalEnergies operates and thus restrict certain types of financing or access to critical technologies, impose restrictions on the import, export, or re-export of several goods and services, and hinder TotalEnergies’ ability to continue its operations. In certain situations, the economic sanctions multiply without being necessarily coordinated at the international level. For example, in addition to hefty financial sanctions, the breaching of economic sanction regimes adopted by the United States may lead the authorities to impose measures that freeze companies out of the US market, such as a ban on using the US dollar, the currency in which most of TotalEnergies’ financings are denominated.
Increasing Regulation Around Energy Transition
COP 28, which took place in Dubai (United Arab Emirates) in December 2023, reaffirmed the objective to limit global warming and called on the Parties to accelerate the energy transition while underlining the challenges raised by the current geopolitical situation and the aspirations of the developing countries. Civil society, numerous stakeholders, and States are encouraging reductions in the consumption of carbon-based energy products and the establishment of an energy mix more geared towards low-carbon energies to meet the requirements of the fight against climate change, particularly given the objectives set by each State in the context of the Paris Agreement. However, the pace of change in the energy mix of countries must consider the needs and ability to adapt of the various energy consumers, who expect energy players to supply them with cost-effective and environmentally friendly energy. In this context, companies in the energy sector are led to deploy actions aiming at reducing their greenhouse gas emissions. They will also be able to help create solutions that reduce the CO2 emissions associated with the customer’s use of their energy products, as well as technologies and processes to capture, store, and reuse CO2. Consequently, they may be led to change the energy mix of the products they offer while at the same time having to manage the cost and the execution of projects supporting the energy transition.
Therefore, an insufficient ability to adapt to the pace of deployment of the energy transition, as well as an inadequate anticipation of the climate or sustainability regulations, of the evolution of the demand or of the energy cost to be effectively borne by the populations, could affect TotalEnergies’ outlook as well as its financial position (lower profitability, loss of operating rights, loss of revenues, increased funding difficulties), reputation or shareholder value. Indeed, increased pressure from stakeholders linked to climate issues relating to the company's oil and gas activities could lead to future climate-related legal actions against it. These actions could aim to suspend or prohibit oil and gas projects being considered or under development and equally target the challenges linked to greenhouse gas emissions from projects and other societal aspects. In a similar way to legal actions launched in France under Duty of Care against the company or launched against other companies in Europe, these legal actions could target the global emissions of the company and its stakeholders as well as the objectives set by the company for reducing its emissions, thereby obliging it to go beyond these objectives or even reduce its production of fossil fuels at a faster rate than envisaged in the current strategy. In both cases, these legal actions could impede the company from achieving its medium- and long-term objectives and its ability to finance the energy transition and achieve carbon neutrality by 2050.
The Effects of Climate Change and Extreme Events May Expose TotalEnergies to a Cost Increase and a Disturbance of the Continuity of its Activities
Climate change and extreme events (natural catastrophes, pandemics, etc.) potentially have multiple effects that could harm TotalEnergies’ operations. The increasing water scarcity could be detrimental to operations, rising sea levels could harm certain coastal activities, and the proliferation of extreme natural or weather events (such as floods, landslides, etc.) could damage onshore and offshore facilities and/or the associated logistical infrastructures. All these factors could increase the difficulties of operating and the costs of the facilities and adversely affect TotalEnergies' operating income. Moreover, climate change can expose TotalEnergies to an increase in its costs. For instance, more and more countries are likely to adopt carbon-pricing mechanisms to accelerate the transition to a low-carbon economy, which could hurt some of the company's activities and lead to a loss of competitiveness and a cost increase.
In Europe, TotalEnergies' industrial facilities participate in the CO2 emissions trading system (EU-ETS). The financial risk associated with purchasing these allowances on the market could increase following the system's reform that was approved in 2018. This emission allowance market entered its fourth phase in 2021. TotalEnergies estimates that approximately 30% of the emissions in the EU-free allowances will not cover ETS scope over the period from 2021 to 2030 (phase 4). At the end of 2022, these allowances were about €80/t CO2, and TotalEnergies estimates that this price could reach more than €100/t CO2 in phase 4. TotalEnergies considers a minimum CO2 price of $100/t (or the current price of a given country, if higher), and beyond 2028, this CO2 price is inflated by 2%/year. On the assumption that this CO2 price would be at $200/t, then inflated by 2%/year beyond 2028, i.e., an increase of $100/t compared to the base scenario from this date, TotalEnergies estimates a negative impact of 15% on the discounted present value of all the company’s assets (upstream and downstream).
