Royal Dutch Shell has signed a US$10-billion revolving credit facility, and the interest and fees paid on it will be linked to the company’s targets to reduce its carbon footprint, in a first for Shell, the oil and gas supermajor said on Friday.
The new financing replaces the current US$8.84 billion revolving credit facility and is provided by a syndicate of 25 banks.
“This is an innovative deal which also demonstrates Shell’s broad-based commitment to reducing the Net Carbon Footprint of the energy products we sell. We appreciate the strong support and commitment from our relationship banks,” Russell O’Brien, Group Treasurer at Shell, said in a statement.
In recent years, Big Oil has faced increased investor pressure to start addressing climate change risks and set emission reduction targets if the world is ever to achieve the Paris Agreement targets. In this regard, Shell has recently made some pledges for emissions reductions.
The supermajor aims to cut the net carbon footprint of the energy products it sells by 50 percent by 2050 and by 20 percent by 2035.
In March this year, Shell 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 climate change. Shell set a Net Carbon Footprint target for 2021 to lower its carbon footprint by 2-3 percent compared to 2016 levels. Related: The Fastest Growing Energy Sectors Of 2019
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.
The world needs to get to the point at which it will no longer add to the stock of greenhouse gases, and reducing emissions to net zero “is the only way to go,” Shell’s chief executive Ben van Beurden said this summer, calling on businesses to work together to move faster in addressing climate change.
However, Shell’s core business is and will continue to be oil and gas for the foreseeable future, van Beurden said last year.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More