Shell commits to stricter targets on cutting emissions

SHELL has given in to pressure from investors to commit to specific goals in limiting climate change.

It has announced that it will set specific three to five-year net carbon targets every year from 2020 as part of its long-term plan to cut emissions by 20% by 2035 and 50% by 2050. As part of this, it plans to link targets with its executive remuneration policy, which could affect the top 1,200 employees in the company. The policy will need to be approved by shareholders at its annual meeting in 2020.

In 2017, Shell had announced that it would cut its emissions by 50% by 2050, but investors criticised its long-term plan saying that it lacked any binding targets. While short-term targets had already been set by BP and Total, Shell had resisted doing the same. Shell defeated a motion by investors at its annual meeting in May this year, which aimed to bring the company's emissions in line with the Paris Agreement. At a company event in July, Shell CEO Ben van Beurden, said that it would be "foolhardy" to expose Shell to legal challenges should it fail to meet reductions targets.

The new targets will incorporate emissions from fuel burning by customers and will see Shell increase the share of gas in its production mix from 50% to 75%.

The move was backed by Climate Action 100+, a group of investors with more than US$32trn of assets under management.

“We are taking important steps towards turning our Net Carbon Footprint ambition into reality by setting shorter-term targets," said van Beurden. “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.”

Shell will publish data on its net carbon footprint in its 2019 sustainability report.