Mitigation
Record Profits for TotalEnergies in 2022
In a context of strong market tensions in relation to, notably, the prohibition of crude oil or oil product imports from Russia, TotalEnergies’ refining margins have reached exceptionally high levels in 2022 despite the rise in energy costs. Nonetheless, the margins continue to be characterized by high volatility. Indeed, Russia's military aggression against Ukraine in February 2022 and its consequences have increased oil prices above $100/b, amplifying the bullish trend noted since the second Semester of 2021 about a lack of hydrocarbon investment. They have remained at high levels over the full fiscal year, notably supported by the decision of the OPEP+ countries to decrease the production quotas and the anticipation of the implementation of the European sanction on Russian oil since 5 December 2022.
TotalEnergies, a Company Aiming at Revolutionizing the Energy Sector
The energy transition is underway, but the world still uses fossil fuels to meet 81% of its energy needs. Therefore, to keep global warming to well below 2°C, in line with the Paris Agreement, the world must drastically reduce its consumption of fossil fuels (coal, oil, gas) and make the world energy system evolve by building the new low-carbon energy system at a much faster pace. Investing in two energy systems simultaneously is necessary to meet the challenge of the energy transition and still ensure that reliable energy is available in the short term at the lowest possible cost. Firstly, we must ensure the current system continues to operate responsibly, and at the same time speed efforts to build a new system centered on low-carbon energies (renewable electricity, biofuels and biogas, clean hydrogen, and synthetic fuels, CCS solutions for offsetting residual fossil-fuel emissions). Leveraging two measures that will deliver immediate results is possible. That means replacing coal with energy
applications whenever possible and investing heavily to improve energy efficiency. That, in essence, is TotalEnergies’ strategy: to continue providing the energy the world needs now, notably natural gas to replace coal, while responsibly and sustainably accelerating the transition to low-carbon energy solutions. This is how, in practice, TotalEnergies supports the goals of the Paris Agreement, which calls for reducing greenhouse gas emissions in the context of sustainable development and the fight against poverty and which aims to keep the increase in average global temperatures well below 2°C compared to pre-industrial levels.
Indeed, the energy transition depends, first, on electrifying energy use, which will require a massive increase in green electricity. TotalEnergies is expanding across the entire electricity value chain, from the production of intermittent renewables for flexible power generation to natural gas, storage, trading, and sales, with an eye on profitability. Its goal is to build an Integrated Power segment with a return on average capital employed higher than 10% and to rank among the world’s top five providers of solar and wind energy by 2030, with a gross capacity of 100 GW and an interim target of 35 GW by 2025 (the company reached 17 GW as of year-end 2022).
Moreover, the energy transition depends on developing new, low-carbon energies (biofuels and biogas, clean hydrogen, and synthetic fuels combining hydrogen and carbon) that TotalEnergies has the core skills to produce. The company is expanding into these new markets by focusing on circular resource management and deploying less mature technologies to test its business viability at its sites. For natural gas, a transition energy, TotalEnergies is pursuing growth across the liquefied natural gas (LNG) value chain to consolidate its position as the world’s third-largest supplier. LNG plays a key role in the net-zero roadmap for many coal-consuming countries. It is also a perfect partner for intermittent renewable energies: flexible, controllable CCGT plants ensure a secure electricity supply in the face of unforeseen weather events and fluctuations in demand.
Hence, as they evolve, the energy markets are becoming increasingly interconnected and interdependent, particularly since electricity – the energy at the center of the transition – is secondary, meaning it depends on other energies and markets. Therefore, the integrated multi-energy strategy of TotalEnergies and its solid financial base are strengths that allow it to be a major player in sustainable energy the world needs and make the most of the current changes, including the potential price volatility they may cause. Similarly, because TotalEnergies is ambitious to be at the forefront of the energy transition, it will likely be at the forefront of potential regulations as well.
A Booming Interest in Renewable Energies Around the World
The global energy crisis is driving a sharp acceleration in installations of renewable power, with total capacity growth worldwide set to almost double in the next five years, overtaking coal as the largest source of electricity generation along the way and helping keep alive the possibility of limiting global warming to 1.5 °C. Moreover, energy security concerns caused by Russia’s invasion of Ukraine have motivated countries to increasingly turn to renewables such as solar and wind to reduce reliance on imported fossil fuels, whose prices have spiked dramatically. Global renewable power capacity is now expected to grow by 2 400 gigawatts (GW) over the 2022-2027 period, an amount equal to the entire power capacity of China today. This massive, expected increase is 30% higher than the growth forecast just a year ago, highlighting how quickly governments have thrown additional policy weight behind renewables. The report finds that renewables are set to account for over 90% of global electricity expansion over the next five years, overtaking coal to become the largest source of global electricity by early 2025.
