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Contents

• Introduction
• 1. Climate change risks for energy sector companies and climate change governmental and institutional policies impact on energy companies operations
• 1.1 Climate change risks for energy sector companies
• 1.2 Climate change governmental and institutional policies impact on energy companies activities: incentives to switch to renewable energies
• 2. Energy companies reactions to climate change issues: PR strategies and business decisions
• 2.1 "Total" case study
• 2.2 "Engie" (ex-"GDF Suez”) case study
• 2.3 "Areva" case study
• 3. Climate change adaptation strategies for international energy companies
• 3.1 Impediments to transformation for energy sector companies
• 3.2 Climate change adaptation strategies for international energy companies
• Conclusion
• References
• Appendix

Introduction

Climate change problem is one of the most topical issues nowadays. Environmental organizations and the countries' presidents, CEOs of the companies and even actors receiving the Oscar awards - all of them are referring to the climate change problem in their speeches. In 2016 world economy forum in Davos climate change was for the first time addressed as the major threat to the world economy. Gandel S., Here's What World Leaders Think Is the Greatest Risk for 2016, 2016 It was considered to have greater potential damage than weapons of mass destruction, water crises and large-scale involuntary migration.

The climate change issues are discussed on a global level by the countries' leaders. Recently the Climate Conference in Paris (COP21) has been held. The conclusions of the Conference will definitely affect lives of people all over the world, since 196 parties are going to sign the Paris Agreement.

Nowadays it is impossible to imagine the modern economy without the global energy market. The fuel and energy complex plays a prominent role in the economy of every country ensuring its development and providing fuel and electricity for all industries. Hence, the problem of energy supply becomes a key issue for each independent country as well as for the whole world. However, it is energy sector which is usually considered to be the major contributor to climate change because of amount of carbon dioxide (CO2) emissions the industry causes. It means that energy companies should adjust their businesses to climate change policy by implementing adaptation strategies and even refocusing their activity.

For this research three French companies were chosen: "Total”, "Engie" and "Areva”. France can be addressed as one of the most developed countries as regards to energy sector and energy policies: the first public places of Paris were provided with electricity in 1877 and in the beginning of the XX-th century the construction of the first hydropower stations was held. Being the Europe's largest producer and the net exporter of electricity, France has an experience in energy sector, which is impossible to overestimate. Besides, the main energy policies focuses of the country were rather controversial for a long period of time: nuclear sector development from the one side was accompanied by energy saving technologies and renewable energies (solar, wind, geothermal, etc.) promotion. As all three companies are closely connected to the government of the country (either through the state's existing or former stakes or through collaboration and joint projects) it is quite important to analyze these companies activities and policies related to the environment and climate change.

The goal of the research is to examine how energy companies adapt to climate change addressing it as a risk and which strategies they choose to minimize this risk.

In order to achieve this goal the following objectives were set:

· to systematize the basic risks the energy sector companies can face as well as their possible reactions;

· to review the major institutional and global agreements on climate change and to analyze their impact on energy companies' activities;

· to analyze the peculiarities of three French international energy companies policies, projects and commitments in climate change adaptation;

· to retrace the main criticism from environmental organizations as regards to these companies' activities;

· to reveal the major impediments for a deep transformation of energy sector companies;

· to suggest an adaptation strategy for energy sector companies.

The object of this work can be marked as climate change risks for international energy companies. The subject, in turn, reflects the main strategies implemented by major French energy companies to minimize climate change risks. Finally, the hypothesis of this research can be interfered in the following assumption: international energy companies have the constraints to refocus their businesses, to transform for climate change adaptation so their current activities and policies are inconsistent and insufficient to mitigate climate change consequences.

To confirm or to refute this hypothesis the following methods were used:

· In the theoretical part of the research a deep analysis of the existing relevant literature was conducted. In particular, various publications by economists, scientists and journalists were consulted. Furthermore, the second subchapter of the theoretical part included the review of the institutional policies and global agreements, such as the United Nations Framework Convention on Climate Change, the Kyoto Protocol and the Paris Climate Change Agreement.

· In the analytical part of the research qualitative and quantitative analyses were implemented for each case study. The former included the research of the companies' websites and official publications (reports, policies, press releases) as well as provided criticism from ecologists and environmental organizations. The latter comprised carbon dioxide emissions dynamics and current investment in renewable energies by each company.

· For the whole research relevant news, media and professional articles were reviewed and taken into account.

