Royal Dutch Shell plc (Shell) will today update investors on plans to become a net-zero emissions energy business by 2050 or sooner (covering scope one, two and three emissions). The detailed steps, to be outlined at Shell’s Responsible Investment Annual Briefing today, will include:

• An ambition to be net zero on all the emissions from the manufacture of all our products (scope one and two) by 2050 at the latest;
• Accelerating Shell’s Net Carbon Footprint ambition to be in step with society’s aim to limit the average temperature rise to 1.5 degrees Celsius in line with the goals of the Paris Agreement on Climate Change. This means reducing the Net Carbon Footprint of the energy products Shell sells to its customers by around 65% by 2050 (increased from around 50%), and by around 30% by 2035 (increased from around 20%);
• A pivot towards serving businesses and sectors that by 2050 are also net-zero emissions.

“With the COVID-19 pandemic having a serious impact on people’s health and our economies, these are extraordinary times. Yet even at this time of immediate challenge, we must also maintain the focus on the long term,” said Ben van Beurden, Chief Executive Officer of Royal Dutch Shell.

“Society’s expectations have shifted quickly in the debate around climate change. Shell now needs to go further with our own ambitions, which is why we aim to be a net-zero emissions energy business by 2050 or sooner. Society, and our customers, expect nothing less.”

“This announcement significantly increases Shell’s ambitions and commitments,” said Adam Matthews, Director of Ethics and Engagement of the Church of England Pensions Board, Board Member of the Institutional Investors Group on Climate Change, and Co-lead as part of the Climate Action 100+ dialogue with Shell. “It is indicative of Shell’s confidence in not only navigating the immediate situation but rightly sets the focus on developing net-zero pathways in key sectors that shape the demand for energy. Ultimately, it will be by developing and supporting net-zero pathways in these sectors that we will achieve the goals of the Paris Agreement.”

Peter Ferket, Chief Investment Officer of Robeco, Co-lead as part of the Climate Action 100+ dialogue with Shell, said: “These new ambitions build on the 2018 joint statement between Shell and Climate Action 100+. It proves that the strong and committed engagement of institutional investors with Shell can help accelerate the pace of change to deliver the goals of the Paris Agreement. It raises the bar and sets out an approach for others in the oil and gas sector to follow.”

Background

• In 2017, Shell was the first international oil and gas company to set the ambition to reduce the Net Carbon Footprint of the energy products it sells, expressed as a measure of carbon intensity, taking into account their full life-cycle emissions. Shell aimed to reduce the Net Carbon Footprint of its energy products by around half by 2050, and by around 20% by 2035, in step with society’s drive to meet the goals of the Paris Agreement. In 2018, with unprecedented levels of collaboration with investors, Shell announced its intention to build on that long-term ambition with the commitment to setting specific Net Carbon Footprint targets for shorter periods, of three or five years, linking them to executive remuneration.
• In early 2019 Shell set an unconditional three-year target (to 2021) to reduce its Net Carbon Footprint by 2% to 3% compared to 2016, linked to senior executive remuneration. For the 2020 unconditional three-year target (to 2022) the target range is a 3-4% reduction in its Net Carbon Footprint against the 2016 baseline, linked to remuneration for more than 16,500 staff. It is intended that this target setting will be done annually, with each year’s target covering a three-year period.
• Shell will track and report on progress in achieving both the aim to reduce the Net Carbon Footprint of the energy products it supplies, as well as progress towards achieving net-zero emissions from its operations. Shell will also work to develop a method for tracking and reporting emission reduction by its customers. Tracking and reporting the reduction of customer emissions will require the development of appropriate accounting methodologies and frameworks.
• As of today, Shell’s operating plans and budgets do not reflect these newly announced ambitions. Shell’s aim is that, in the future, its operating plans and budgets will change to reflect this movement towards its new net-zero emissions ambition. These plans and budgets need to be in step with the movement towards a net-zero emissions economy within society and among Shell’s customers.

KeyFacts Energy: Shell Netherlands country profile