Green Investments Lag Behind Shareholder Gains
Oxfam’s report, published on Tuesday, May 28, highlights the disparity between green investments and shareholder gains. In 2022, CAC 40 companies paid out four times more in dividends and share buybacks to shareholders than they invested in the ecological transition. This amounts to €67.3 billion for shareholders versus €16.8 billion for the planet, according to company data aligned with the European taxonomy – a classification of economic activities based on their environmental sustainability. On average, green investments accounted for 11% of capital expenditure (Capex) for CAC 40 companies. However, the CDP (Carbon Disclosure Project) indicates that European companies should allocate 25% of their investments to transition efforts to achieve carbon neutrality by 2050.
Significant Emissions from Top Companies
The four non-financial companies furthest from a Paris Agreement-compatible trajectory are TotalEnergies, Arcelor Mittal, Airbus, and Safran. Stellantis has the largest carbon footprint in the CAC 40, with over 450 billion tons of CO2 emitted in 2022 (scopes 1, 2, and 3), followed by TotalEnergies with 428 billion (a figure Greenpeace believes is understated) and Airbus with 426 billion. However, Stellantis is rated higher for alignment with the Paris Agreement due to the European regulation banning the sale of new petrol cars by 2035, accelerating the sector’s shift to electrification. Oxfam also praises Alstom and Legrand for their promising alignment with a warming trajectory below 2°C.
A +2.7°C Trajectory
Currently, if all companies behaved like those in the CAC 40, the world would be on a trajectory of +2.7°C warming by 2100, an improvement from 2021’s +3.5°C but still not meeting the Paris Agreement’s goals. Oxfam bases this on an indicator developed by Carbon4 (co-founded by Jean-Marc Jancovici), which analyzes an enterprise’s transition dynamics based on past and current greenhouse gas emissions and future commitments to reduce its carbon footprint.
Responsibility and Urgent Action Required
Oxfam emphasizes that CAC 40 companies have unmatched influence on the economy and bear a unique responsibility to align with the imperative of ecological transition. With the necessary financial and human resources, they can lead this transition and influence their suppliers, clients, and investors. « Multinationals have no choice: they must either continue to excessively reward shareholders, who received 76% of profits in 2022, or allocate their investments to the greatest challenge of the century – the fight for the planet’s survival, » says Alexandre Poidatz, private sector and climate advocacy officer for Oxfam France and author of the report.
Call for Binding Eco-responsibility
Oxfam calls for companies to develop an aligned strategy with a coherent investment plan and to cap shareholder payouts. They estimate that 32% of the amounts paid to CAC 40 shareholders in 2022 as dividends or share buybacks could have covered their needs in ecological transition investments. To end « short-termism » in corporate management, Oxfam also recommends banning dividend payments when non-financial goals are not met, audited by statutory auditors, and revising executive compensation to eliminate stock market criteria and tie at least 50% to achieving ecological and social objectives.
Government Role in Eco-responsibility
Oxfam urges the government to implement binding eco-responsibility for large companies. « It is time for the state to balance its position against the market by conditioning public aid and access to public contracts on investments in transition and a climate strategy aligned with a global +1.5°C trajectory, » concludes Alexandre Poidatz.
Improved Transparency
Oxfam’s report notes progress in CAC 40 companies’ transparency in extra-financial reporting. In 2020, only ten companies provided comprehensive greenhouse gas emissions reports; today, 37 do. This is partly due to regulatory acceleration, such as the arrival of the CSRD (Corporate Sustainability Reporting Directive), which mandates carbon accounting for all companies with over 250 employees from 2025. Since last year, French law also requires the inclusion of scope 3 emissions – indirect emissions – in carbon accounting.
