Royal Dutch Shell announced plans to become a net-zero emissions energy business by 2050 or sooner.
In an update to investors Shell said that that it will be taking a number of steps to reach these ambitious goals and outlined them during its Responsible Investment Annual Briefing.
It has set an ambition to be net zero on all the emissions from the manufacture of all its products (scope one and two) by 2050 at the latest. The company will also accelerate its 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 per cent by 2050 (increased from around 50 per cent), and by around 30 per cent by 2035 (increased from around 20 per cent). Finally, Shell said it would 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. 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,” said Ben van Beurden, chief executive officer of Royal Dutch Shell.
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.”
Luke Parker, vice president, corporate analysis, at Wood Mackenzie, said: “This is an evolution of the net carbon footprint ambition that Shell unveiled in November 2017. It has effectively accelerated its ambition to reduce the net carbon footprint of the energy products it sells (Scope 1, 2 and 3) by 65 per cent by 2050, instead of 50 per cent."
Parker added:“The fact that Shell announced the move now underlines its commitment to make the shift from Big Oil to Big Energy. Coronavirus and its fall-out doesn’t change that … if anything, it adds greater weight to the argument. Despite immediate cash flow constraints, Shell (and its peers) will emerge from this period more determined to make the shift.”