Shell links executive pay to carbon reduction

Royal Dutch Shell caved in to growing investor pressure over climate change with plans to set short-term targets for reducing its carbon footprint.

BP and Total have already set short-term targets, but Shell CEO Ben van Beurden had previously resisted setting hard goals, saying it would be “foolhardy” to expose Shell to legal challenges.

But following discussions with investors, the AngloDutch oil and gas giant said that from 2020 it will set three- to five-year targets every year which will include specific net carbon footprint targets.

Shareholder criticism

Shareholders had criticised Shell for last year setting long-term “ambitions” to halve its emissions of carbon dioxide by 2050, which lacked binding targets for implementation.

Shell, which did not specify any targets yesterday, plans to link these targets and other measures to its executive remuneration policy.

The revised remuneration policy will be put to shareholders for approval at its annual meeting in 2020.

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

The move comes as governments meet in Poland for a conference hosted by the United Nations COP24, which will lay out a “rule book” to implement a 2015 climate accord.

The Paris agreement set goals to phase out fossil fuel use this century, shift towards cleaner energies and help limit a rise in temperatures.