1. Climate change risks for energy sector companies and climate change governmental and institutional policies impact on energy companies operations

1.1 Climate change risks for energy sector companies

According to "The United Nations Framework Convention on Climate Change" (UNFCCC) climate change is a change of climate which "is attributed directly or indirectly to human activity that alters the composition of the global atmosphere and which is in addition to natural climate variability observed over comparable time periods" The United Nations, The United Nations Framework Convention on Climate Change, 1992. Researchers and scientists still argue on whether the human activity is the only cause of climate change but the majority agrees that anthropogenic activity impacts climate change in a varying degree. This majority in 2010 accounted for more than 97% of all the researchers engaged in climate change issue Anderegg R. L., Prall J. W., Harold J., Expert credibility in climate change 2010 . The Intergovernmental Panel on Climate Change (IPCC) also concluded, that human activities, particularly emissions of carbon dioxide, are very likely to be the dominant cause of climate change IPCC, Renewable energy sources and climate change mitigation: summary for policy makers and technical summary, 2012. This degree of probability in scientific world is equal to 95-100% and it means that scientists are nowadays as confident in anthropogenic causes of climate change as in the connection between smoking and lungs cancer Borenstein, "What 95% certainty of warming means to scientists”, 2013.

Energy sector is usually considered as the major contributor to climate change because of amount of carbon dioxide emissions the industry causes. According to the National Oceanic and Atmospheric Administration (NOAA) there is a direct correlation between the anomalies of annual average temperatures of the planet and the CO2 concentration in the atmosphere (see p.55, Appendix, Graph 1). The energy sector influence might become evident if we observe the share of the world's CO2 emissions from burning of fossil fuel: in 2013 it reached almost 90%. (see p.55, Appendix, Graph 2).

At the same time, these are energy companies who face major challenges from climate change. They are suffering climate change risks, recognizing the importance of the biophysical environment and implementing strategies into their regular management practices in order to combat environmental issues. Jermier et al, The new corporate environmentalism and green politics, 2006 This phenomenon is known as corporate environmentalism - the process by which firms integrate environmental concerns into their decision-making process.

There are various perceptions of climate change interrelation to businesses. The British economist Nicholas Stern stated that climate change is "the largest market failure" and that "the benefits of strong, early action on climate change outweigh the costs” Stern N., Review on the Economics of Climate Change, 2006. In other words, he argued that climate change is a problem, which need to be fixed with policies and corporate actions. In his review, Stern proved, that although greenhouse gas (GHG) emissions are driven by economic growth, combating climate change is feasible and consistent with continued growth. It requires transition to low-carbon economy, which undoubtedly regards competitiveness challenges for corporations, but at the same time brings new opportunities for them.

Stern suggested the following actions, that corporations should take to minimize their impact and combat climate change:

· emissions trading as a way of promoting cost-effective reduction;

· development of "green" technologies through R&D;

· actions to reduce deforestation;

· implementation of adaptation strategies.

It seems that nowadays the majority of big corporations are concerned with climate change issues. According to the Carbon Disclosure Project (CDP) organization, in 2015 552 companies have responded to Carbon Action program and 77% of them have carbon-emissions reduction targets Carbon Disclosure Project, Carbon Action: which sectors are ahead of the curve?, 2015 . Corporations implement sustainability programs and policies, create specific departments, market their products as "green" and organize tree-planting events as a part of their team-building and CSR (corporate social responsibility) activities.

They seek to make climate change manageable to improve the image of the company, they use the trend to increase the profits. Unfortunately, they also obstruct desperately needed and more radical alternatives, which mainly happens because of the reasons lying under such responses.

Corporate responses to climate change are often shaped by the need to react to a broad range of risks and opportunities. However, such responses sometimes produce further unforeseen consequences for companies. "British Petroleum" ("BP”) rebranding into "BP - Beyond Petroleum" in 2000 is probably one of the most famous examples of corporate engagements in climate change issue. The rebranding was meant to portray "BP” as an energy, not just an oil company. The new logo of the company was made to show the company's "commitment to the environment and solar power" and promote the new "BP” as "the supermajor of choice for the environmentally-aware motorist” Maclean W., BP Goes Greener with 'Beyond Petroleum' Rebrand, 2000. However, in reality, "BP” did not disguise its plans to ever-increase its oil and gas exploration and to grow its core business. Furthermore, Beder criticized "BP” for using rebranding and emphasizing solar investments to withstand the critics against its Arctic exploration Beder L., BP: Beyond Petroleum?, 2002. She underlined, that though the company had invested in solar power, it spent even more money on "green" reputation. "An oil company might invest in solar energy and admit that global warming should be prevented, but it will do all it can to ensure it can go on drilling for fossil fuels and expanding its markets for them” - she stated. In 2007, "BP” disbanded its renewable energy divisions and refocused on oil exploration and production. In 2010, after an oil spill in the Gulf of Mexico the company was publicly accused in "greenwashing” and hypocrisy. Thus, using climate change and environmental issues to cover its reputational complications only brought new problems to the company.

The majority of corporations, however, take into account environmental issues because they consider climate change itself as a risk that should be assessed, managed and minimized.

According to Engel, Enkvist, and Henderson, climate change risks for companies can be divided into two major categories: value-chain risks and external stakeholder risks Engel H., Enkvist P. A., Henderson K., How companies can adapt to climate change, 2015 . The former include physical, prices and product risks which are mostly connected with extreme weather conditions and consequent damages to infrastructure, price volatility or losing market share of the product. In their research, Engel, Enkvist, and Henderson underline, that to minimize these risks the companies can either "design a sustainability approach” or change business strategy aligning its goals to climate change mitigation and adaptation. External stakeholder risks, in their turn, are divided into ratings, reputation and regulation risks. Ratings risks mean the probability of higher cost of capital due to carbon pricing. Regulation risks are connected with governmental and institutional climate policies affecting companies' business activity. These policies will be reviewed in detail in the second part of this chapter. Finally, reputation risks are based on public opinion on the company's activity. For instance, if the society considers the company's actions to be harmful for the environment the company may lose its profits.

Engel, Enkvist, and Henderson revealed the level of climate change risk that the companies from various sectors are exposed to. According to their evaluations, energy sector (oil and gas) companies are mostly exposed to regulation and reputation risks. These companies have moderate exposure in price and product risks and moderate-high exposure in physical and ratings risks. Furthermore, this evaluation proves that energy sector companies take more climate change risks than companies in any other industry. Thus, they are not only the world's major producers of carbon dioxide emissions which forces climate change but the largest climate change risk-takers as well.

Wright and Nyberg considered the other differentiation and divided climate change risks in four categories: physical risks, regulatory risks, market risks and reputational risks Wright C., Nyberg D., Climate change, Capitalism and Corporations. process of creative self-destruction, 2015. Let us revise all these types of risks in particular as well as suggest the possible corporate reactions to them.

Physical risk is a risk of extreme weather events provoked by climate change leading to threats to operations and infrastructure. For energy sector companies this risk might result in breaks in oil and gas pipelines, accidents at nuclear plants, etc. To manage this risk companies can use climate modelling, plan various scenarios for physical events, safeguard and relocate physical infrastructure, develop emergency strategies for extreme weather events or sell off physically vulnerable activities. Physical risk is probably the most addressed in all corporate climate change mitigation policies. It directly affects business operations leading to huge costs for companies. In 2015 the International Energy Agency even published "Making the energy sector more resilient to climate change” brochure in which the Agency provided various techniques for energy sector companies to prevent technical disruptions and infrastructure damages caused by extreme weather conditions and climate change consequences.

Regulatory risk is a risk of legislative regulation of carbon emissions via "carbon taxes”, pricing of greenhouse gas emissions in a carbon market or mandatory restrictions. Some examples of minimizing those risks can be: lobbying against carbon pollution regulation, building coalitions with opponents of action on climate change, investing in low-carbon technologies and renewable energy to reduce carbon emissions intensity, incorporating carbon pricing in investment decisions, adopting a `leadership' position advocating market forms of carbon regulation, voluntary reporting of carbon emissions to avoid mandatory requirements.

Market risk may happen when, for instance, competitors gain advantage via new "green" technologies and products. The majority of large international energy companies also embrace this type of risk because their customers might need low-carbon technologies or decrease in CO2 emissions. To mitigate this type of risk companies invest in R&D to identify and create "green" products and services, scan the market for competitive threats in order to mimic new technologies and products, takeover and acquire "green" companies.

Reputational risk occurs when consumers view companies' activities as environmentally harmful which may result in declining sales and reputation. The companies usually try to improve their image and reputation through "green" marketing and branding of products and services, developing alliances with environmental NGOs or focusing on job creation and various CSR programs emphasizing that a company is a responsible corporate citizen. However, for energy sector companies, who are historically considered as the major polluters it becomes rather hard and costly to cover reputational risks.

This translation of the issue into various types of risks has given energy companies to gain powerful advantages in engaging with climate change. It allowed to break the complex concept of climate change into smaller components with understandable probability which can be tackled in a short-term perspective with specific actions. In the second chapter we will see, how the companies can implement these risk-management strategies in their business activity responding on a particular type of climate change risk with a specific reaction However, Wright and Nyberg criticized such an approach as being not sustainable because the long-term risk of climate change activities for business is far greater than a simple "reaction” plan. They state, that climate uncertainties cannot be seen as manageable and regarded as opportunity for profit. According to them, such an approach closes off the possibility of the dramatic emissions reductions needed to avoid climate change because energy corporations keep "business as usual" scenario simply adding environmental features in their marketing strategies and climate change issues in their risk-management policies.

1.2 Climate change governmental and institutional policies impact on energy companies activities: incentives to switch to renewable energies

In the following part of the research the influence of institutional global policies on climate change on energy sector will be reviewed and analyzed.

