British oil major Shell revealed plans to set short-term targets as part of a long-term ambition to reduce the Net Carbon Footprint of its energy products. The plans were announced in a joint statement developed with institutional investors on behalf of Climate Action 100+, an initiative led by investors with more than $32 trillion in assets under management. The company plans to link these targets to executive remuneration, subject to shareholder approval.
Shell aims to reduce the Net Carbon Footprint of its energy products by around half by 2050, and by around 20% by 2035, in line with Paris Agreement. In 2017, the company became the first international oil and gas firm to set the ambition to reduce the Net Carbon Footprint of the energy products it sells. The steps it has decided to follow are:
- Public short-term Net Carbon Footprint targets
- Targets linked to remuneration
- Review of progress
- Alignment with the TCFD recommendations
- Corporate climate lobbying
Now Shell is building on that long-term ambition with the commitment to setting specific Net Carbon Footprint targets for shorter periods, of three or five years. Shell will set the target each year, for the following three- or five-year period. The target setting process will start from 2020 and will run to 2050.
As stated in the official Joint statement, Shell has three strategic ambitions:
- To provide a world-class investment case by growing free cash flow and increasing returns, all built upon a strong financial framework and resilient portfolio;
- To thrive through the energy transition by providing the mix of products its customers need as the energy system evolves; and
- To sustain its societal licence to operate by being a responsible energy company that operates with care for people and the environment.
Shell plans to link these targets and other measures to its executive remuneration policy. The revised remuneration policy will be put to shareholders for approval at the company’s Annual General Meeting in 2020.
Shell will publish its progress towards lowering the Net Carbon Footprint of its energy products initially in the Sustainability Report. In line with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), Shell intends to integrate this disclosure into the Annual Report and Form 20-F as appropriate. The company will seek third-party assurance of the reported Net Carbon Footprint.
Meeting the challenge of tackling climate change requires unprecedented collaboration and this is demonstrated by our engagements with investors. We are taking important steps towards turning our Net Carbon Footprint ambition into reality by setting shorter-term targets. This ambition positions the company well for the future and seeks to ensure we thrive as the world works to meet the goals of the Paris Agreement on climate change,
…said Shell CEO Ben van Beurden.
Find the official statement herebelow:
