Oil and gas major Shell has announced plans for carbon emissions targets linked to remuneration.
Shell’s announcement was made at the start of the COP24 climate talks in Katowice, Poland. It reinforces plans outlined in 2017, when the business stated its ambition to cut the “net carbon footprint” of energy products it sells.
In a joint statement on Monday with a leadership group of institutional investors on behalf of Climate Action 100+, the Anglo-Dutch business said it aimed to cut its net carbon footprint by around 50 percent by 2050. As an “interim step,” the firm said it would aim to reduce its net carbon footprint by around 20 percent by 2035.
It will also set specific net carbon footprint goals for short term periods of three or five years. Targets will be set every year.
The business added that it would, as part of a revised remuneration policy, “incorporate a link between energy transition and long-term remuneration.” This will be subject to a shareholder vote at its 2020 Annual General Meeting.
“Meeting the challenge of tackling climate change requires unprecedented collaboration and this is demonstrated by our engagements with investors,” Shell CEO Ben van Beurden said in a statement. “We are taking important steps towards turning our net carbon footprint ambition into reality by setting shorter-term targets.”
Climate Action 100+ is a five-year global initiative, led by investors, with over $32 trillion in assets under management.
Its goal is to engage “systemically important greenhouse gas emitters” and other businesses that have opportunities to “drive the clean energy transition and help achieve the goals of the Paris Agreement.”
Under the terms of the Paris Agreement, which was reached at the end of 2015, world leaders have committed to making sure global warming stays “well below” 2 degrees Celsius above pre-industrial levels. They have also agreed to pursue efforts to limit the temperature rise to 1.5 degrees Celsius.
Investor engagement with Shell was led by Robeco and the Church of England Pensions Board.?
“This joint statement is the first of its kind, sets a benchmark for the rest of the oil and gas sector and shows the benefit of engagement ? aligning institutional investors’ long-term interests with Shell’s desire to be at the forefront of the energy transition,” Adam Matthews, director of ethics and engagement at the Church of England Pensions Board, said.