The first attempt to regulate the climate change issue on international level was taken by the United Nations Framework Convention on Climate Change (UNFCCC). It was an international environmental treaty negotiated in 1992 and entered into force in 1994. Its objective was to "stabilize greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system” The United Nations, The United Nations Framework Convention on Climate Change, 1992. However, no limits on greenhouse gas emissions for individual countries were set in this agreement and no mechanisms to achieve this goal were previewed. The treaty was followed and extended in 1997 by the Kyoto protocol signed by 192 countries by 2009. The protocol established legally binding obligations for developed countries to reduce their greenhouse gas emissions in the period 2008-2012 The United Nations, Kyoto Protocol to the United Nations Framework Convention on Climate Change, 1998. Introducing no goals for developing countries the Protocol, at the same time, allowed nearly 40 developed countries to meet these targets by paying developing countries to cut emissions on their behalf, through an international market in carbon offsets. Many analysts consider that the Protocol's biggest, most direct business impact was to spawn an international trade in emissions permits. To meet its Kyoto targets, the European Union (EU) introduced an emissions trading scheme, which put a limit on the carbon emissions of heavy industry. That, in turn, led to a thriving trade in carbon offsets between European factories and power plants and low-carbon projects in developing countries. Surprisingly, the biggest winners from carbon trading were big industrial polluters mainly consisted of steel and energy sector companies. According to not-for-profit campaigning organization Sandbag, in the early days of the EU scheme, they received generous allocations of free emissions permits, which they then sold on the carbon market, earning windfall profits Sandbag, Joint Implementation and the EU Emissions Trading System, 2010.

The Paris Climate Change Agreement ought to be signed between 2016 and 2017 is probably the most large-scale climate agreement since Kyoto Protocol. In 2015 196 parties have agreed to its language, and in doing so have acknowledged that controlling climate change requires a global mitigation plan. In contradistinction to the Kyoto Protocol it will regard not only developed countries but developing ones as well. The Paris Agreement sets an unambiguous goal to hold global warming to "well below 2°C" and to pursue efforts to limit the temperature increase to 1,5°C above preindustrial levels Gallagher L., ”Political Economy of the Paris Agreement”, 2015. Key to that process is the submission by Parties of "nationally determined contributions" (NDCs) which are high-level policy plans setting out what approach each country will take to reduce emissions and contribute to the global goal. These "nationally determined contributions" will start in 2020 and will be reviewed every five years.

From the one side, the Paris Agreement creates no direct restrictions on the extraction, release, or use of fossil fuels. Even in countries where the Agreement would automatically constitute a source of national law, the provisions are not drafted to create direct obligations on energy companies or to impose liability for fossil-fuel-based energy operation. From the other side, the Agreement will definitely impact energy sector companies as the "below 2°C goal” is unachievable and even impossible without dramatic changes in energy sector corporations activities.

According to Gigounas, Gunst and Webb, the Paris Agreement will have a tremendous effect on global energy sector and national energy policies Gigounas G., Gunst A. Webb S., The UNFCCC Paris agreement: impressions from the negotiating table for the energy sector - and 10 key points about what comes next, 2015. This impact will mainly regard the following issues:

· A proportion of carbon assets could become stranded if the Agreement limits the use of fossil fuels and no effective technology of CO2 absorption is developed. If these reserves are burned at current rate it would lead to the growth of temperature above the limit of 2°C.

· The agreement will definitely cover carbon pricing. The inclusion of carbon pricing in the financial analyses of projects and businesses, notably in the context of lending and investments, is on the rise. In June 2015, six major oil and gas companies called upon governments to introduce carbon pricing systems to lower CO2 emissions.

· Energy companies will have to include a risk and business development assessment of NDCs in the countries where they are active, because these will influence a state's approach to fossil fuel extraction and consumption. This will particularly affect international energy corporations.

· Undoubtedly, the Agreement will create new areas of business, notably for renewable energy generation, energy efficiency, storage and sinks. For energy sector companies this may lead to larger investments in renewables and increasing of "green" energies in their portfolio.

Businesses also actively participated in Paris climate summit. For instance, to support the Paris Agreement 39 French companies (major French energy giants "Total”, "Engie" and "Areva" among them) made a firm commitment to combat climate change French Business Climate Pledge, 2015. From 2016 to 2020, these companies plan to invest at least 45 billion euros in industrial projects and R&D devoted to renewable energy, energy efficiency and other low carbon technologies. Over the same period, they also intend to provide bank and bond financing of at least 80 billion euros for projects contributing to the fight against climate change.

