Coming off a string of apparent strides toward recognizing the benefits of sustainability – including ratifying a shareholder resolution that commits the company to investing in a low-carbon future, earning a place on the Dow Jones Sustainability Index (DJSI) earlier this year, launching an online tool for low-carbon startups to access financing, and last month earning an A- from CDP in terms of its preparedness for a low-carbon future, and chairman Chad Holliday’s keynoting last month’s Let’s Talk Business conference on the importance of valuing natural capital – Royal Dutch Shell told Reuters last week it plans to continue its efforts to reduce its carbon footprint by linking part of its executive bonuses to greenhouse gas emissions and conducting more active screening of future investments.
This new initiative comes in response to mounting pressure from investors to adapt to an expected flattening in oil consumption within as little as five years, and international plans to phase out fossil fuels by the end of the century.
“We have to be at the forefront of the transition,” said Shell’s Chief Executive Ben van Beurden. “By the middle of the century you want to look at a portfolio that is really fit for that future.”
Van Beurden said Shell will focus on renewable energy, particularly wind and solar, as well as low-carbon biofuels and hydrogen as a key growth engine beyond 2020. The company says 10 percent of bonus payments to executives, including the CEO and chief financial officer, will be linked to “greenhouse gas management.”
How startups are paving the way to a food waste-free world
Meet even more startups innovating to rid the world of food waste at SB'20 Long Beach — June 1-4.
Ratcheting up efforts to reduce carbon emissions alongside rivals such as BP, Total and Statoil, Shell will seek shareholder approval for the three-year scheme at its next annual general meeting, likely to be held next April. Shareholders have been increasingly vocal in recent years over climate change, calling on the company to report regularly on the likes of emission management and related investment strategies.
In the near term, Shell aims to reduce the burning of excess gas from oil fields, known as flaring, and lower methane gas leaks from thousands of miles of pipelines. According to the CEO, up to 70 percent of Shell’s carbon emissions could be reduced by this drive.
Still, the new scheme is met by opposition, seen as too little to meet goals set out by last year’s Paris climate agreement to curb global warming by reaching net zero emissions in the second half of the century.
“Shell’s proposed updates fall short. The inclusion of a greenhouse gas target cannot disguise the fact this policy broadly reinforces business as usual – an unsustainable outlook that could put shareholder value at risk,” said Juliet Phillips, part of the campaign group, ShareAction. “Reducing operational emissions plays a very limited role in ensuring portfolio resilience under low-carbon, low-demand scenarios. It also does not address the risk of stranded assets.”