Royal Dutch Shell will set carbon emissions targets next year and link these to executive pay, reversing its chief executive’s opposition and following intense pressure from shareholders who want fossil fuel companies to take greater responsibility for their contribution to global warming. Investors such as the Church of England and Robeco have pushed Shell to make firm commitments to cut its carbon footprint, saying last year’s announcement of a long-term “ambition” to halve carbon emissions by 2050 did not go far enough.
By setting targets “we will be systematically driving down our carbon footprint over time”, chief executive Ben van Beurden told the Financial Times on Sunday. “We all know the benefits of energy but there are associated effects that we have to manage.” Shell also said it will link energy transition targets to the long-term incentive plans of senior executives, subject to a shareholder vote in 2020.
Shell said it was still in talks with investors about the percentage to be targeted but the remuneration of 1,200 top employees could be affected. “It is a massive step change,” said Adam Matthews, director of ethics and engagement for the Church of England Pensions Board. “This presents a model for how [companies] can proceed.”