As for the oil markets, business analysts consider Paris Agreement to be a huge challenge for oil companies. Before the Conference top-10 international oil and gas companies (French "Total" among them) issued Joint collaborative Declaration. Being the members of Oil and Gas Climate initiative (OGCI), who together provide nearly 10% of the world's energy, the companies expressed their collective support for an effective global climate change agreement Oil and Gas Climate Initiative, Joint Collaborative Declaration, 2015. They underlined that they had already taken significant actions to reduce GHG footprint and called for an "effective" agreement with clear targets at the Paris Climate Conference. Following the conference, the OGCI members welcomed the Agreement with the following commitment:

"The OGCI members will continue to collaborate on efficiency, natural gas, carbon capture and storage, renewables, long-term solutions, and partnering on multi-stakeholder initiatives. Going forward, we will continue in our efforts to play our part in helping lower the current global emissions trajectory. ”

As it was noted above, energy sector companies will also be affected by NDCs - national targets and policy plans on climate change issue. However, as long as these policies are not adopted yet, it is essential to analyze existing commitments of the EU and France to understand the motives of French energy companies activities in climate change mitigation.

The EU climate and energy policies are based on several important objectives. Firstly, these policies presume targets set in 2007 by the EU leaders and known as 20-20-20 objectives. In particular, these goals comprised 20% energy production from renewables, 20% increase in energy efficiency and 20% reduction in greenhouse gas emissions (compared to 1990) by 2020.

Secondly, according to 2030 climate and energy policy framework the EU countries should reduce greenhouse gas emissions by at least 40% below the 1990 level, increase the share of renewable energy as well as energy efficiency level to at least 27% and reform the EU emissions trading system. Besides, the 2030 policy proposed a new governance framework based on national plans for competitive, secure and sustainable energy as well as a set of key indicators to assess progress over time. The European Council agreed that a reliable and transparent governance system will be developed to help ensure that the EU meets its energy policy goals. European Commission, Communication from the Commission to the European Parliament and the Council, 2014.

Furthermore, in 2008, the European Union embarked reforms in progressive liberalization of the internal electricity and gas markets through the third internal energy market package, the so-called "Third Package”. Its implementation led to three main achievements:

1) more harmonized cross-border trade and network rules;

2) greater independence of national regulators and transmission system operators and their co-operation through newly created European bodies - the Agency for the Cooperation of Energy Regulators (ACER) and the European Networks for Transmission System Operators - Gas and Electricity; and 3) the enforcement of competition in the energy sector, supporting further market opening.

Finally, according to the "European Energy Security Strategy” all the countries-members should undertake measures to prevent and mitigate gas and oil supply disruption risks, to protect critical energy infrastructure, to moderate internal energy demands and to build a well-functioning and fully integrated internal market.

The companies analyzed in the second chapter are state-owned to a different degree. Therefore, French energy policy will not only affect their business inside France but also might have impact on their decision-making process.

French energy policy at the modern state of development correlates in many ways with general EU policies. However, it has its own peculiarities.

The great attention traditionally given by the leadership of the Fifth Republic to energy questions is explained by the lack of the major energy resources in France. Except for the water resources, the country was unable to meet the needs of the economy at the expense of its own energy resources. The dependence on imports had been augmenting continuously until the crisis in the 1970s. Only the government regulation of the economy allowed to eliminate completely the effects of the crisis.

The modern strategy of France in the field of energy, which is nowadays the most important element of the economy can be divided into several areas. Kриницкий K., Энергетика Франции: ставка на атом, 2011

First of all, it includes the support of the development, modernization and research in the nuclear energy sector. Over the last 50 years in France the radical modernization of the energy sphere has been held, and as a result, the country has moved from coal to nuclear power, which has become a priority for the industry. It is also crucial to mention that nowadays from 70 to 77% (depending of the year) of French electricity is produced on nuclear energy and 100% imported uranium. It is the highest proportion by far than in any other country. Furthermore, French nuclear power plants make the country the leader of electricity production among the EU member states and a net-exporter of electricity to the neighboring countries. However, nuclear energy is quite a controversial issue for the country and nowadays it is starting to lose governmental support. After Fukushima disaster in 2011, which led to minimization of nuclear energy programs in Germany, Belgium and Switzerland, French society was split into proponents and opponents of use of this type of energy. The former president Nikolas Sarkozy declared in 2011 that he does not intend to decrease the amount of nuclear power stations in the country and that he is disappointed with these prejudices on the idea of progress. Российское атомное сообщество, Большинство трезвомыслящих политиков мира выступают за развитие атомной энергетики, 2012 This question became one of the most discussed issues during election race in 2012 due to the diametrically opposite views of main candidates. The acting president promised to diminish French dependence on nuclear energy from 75% to 50% by 2025 as well as to close 26 out of 58 nuclear stations in the country (including the oldest French nuclear station Fessenheim closing by 2016.) In 2014, the Parliament approved the law on decreasing nuclear dependence, however, the stations closing process is delayed. According to French specialists it will cost from 2 to 8 billion euro depending on the amount of compensations, closing operations and renewable sources costs LeFigaro, Le coup d'envoi est donnй pour la loi de transition йnergйtique, 2014. Still, no radical changes in the industry were made. Despite this fact, this stream of French energy policy will probably lose its paramount importance in the nearest future although a transition period is required to implement such drastic changes.

