TotalEnergies appeals June 25 climate ruling as legal fight escalates

TotalEnergies SE is fighting a French court order that would force the oil major to restructure its business around climate goals.

TotalEnergies SE on Monday said it will appeal a Paris court's June 25 judgment under France's duty of vigilance law, a case that could reshape how European energy companies balance fossil fuel production with climate commitments.

"We believe the court exceeded its authority in dictating operational strategy to a publicly traded company," a TotalEnergies spokesperson said. "The appeal process will allow for a full review of the legal basis for this decision."

The Paris court's ruling ordered TotalEnergies to align its business activities with the Paris Agreement's climate objectives, marking the first time a French court has used the 2017 duty of vigilance law to mandate climate-related corporate restructuring. The law requires large French companies to identify and mitigate environmental and human rights risks in their supply chains.

If the appeal fails, TotalEnergies could face costly operational restructuring, forced reductions in fossil fuel investments, or significant financial penalties. The case also emboldens climate activists who have filed similar lawsuits against Shell Plc and BP Plc, potentially pressuring the entire European oil and gas sector.

The lawsuit was brought by a coalition of environmental groups including Notre Affaire à Tous and Sherpa, who argued TotalEnergies' climate strategy was insufficient to meet France's commitments under the 2015 Paris Agreement. The court agreed, finding the company's current business plan did not adequately account for the transition to a low-carbon economy.

TotalEnergies produced about 2.7 million barrels of oil equivalent per day in 2025 and has invested more than $5 billion in low-carbon energy since 2020, according to company filings. Those investments, however, represent a fraction of its total capital expenditure, which exceeded $16 billion in 2025, with the majority still directed toward oil and gas projects. The company's annual report shows oil and gas spending accounted for roughly 70 percent of the $16 billion total.

The duty of vigilance law, enacted in 2017, has been used in only a handful of cases since its passage. A 2023 case against retailer Casino Guichard-Perrachon over human rights in its supply chain was the first major test of the statute. The TotalEnergies ruling extends the law's reach into climate policy, a domain traditionally left to legislative and executive branches.

The appeal will be heard by France's Court of Cassation, the country's highest judicial body, though no hearing date has been set. Legal experts expect the process to take at least 12 to 18 months, leaving TotalEnergies' current strategy unchanged in the interim. During that period, the company's capital allocation plans and emissions targets remain in effect.

The case has drawn attention from institutional investors and proxy advisors, who are increasingly weighing climate litigation risk in their voting decisions on energy company boards. A ruling against TotalEnergies could accelerate demands for more aggressive emissions reduction targets across the sector. Shares of TotalEnergies traded lower Monday as investors assessed the legal overhang, with the stock falling about 2 percent in Paris trading.

This article is for informational purposes only and does not constitute investment advice.