Royal Dutch Shell plans to set short-term emission reduction targets and link these targets with executive pay, the oil major said on Monday, yielding to growing investor pressure about establishing short-term emission goals.
Shell, which didn't specify targets today, plans to set the emission target each year for the following three- or five-year period, beginning in 2020 and subject to shareholder approval.
Shell intends to link these targets and other measures to its executive remuneration policy, which will be put to shareholder vote in the Annual General Meeting in 2020.
"The announcement is part of a drive to increase transparency around the topic of climate change, and to create clear benchmarks for performance," said Shell, which has so far resisted investor calls to start setting short-term emission targets.
Earlier this year, Shell recommended that shareholders vote against a proposal to set and publish targets that are aligned with the goal of the Paris Climate Agreement to limit global warming-and the proposal was voted down at the 2018 annual meeting.
Now Shell and a group of institutional investors on behalf of Climate Action 100+, an initiative led by investors with more than US$32 trillion in assets under management, jointly announced the initiative.
Speaking as the Co-lead of the Climate Action 100+ dialogue with Shell, Adam Matthews, Director of Ethics and Engagement of the Church of England Pensions Board, and Board Member of the Institutional Investors Group on Climate Change, said: "Investors like ourselves will be able to track Shell's performance through the Transition Pathway Initiative (TPI), an independent academic tool at the London School of Economics which is supported by funds with $11 trillion in assets."
"As long-term responsible investors and shareholders in Shell, we will stay in discussion with the company and follow the progress with interest. We hope that other companies will follow Shell," said Corien Wortmann, Chair of pension fund ABP.
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