Secondly, French policy concerns the active participation of the state in the development of technologies in the renewable energy sector. The country is taking numerous measures to achieve a 23% share of renewable energy sources in the total energy production by 2020 and a 32% share by 2050. Firstly, according to the Minister of Energy of France Segolene Royal, the new governmental strategy expressed in the law mentioned above will allow for collection of 10 billion euros that will be used to attract new investments in renewable energy sector Renewable energy center, France will allocate 10 billion for renewable energy projects, 2014. Furthermore, France is aimed to become a global leader in sea renewable energy sources: electric power is produced with turbines which use the energy of sea tides. One of the strongest European tides Raz Blanchard will become the natural advantage for France in implementation of this project. In addition, the French government continues the development of wind and solar energy sectors by building new power stations in the former and granting a high prices for the latter. However, the photovoltaic way of electricity production remains the most expensive one, so the government referred to German experience and made a decision to diminish entrepreneurial activity in this area.

Thirdly, the policy assumes the support and the promotion of energy saving technologies, the solution of environmental issues associated with energy resources using, as the oil crises of the 70s pushed the French leadership to the introduction of energy-saving measures. As a result, the Ministry of Industry and Science created a new body - the Agency for energy efficiency. One of its main tasks is to promote energy savings at home and at work. The agency has even established the special award for energy savings. Since then, France is constantly developing and supporting energy conservation policy by households and industries. For instance, the law in decreasing nuclear dependence and renewable energy investments also presumes the system of privileges and incentives for drivers with ecological car engines, 30% deduction of heat-insulation costs from the taxable incomes of householders and the establishment of 1,5 billion euro fund for subsidizing of wasteless and energy profitable buildings.

It is obvious that there exists a contradiction in French major streams of energy policy: long lasted support of nuclear energy and the country's dependence on nuclear power is opposed to renewable energy investments and energy saving technologies promoting. Nevertheless, France intends to be among the first states to complete its internal ratification procedures concerning the Paris Agreement, so this contradiction will probably become smoother in the nearest future.

To summarize the first chapter of the research the following conclusions can be made:

· energy companies nowadays perceive climate change as a range of various types of risks and have specific reactions to minimize them;

· this may lead to "business-as-usual" model which does not require deep transformation of the business but presumes specific actions for risks mitigation;

· climate change issue is widely discussed on international level by the countries'leaders - the recent Paris Climate Change Agreement might push the countries and international energy companies to reorient their energy policies and business activities.

2. Energy companies reactions to climate change issues: PR strategies and business decisions

The following chapter will be devoted to the major French international energy companies and climate change influence on their business activity. This impact will be regarded as the companies' projects and investments in renewable energy, their engaging in environmentally positive and negative projects, their carbon emissions policies and commitments and other climate change mitigation and adaptation activities. Furthermore, their real business decisions will be compared to their PR strategies and official websites information. The majority of data was taken from official websites and annual reports of the companies, however, other sources were also consulted.

The choice of the companies was determined by their size and history, thus, the most influential French companies in each sector were reviewed.

2.1 "Total" case study

"Total" - is one of the largest French multinational oil and gas companies and one of five "Supermajor” world oil companies. Founded in 1924 upon the governmental decree aimed at reinforcement of French positions on international oil market and named "Compagnie franзaise des pйtroles” ("CFP”), literally the "French Petroleum Company”, "Total" from the start was regarded as a private sector company in view of its listing on the Paris Stock Exchange in 1929. With operations in more than 130 countries and 100 000 employees all over the world, "Total" produces, refines and markets oil as well as manufactures petrochemicals. "Total" possesses six refineries in France which are able to process 45 million tons of oil per year. Having 898 subsidiaries consolidated into the group results, together with significant affiliate investments and joint ventures, "Total" is also a major player in natural gas and LNG investments. By its turnover "Total" is the first company in France, fifth company in Europe and eleventh enterprise in the world. According to Forbes rating of top-25 world energy companies, "Total" ranks 13th in oil production with 13,5 million tons in 2014.

Let us discover the main ecological and climate change activities and projects of "Total”.