The war in Ukraine is a decisive moment for renewables in Europe, where governments and businesses are looking to replace Russian gas with alternatives rapidly. The amount of renewable power capacity
added in Europe in the 2022-27 period is forecast to be twice as high as in the previous five-year period, driven by a combination of energy security concerns and climate ambitions. An even faster deployment of wind and solar PV could be achieved if EU member states rapidly implemented several policies, including streamlining and reducing permitting timelines, improving auction designs and providing better visibility on auction schedules, and improving incentive schemes to support rooftop solar.
Beyond Europe, the upward revision in renewable power growth for the next five years is also driven by China, the United States, and India, which are all implementing policies, and introducing regulatory, and market reforms more quickly than previously planned to combat the energy crisis. Because of its recent 14th Five-Year Plan, China is expected to account for almost half of new global renewable power capacity additions over the 2022-2027 period. Meanwhile, the US Inflation Reduction Act has provided new support and long-term visibility for expanding renewables in the United States.
Utility-scale solar PV and onshore wind are the cheapest options for new electricity generation in a significant majority of countries worldwide. Global solar PV capacity is set to almost triple over the 2022-2027 period, surpassing coal and becoming the world's largest source of power capacity. The report also forecasts an acceleration of installations of solar panels on residential and commercial rooftops, which help consumers reduce energy bills. Global wind capacity almost doubles in the forecast period, with offshore projects accounting for one-fifth of the growth. Together, wind and solar will account for over 90% of the renewable power capacity added over the next five years.
Therefore, as we can observe an overall increase in interest in renewables, we can believe that the world will be more and more prepared to face climate change and prevent environmental catastrophes.
ESG assessment
While the product portfolio of integrated oil and gas companies is not suited to contribute to sustainable development goals, TotalEnergies is engaged in environmentally and socially beneficial activities, including solar power, alternative fuels, and access to cleaner energy solutions in developing countries, which it plans to significantly, expand until 2035. The company has established management procedures in key sustainability areas such as occupational health and safety, human rights, climate strategy, and facility safety. However, it is involved in human rights, business ethics, and environmental controversies.
Environmental Assessment
Carbon Emissions
With regard to greenhouse gas emissions, TotalEnergies is committed to shrinking its carbon footprint from production, processing, and delivery to its customers. To begin with, the company is moving forward with an ambitious action plan to reduce the greenhouse gas emissions for which we are responsible (Scope 1+2 emissions at the company’s operated assets) to a strict minimum. The company also invests in carbon storage and sequestration projects to “neutralize” its residual emissions and to be able to offer those CCS solutions to its major industrial customers. Although the speed of transition will depend on the pace of change in government policies, consumer practices, and corresponding demand, TotalEnergies has embraced the need to offer its customers affordable, less carbon-intensive energy products and to lend support to our partners and suppliers with their low-carbon strategies. Drawing on the actions already taken to revise our energy offerings and reduce carbon emissions from our operations, in 2022, TotalEnergies published an outline of how our businesses might evolve as we become a carbon-neutral energy company by 2050, together with society.
By 2050, TotalEnergies would produce:
About 50% of its energy is in the form of low-carbon electricity with the corresponding storage capacity totaling about 500 TWh/y, on the premise that it develops about 400 GW of renewable capacity,
About 25% of its energy, equivalent to 50 Mt/y of decarbonized fuels in the forms of biogas, hydrogen, or synthetic liquid fuels from the circular reaction: H2 + CO2 e-fuels,
About 1 Mb/d of oil and gas (about a quarter of the total in 2030, consistent with the decline envisaged in the IEA’s Net Zero Scenario), primarily liquefied natural gas (roughly 0.7 Mb/day, or 25- 30 Mt/y) with very low-cost oil accounting for the rest. Most of that oil would be used in the petrochemicals industry to produce about 10 Mt/y of polymers, of which two-thirds would come from the circular economy.
That oil and gas would represent Scope 1 residual emissions of about 10 Mt CO2e/year, with methane emissions almost eliminated (to below 0.1 Mt CO2e/year). Those emissions would be offset in full by projects using nature-based solutions (natural carbon sinks).
