Royal Dutch Shell has set its first-ever short-term goals to cut the carbon footprint of its operations and product sales as the oil and gas industry is under intense investor and shareholder pressure to address to climate change.
In its annual report published on Thursday, Shell said that in early 2019, it had decided to set a “Net Carbon Footprint target” for 2021 to lower its carbon footprint by 2-3 percent compared to the 2016 Net Carbon Footprint of 79 grams of CO2 equivalent per megajoule.
Shell’s approach to the Net Carbon Footprint targets includes not only emissions directly from Shell operations, such as extraction, transportation, and processing of raw materials, and transportation of products, but also emissions generated by third parties who supply energy to Shell for production, and Shell’s customers’ emissions from their use of the energy products that the company sells.
In December last year, in an industry first, Shell said that it plans to set short-term targets for reducing the net carbon footprint of the energy products it sells, and to link those targets with executive remuneration.
“Building public trust this year also involved strengthening our public commitment to the Paris Agreement on climate change. In our joint statement with institutional investors on behalf of Climate Action 100+, we have committed to operationalise our ambition of around 50% Net Carbon Footprint reduction by 2050, through the setting of short-term targets which will be linked to executive remuneration,” Shell said in its annual report.
“Shell are showing progress in answering the call from investors with $33 trillion in assets to make their business consistent with the goals of the Paris Agreement,” said Stephanie Pfeifer, a member of the global Climate Action 100+ steering committee and CEO at the Institutional Investors Group on Climate Change (IIGCC).
“Setting the first interim target early and linking it to executive remuneration demonstrates commitment to deliver on the agreement reached with investors as part of Climate Action 100+. We look forward to further steps from both Shell and others in the sector,” Pfeifer said.