In 2015 the company publicly declared to withdraw from coal production and marketing so that by the end of 2016 not to be involved in coal business. According to the CEO of "Total" Patrick Pouyannй such decision was mainly determined by ecological and environmental reasons. "We cannot claim to be providing solutions to climate change while continuing to produce or market coal, the fossil fuel that emits more greenhouse gas than any other. In addition to withdrawing from mining, we have also decided to divest our coal marketing operations," - he pledged.

In general, "Total" policy in combating climate change can be divided in the following areas:

· Increasing the percentage of natural gas - "the cleanest fossil fuel” - in the energy mix. This energy source accounted for 50% of Total's production in 2014.

· Developing renewable energies through its affiliates.

· Enhancing the energy efficiency of the company's facilities, products and services.

Analyzing company's projects in renewable energy, it is possible to highlight solar power. Since 2011, "Total" possesses 66% stake in "SunPower” company which designs and manufactures high-efficiency photovoltaic cells and solar panels. It employs 7000 people around the world and its revenue accounted to 2,4 billion dollars in 2014. According to Bloomberg data report, the cost for "Total" to become a majority shareholder was equal to 1 566 million dollars in 2011 and additional 138 million dollars in 2012.

"Sunpower” affiliate makes "Total" number 2 in solar power worldwide. Through its affiliate "Total" aims to become a global leader in solar power. According to the analysts of the company, the share of solar power and other renewables in the global energy mix will increase by 7% by 2035, from 13% to 20% which probably motivates "Total" to consider its investments in "Sunpower” as a long-term strategic decision.

The other renewable focus for "Total" lies in biomass energies. The choice of biofuels was substantiated by the European Union Renewable Energy Directive set in 2009, which states that the target share of renewables, mainly biofuels, in transportation fuels in 2020 should be equal to 10%. Biofuel is a fuel produced from living organisms or from metabolic by-products (organic or food waste products). In order to be considered a biofuel the fuel must contain over 80% renewable materials. Biofuel can be divided into four main types: ethanol, biodiesel, methanol and biobutanol. All of them have some differences in comparison to their fossil fuels equivalents. For instance, biodiesel is more corrosive to engine parts than standard diesel, which means that engines have to be specifically designed to "take” biodiesel. It burns cleaner than diesel, producing less carbon dioxide and fewer sulfur compounds. However, biofuels are not totally renewable: the global energy demands are far exceeding the world's ability to grow biomass. Furthermore, lands using for biomass growing necessarily detracts resources from the process of growing food. In other words, with the growth of population, demands for energy and food grow as well which means that we do not possess enough resources for both. It is especially important for developed countries: the use of land for biofuels will have a tremendous impact on cost of food.

Since 2010 "Total" has a 17% share in "Amyris” company. Created in 2003, "Amyris” is active across the biotech value chain, and has both research laboratories and a production plant. As Bloomberg data report follows, "Total" has invested 366,9 million USD in acquisition of its share of the company.

In April 2015 "Total" has also announced its plan to build a biorefinery La Mиde in southeastern France. La Mиde will be able to produce 500 000 metric tones of biodiesel annually and will be the first biorefinery in France.

However, information on real (non-initial) investments made by "Total" to "Sunpower” or "Amyris” can be found neither on official websites of both companies nor in financial reports. Non-current assets of "Sunpower” in 2014 accounted for 1 954 million dollars which is equal to 1.3% of "Total" consolidated non-current assets (151 281 million dollars). "Amyris” reports 142 million dollars of non-current assets in its 2014 report which is less than 0,1% of "Total" non-current assets. The lack of figures on real annual investments of the company to renewable energies allows to assume that renewable sector is still playing the minor part in the company's activity. These numbers confirm evaluations by the Carbon Tracker Initiative, a financial thinktank, which states that oil companies were spending between 1 - 2% of their research and development budget on renewable energies, and that the figure had not changed in years Carbon Tracker Initiative, Oil and gas majors: fact sheets, 2014.

The company is often accused in hypocrisy and "greenwashing”. In 2012 ex-CEO of "Total" Christophe de Margerie said in his interview to Financial Times that "Oil on Greenland would be a disaster. A leak would do too much damage to the image of the company” Chazan G., "Total warns against oil drilling in Arctic”, 2012. In other words, de Margerie warned against Arctic oil drilling. However, he has never been against Arctic gas exploration which can be justified by "Total" participation in Stockman gas project (in 2013 the project was announced to be "hold over for future generations" at least till 2025 and in 2015 "Total" transferred to "Gazprom" its 25% share in the project.). In 2014 "Total" was the first to buy the Arctic oil from "Gazprom" exploration at "Prirazlomnaya" platform. According to Greenpeace International expert Ben Ayliffe, this deal can be considered as "Total" hypocrisy demonstration on Arctic oil issue, because all the risks were covered by "Gazprom" in this case. Some ecologists consider that aside from ecological and reputation risks in this decision the company has taken into account financial and economical risks. In 1998 "Total" was fined 375 000 euro for a 400 kilometers oil spill in La Rochelle. According to Sustainable growth report of the company, every year "Total" is accountable for 1800-5800 cubic meters of oil spills. In other words, oil spill in the Arctic could lead to fines that would be financially detrimental for the company.