Energy Management
As an integrated oil and gas company, the majority of TotalEnergies' product portfolio comprises petroleum products that are incompatible with the need to tackle global climate change. Yet, the company has increased the share of natural gas in total hydrocarbon production from 35% in 2005 to about 47% in 2021 and expects to increase the share of natural gas in the sales mix to 50% by 2030. The company engages in several initiatives and fields of business that have the potential to contribute to the achievement of sustainable development objectives. At the end of 2021, the company had a gross renewable electricity generation capacity of more than 10 GW. TotalEnergies has the goal of expanding the power generation capacity from renewables to 35 GW by 2025. Additionally, the company promotes the development of alternative fuels such as second-generation biofuels and, through its 'Total Ecosolutions Program,' the development of products and services with environmental benefits. The company has established the target to increase the net sales share of low-carbon businesses including renewable energies, energy storage, and bioenergy from 0.5% in 2015 to 20% in 2035. Furthermore, TotalEnergies has developed the 'Total Access to Energy' program, a source of initiatives for energy solutions adapted to underprivileged populations. The company aims to sell five million solar lamps in Africa and reach 25 million people on the continent by 2025.
Social Assessment
Labor Practices
TotalEnergies’ Vigilance Plan is based primarily on the Code of Conduct, which defines the company’s values, including safety and respect for others, and their application to human rights, the environment, and people’s health and safety.
The Code particularly sets forth TotalEnergies’ compliance with the following international standards:
The principles of the Universal Declaration of Human Rights,
The United Nations Guiding Principles on Business & Human Rights,
The principles set out in the International Labor Organization’s fundamental conventions
The principles of the United Nations Global Compact,
The OECD Guidelines for Multinational Enterprises, and
The Voluntary Principles on Security and Human Rights, or VPSHR.
The Code of Conduct, which can be accessed on TotalEnergies’ website, is aimed at all employees and external stakeholders (host countries, local communities, customers, suppliers, industrial and commercial partners, and shareholders).
Supplier Auditing
The Fundamental Principles of Purchasing (FPP) set out the commitments expected from suppliers in various domains, including human rights and safety in the workplace. A company directive reaffirms the obligation to annex the FPP or to transpose them in the selection process as well as in the contracts concluded with suppliers of goods or services. The prevention of risks relating to working conditions, especially forced and child labor in the supply chain is a major area of concern and one of the company’s commitments. In this context, the company is implementing a program of engagement and assessment of its priority suppliers in these fields. TotalEnergies assesses its suppliers in terms of respect for human rights at work through on-site audits carried out by an independent third party. The company's objective is to assess the performance of its 1,300 priority suppliers by the end of 2025 in terms of sustainable development (human rights and working conditions, environment, and climate) using assessments covering all these aspects. Amongst these 1,300 priority suppliers, 500 are those suppliers that account for more than 50% of the company’s expenditures on goods and services, and 800 are identified as those representing the highest risk in terms of human rights and the environment in view of their field of activity and the countries where they operate. In 2022, 200 suppliers were audited, and an audit plan for 2023 targeting 300 suppliers was launched. In total, 430 high-risk suppliers in terms of human rights have been audited since 2016. These audits covered 160,000 suppliers' workers worldwide in 77 countries. 181 suppliers required the implementation of action and monitoring plans, of which 53 have been fully completed (validated by a follow-up audit) - positively impacting the working conditions of more than 14,000 of their employees. 128 suppliers are being monitored. A 2023 audit plan, targeting 300 suppliers, was defined in 2022, with the target to achieve 1,300 suppliers audited by the end of 2025.
Equity, Diversity & Inclusion (DEI)
The diversity of its employees and management is crucial to the company’s competitiveness, appeal, and capacity for innovation. TotalEnergies promotes an inclusive corporate culture at the highest level by the Company Diversity and Inclusion Council, which is chaired by a member of the Executive Committee. TotalEnergies intends to propose an inclusive working environment to create collective conditions that allow everyone, whoever they are, to assert their personality, ideas, and energy to bring the best of themselves to the common project and promote the development of everyone's potential. The various opinions and career paths yield innovative solutions and new opportunities. Thanks to its motivated, enterprising workforce, the company can carry out ambitious projects and provide every employee with the opportunity to give meaning to their work and find professional fulfillment. The company boasts genuine human potential with nearly 160 nationalities represented in its workforce, a presence in nearly 130 countries, and more than 740 professional skills. In order to continue the existing momentum, the Diversity roadmap sets out the targets for 2025 on gender balance and internationalizing management bodies and senior management:
30% of women in the Executive Committee (25% in 2022),
30% of women in the G70 (32.9% in 2022),
30% of female senior executives (27.5% in 2022),
30% of female senior managers (23.8% in 2022),
45% of non-French nationals’ senior executives (37.4% in 2022),
40% of non-French nationals are senior managers (34.2% in 2022).
