Shell agrees to set short-term caps on carbon emissions
The decision was announced after pressure from institutional investors.
Energy giant Royal Dutch Shell has agreed to set short-term goals for reducing carbon emissions that will be linked to executive pay.
The decision was announced after pressure from institutional investors, who said urgency was needed to fight climate change and protect the value of their holdings.
Shell says it will set the targets for rolling three or five-year periods beginning in 2020.
The move supplements Shell’s long-term goals, which call for the company to reduce its carbon footprint by 20% by 2035 and 50% by 2050.
CEO Ben van Beurden says the targets were the result of “unprecedented collaboration” with investors and will help to ensure the company thrives as countries around the world cut emissions to comply with the 2015 Paris Agreement on climate change.
He said: “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.”
Mr Van Beurden has long said Shell, which has its headquarters in the Netherlands, was planning for the day when demand for oil starts fades and major economies embraces alternative energy sources such as electricity, wind and nuclear power.
Investors, including the Church of England, said short-term goals were needed to accelerate progress.
Under the 2015 Paris agreement, governments around the world pledged to prevent global temperatures from rising by more than 1.5 degrees Celsius above pre-industrial levels.
Negotiators from nearly 200 nations are meeting in Katowice, Poland, this week and next to work out exactly how they are going to achieve that goal.
“As governments meet at the United Nations climate negotiations in Poland, I am delighted to see a unique announcement on climate change between investors and one of the largest companies in the world – Royal Dutch Shell,” Archbishop of Canterbury Justin Welby said.
“This sets Shell on a path to reducing the net carbon footprint of its energy products.”