"Total" is also often accused in double standards in the climate change issue. Published in 2015 "Big Oil and the obstruction of climate regulations" report by independent non-profit organization "Influence Map" revealed how the official corporate policies and views on climate change differ from the statements by executives of the companies. For instance, in 2013 the company's official website stated the need for a balanced, progressive international agreement that prevents the distortion of competition between industries or regions of the world”. However, in 2015, "Total" Senior Executive John Bannermanof who is the American Petroleum Institute (API) board member declared the opposite assertion naming the upcoming Paris climate change summit "narrow political ideology” which prevents the USA from becoming a "global energy leader”.

These contradictions can be found in the company's position on emissions trading schemes, on carbon prices and many other issues. Such inconsistent approach induces the critics from the ecological activists. For instance, during the Paris climate conference in 2015 112 activists organized a protest action in front of "Total" headquarters. They accused the company in crimes against humanity due to greenhouse gases the company produces.

At the protest the activists highlighted in particular a number of practices of Total in destroying the climate:

· The devastating practice of gas flaring in Nigeria;

· The exploitation of the oil sands in Alberta (Canada) and Venezuela;

· The pursuit of shale gas and oil projects in Patagonia (Argentina), Gainsborough Trough (East Midlands of Great Britain) and Timimoun (in Algeria);

· The deepwater drilling project Yamal in the Arctic, Pleiad Vega (Argentina) and Uruguay for gas.

Furthermore, according to the recent report by Heede (2014)"Total" was identified as number 13 in the top twenty investor and state-owned entities responsible for CO2 emissions. The cumulative quantity of carbon pollution by "Total" by 2010 achieved 11,911 million metric tons of carbon dioxide equivalent. This amounts to 0.82% of total global cumulative emissions, which is even more than many countries have emitted (see p.56, Appendix, Graph 3) On the other hand, the company is gradually decreases this share. From 2008 to 2014 the direct greenhouse gas was reduced by 14 millions of metric tons of carbon dioxide equivalent. This result is ahead of schedule of the company's target to reduce its emissions by 15% between 2008 and 2015.

In 2015 "Total" also won a Pinocchio Award - special prize which highlights, and denounces the negative impacts of multinational companies on the environment - in "Lobbying” nomination. The organizers of the award criticized "Total" for "overgreening” the role of gas as a climate change solution. "What Total advocates to be the "vital role of gas" means in fact locking Europe into 50 more years of fossil fuel consumption, and securing Total's profits" - they claimed. They stated that gas extraction mean negative environmental impacts and the company's proud for 50% gas energy production in 2014 is unfounded and is not connected with positive effects for the environment. They prove that gas can be as destructive as oil leading to ground-water contamination, serious health impacts, seismic instability, methane leakages, and significantly higher carbon emissions overall than other fossil fuels, including coal.

"Total”, on the contrary, sees the natural gas a part of the solution between transition to renewables and its commitments to provide energy and electricity. Patrick Pouyannй, the CEO of "Total" declared during the Paris conference: "Sometimes in all these discussions you have the impression that all fossil fuels are the bad guys. But the bad guys are part of the solution. Whatever people think, we still need fossil fuels. We need to make advocacy for gas. We need to explain to our policy makers that gas has to be encouraged. ”

Thus, it is hard to presume whether "Total" will really become a part of the solution for climate change. Only the volumes of financial investments to renewables, transparent GHG emissions policies and refusal from polluting and dangerous projects may demonstrate the serious strategic intention of the company to mitigate climate change and become really "committed to better energy”. Though, current company's activity in climate change mitigation issue is more similar to reactions to risks and specific actions for risks minimization with simultaneous "business-as-usual" strategy.

2.2 "Engie" (ex-"GDF Suez”) case study

"GDF Suez” is a multinational company, operating in areas of electricity generation and distribution, natural gas and renewable energy. The company was rebranded in 2015 getting its new name "Engie”. It was formed in 2008 as a result of a merger between "Gaz de France” and "Suez”. The former was founded in 1946 by the French Government, which held about 80% stake in the company until 2008, and was mainly engaged in production, transportation and selling natural gas. After the merger the French State became a holder of 35,7% stake of "GDF Suez”. "Suez” in turn, primarily had operations in water, electricity, natural gas supply and waste management. It was one of the oldest continuously existing multinational corporations in the world, which before nearly two centuries of reorganization and corporate mergers was involved in building the Suez Canal in the1860s.