Moreover, the company has a long-standing commitment to promoting equal opportunity, diversity, and inclusion, which constitute, for everyone, a source of development where only expertise and talent count. In 2018, the company decided to adhere to the Global Business and Disability Network Charter of the International Labor Organization (ILO) and is gradually implementing these principles in its subsidiaries.
Governance Assessment
Board Structure
Regarding TotalEnergies’ governance structure, the board chair, Patrick Pouyanné, is not independent. However, a lead independent director has been appointed to offset this concentration of power (as of May 11, 2022). Furthermore, most of the board members are considered independent. The company has established board committees in charge of audit, remuneration, and nomination, all predominantly comprised of independent board members. The company discloses its remuneration policy, as well as the compensation received by executives, and the remuneration policy provides for long-term incentives, which could facilitate sustainable value creation. The company has established a board-level committee responsible for sustainability matters, with half of its members being independent (as of July 27, 2022). Up to 45% of the short-term variable remuneration of the CEO depends on the company’s performance in occupational safety, diversity, carbon emissions, and energy efficiency and the company's position in rankings published by non-financial rating agencies. TotalEnergies has established a code of conduct and additional business ethics policies stipulating comprehensive rules regarding essential elements such as corruption, conflicts of interest, and insider dealings. Adequate compliance mechanisms are in place, including employee training on code provisions, compliance audits, risk assessments, and basic third-party anti-corruption due diligence.
Ethics
TotalEnergies operates in many different countries with disparate and complex economic, social, and cultural environments, where governments and civil society have especially high expectations of the company as an exemplar. Within this context, TotalEnergies strives to act as a vehicle for positive change in society by helping to promote ethical principles in every region where it operates. Accordingly, TotalEnergies is committed to respecting internationally recognized human rights wherever it operates, especially the Universal Declaration of Human Rights, the Fundamental Conventions of the International Labour Organization (ILO), the U.N. Guiding Principles on Business and Human Rights, the OECD Guidelines for Multinational Enterprises and the Voluntary Principles on Security and Human Rights (VPSHR). The company refrains from resorting to artificial or aggressive tax planning and in particular is committed not to create subsidiaries in countries generally acknowledged as tax havens and to repatriate or liquidate existing subsidiaries, where feasible. Furthermore, TotalEnergies is fully committed to fighting corruption and has adopted a zero-tolerance policy in that area. In addition to that commitment, it lends active support to initiatives promoting greater transparency. TotalEnergies publishes an annual report in its Universal Registration Document covering the payments made by the company’s extractive companies (fully consolidated entities) to governments and the full list of its consolidated entities, together with their countries of incorporation and operations. The company also publishes a tax transparency report, which provides additional
information on the taxes paid in its main countries of operation. TotalEnergies published a report based on the new EITI (Extractive Industries Transparency Initiative) guidelines in November 2020, which are designed to promote transparency in the trade of raw materials. In accordance with the EITI framework, of which it has been a member since 2002, TotalEnergies advocates for the disclosure by countries of their petroleum contracts and licenses.
Conclusion
In conclusion, TotalEnergies presents promising prospects for potential investors. With its compelling business model and its ability to effectively capitalize on emerging renewables, engage in growth-focused strategic acquisitions, and streamline its core business operations better, the company is well on its way to capturing growth opportunities and cementing a solid market position. Coupled with favorable market conditions and a strong ESG profile, investing in TotalEnergies is recommended to maximize gains and achieve long-term sustainable returns.
References
TotalEnergies. (2022). Universal Registration Document 2022. [online] Available at: https://totalenergies.com/sites/g/files/nytnzq121/files/documents/2023- 03/TotalEnergies_URD_2022_EN.pdf
Deloitte Research Center for Energy & Industrials. (2023). 2024 Oil and Gas Industry Outlook. [online] Available at: 网页链接
International Renewable Energy Agency (IRENA). (2022). World Energy Transitions Outlook: 1.5°C Pathway. [online] Available at: https://www.irena.org//media/Files/IRENA/Agency/Publication/2022/Mar/IRENA_World_Energy_Tr ansitions_Outlook_2022.pdf?rev=6ff451981b0948c6894546661c6658a1
Reuters. (February 8, 2023). Big Oil doubles profits in blockbuster 2022. [online] Available at: 网页链接
ESG Today. (December 12, 2023). TotalEnergies Announces a Series of Startup Acquisitions to Boost Electricity Business. [online] Available at: https://www.esgtoday.com/totalenergies-announces-a-series-of-startup-acquisitions-to-boost- electricity-business/
*Do note that all of this is for information only and should not be taken as investment advice. If you should choose to invest in any of the stocks, you do so at your own risk.
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