Royal Dutch Shell PLC announced March 14 it has set short-term carbon emissions reduction targets for the first time ever.
In its 2018 annual report, the Anglo-Dutch major outlined a three-year carbon emissions reduction target of 2% to 3% through 2021, from 2016 levels. The reductions in emissions, known as Scope 3, will occur directly from Shell's operations and energy products.
"Our direct [greenhouse gas] emissions decreased from 73 million tonnes of CO2 equivalent in 2017 to 71 million tonnes of CO2 equivalent in 2018. The main contributors to this decrease were divestments, for example in Argentina, Canada, Gabon, Iraq, Malaysia and the UK," the report said.
In a bid to generate cash flow and to help pay for its more than $50-billion deal to buy BG Group PLC that was originally announced in 2015, Shell just recently wrapped up an aggressive two-year plan that started in 2016 to sell $30 billion in noncore assets through 2018.
In late 2017, Shell announced it would reduce the carbon footprint of the energy products it sells by 50% by 2050 but did not disclose any binding targets. Following a wave of investor activism clamoring for the super-majors to pass resolutions to outline and publish targets aligned with the goals of the Paris Agreement on climate change, Shell softened its stance and indicated at the end of 2018 it planned to set, annually, three- to five-year targets through 2050, with these levels to be tied to executive pay.
"Shell takes another step toward Paris. However, this will not get us to Paris," Mark van Baal, founder of Netherlands-based activist group Follow This, said in a statement.
Shell's emissions targets will be linked to the salaries of about 150 of its executives this year and that will be expanded to include 16,000 employees in 2020. With a bonus and incentive plan for delivering on company targets, including the two-year divestment program, the annual report shows Shell CEO Ben van Beurden's yearly pay package more than doubled in 2018 to more than $23 million.