Shell’s shareholders to advise on energy transition strategy
Energy giant Shell has asked its shareholders to cast a vote on its latest Energy Transition Strategy publication.
Back in April 2020, Shell revealed its plans to become a net-zero emissions energy business by 2050 at the latest. As of February 2021, the company has begun integrating its strategy, portfolio, environmental and social ambitions under the goals of Powering Progress: generating shareholder value, achieving net-zero emissions, powering lives, and respecting nature.
Shell sets out these targets in the new publication, aligned with the goal of the Paris Agreement on climate change.
The publication also describes the company’s short and medium-term climate targets, customer-focused decarbonisation strategy, capital allocation and approach to climate-related policy and advocacy.
Since most of Shell’s emissions come from the use of its fuels and the other energy products it sell, the company wanted to place their customers at the centre of the energy transition strategy. Shell decares it will work with its customers to change and grow demand for low-carbon energy products and services, sector by sector.
The publication will be submitted to a shareholder advisory vote at the Annual General Meeting of Royal Dutch Shell to be held on 18 May 2021.
Seeking an advisory vote is a part of Shell’s Powering Progress strategy, which wants to accelerate the transition of the company’s business to net-zero emissions. It follows continuing engagement with shareholders, including with Climate Action 100+ which represents investors with assets of around $54 trillion.
Shell’s reshaped organisation will deliver on the climate goals through the three business pillars of Growth, Transition, and Upstream.
The vote will not be binding, as it is purely advisory.
Shell’s board and executive committee will remain responsible and accountable for setting and approving the energy transition strategy.
Shell’s Energy Transition Strategy publication will be updated every three years until 2050. Starting in 2022, every year it will also seek an advisory vote on its progress.
Among the targets set this year, Shell places increasing the weighting of the energy transition performance metric in the Long-term Incentive Plan (LTIP) from 10 per cent to 20 per cent. It also introduced an absolute greenhouse gas (GHG) abatement target to the annual bonus scorecard, and the total weighting of measures connected to GHG emissions is increasing from 10 per cent to 15 per cent.
Royal Dutch Shell CEO, Ben van Beurden, said in the introduction to the publication: “As we transform our business, it is more important than ever for shareholders to understand and support our approach…We are asking our shareholders to vote for an energy transition strategy that is designed to bring our energy products, our services, and our investments in line with the goal of the Paris Agreement and the global drive to combat climate change.”
To remind, Shells’s short-term targets to reduce net carbon intensity as it makes progress towards its 2050 target, include: 6-8 per cent by 2023, 20 per cent by 2030, 45 per cent by 2035 and 100 per cent by 2050, using a baseline of 2016.