We are entering the Golden Age of Renewable energy, filled with increased public pressure and investment from both the public and private sector. This change in the market towards renewable energy has inspired TotalEnergies, a French oil and gas company, to invest more into renewable energy, further driving hope in our efforts to combat climate change.
Still widely unknown to the international community, TotalEnergies is gaining recognition around the world in its successful efforts to redefine standards around renewable energy for the oil and gas industry. With around 105,476 employees and 140.7 billion USD revenue, TotalEnergies is the 7th largest oil company in the world. What sets TotalEnergies apart from its competition—namely BP, Shell, Exxon, and Chevron— is their mission “to a world-class player in the energy transition.”
There were several reasons for TotalEnergies transition into more renewable energy production, and so far its transition looks very promising. Market and public pressure were definitely big factors, but there was also a change in leadership after the death of the CEO. Since then, financial statements from the last seven years have demonstrated strong cash flow that generate around $3 billion each year for investments in clean energy. Currently, TotalEnergies doesn’t generate much cash flow from renewables but seeks to increase its renewable energy capacity by a factor of 10 in the next decade up to 100 GW—an energy output equivalent to 312.5 million solar panels.
It seems as though TotalEnergies is not only financially, but also systematically equipped for this transition. TotalEnergies unique business model gives them a competitive advantage. Their Vertically Integrated Business Model helps the company reinvent and diversify their energy offering to favor renewable and decarbonized energies and promote the economical and rational use of fossil fuels.
Aside from financial statements, TotalEnergies has addressed maintaining stakeholder support during this transition effectively. Since 60% of their employees are shareholders, TotalEnergies has identified its main risks and challenges concerning internal management. These include ensuring a high level of commitment, maintaining employees’ long-term employability, and attracting and retaining talent based on the key skills.
TotalEnergies’ long term goals are ambitious but realistic given TotalEnergies strong financial standing and reputation, making it very appealing to investors. Michele Della Vigna, a commodities business unit leader in Goldman Sachs, believes that oil companies such as TotalEnergies will play a much larger role than people anticipate in the transition of energy. The company plans to decrease the sale of petroleum by 30% by 2030, have clean energy sales reach 15% of the company’s total sales by 2030, and reach net-zero carbon emissions by 2050. TotalEnergies has already kickstarted its efforts with solar plant projects in Qatar and projects supplying electricity to over one million homes in the U.K.
TotalEnergies is raising the standards for big oil and gas companies all around the world. The strategy truly fits the modern stakeholder: one that is very socially active and demands a genuine, unique approach. Their strong marketing headlines claiming carbon neutrality by 2050 may not be just greenwashing as my company analysis has proven they are very ready for this transition!