Oakland, California—Dec. 3, 2018—Shell took an important step today to act on the dire problem of climate change, announcing that it will begin implementing its long-term emissions reduction “ambition” by adopting a commitment to set three- to five-year, near-term Net Carbon Footprint targets.
Shell will set the target each year, for the following three- or five-year period. The target setting process will start in 2020 and will run to 2050. Shell is further proposing to link these targets to its executive remuneration policy, which will be voted on by shareholders for approval at the company’s annual general meeting in 2020. Shell will also publish its progress towards lowering the Net Carbon Footprint of its energy products.
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As You Sow fully supports this important step. Danielle Fugere, president of As You Sow, had this to say about today’s announcement:
“We are pleased that Shell is setting in motion a plan to implement its announced targets in the near term, when it matters most, particularly those important Scope 3 emission targets related to the carbon intensity of its product mix. Shell demonstrates that oil and gas companies can and must reduce their carbon emissions, including the carbon intensity of their products. Those companies who are not acting on Scope 3 emissions, which far outweigh operational emissions, continue to add to the potential for catastrophic climate change.”
While Shell’s announced short-term intensity targets are a significant step, shareholders continue to seek absolute emissions reduction targets from Shell. The company’s current carbon intensity targets do not prevent Shell from expanding its total greenhouse gas emissions through growth.
“There is little hope of reaching the global Net Zero goals recently set out by the Intergovernmental Panel on Climate Change without oil and gas companies committing to reduce their total emissions,” Fugere concluded.
As governments work to combat climate change, the risk to high carbon companies also grows. Whether companies are proactive or reactive on climate change and its impacts will affect shareholder value. Energy companies in particular face important choices. Those that choose to continue investing in use of and exploration for more fossil fuel reserves increase their risk of stranded reserves and infrastructure, known as Carbon Asset Risk. Others may instead choose to diversify, reducing their focus on fossil fuels and deploying and expanding energy efficiency and renewable energy sources.
As You Sow works to address the challenges and risks of climate change by working with shareholders and fossil fuel companies to facilitate a transition from investment in high carbon fossil fuels to clean and renewable sources of energy. As You Sow recently released “2020: A Clear Vision for Paris Compliant Shareholder Engagement,” which analyzes historical shareholder success, and lays out a clear plan for shareholders, in moving oil and gas companies to transition to well below 2 degree, Paris compliant business models. As You Sow filed the first shareholder proposal asking a company to address carbon asset risk in 2013 and obtained the first climate asset risk report from Exxon in 2014.
To learn more about As You Sow’s work on climate change, click here.