Anglo-Dutch energy giant Royal Dutch Shell plc (Shell) has announced a commitment to become a net-zero emissions energy business by 2050 or sooner.
The revision to the company’s climate action plan follows engagement with investors as part of Climate Action 100+, led by the Church of England Pension Board and Robeco, which lobbies oil and other fossil fuel majors to take climate-change reforms and transition to decarbonised, sustainable operations.
Plans include an ambition to achieve net zero emissions by 2050 “at the latest” from what the company terms scope 1 and 2 emissions, those resulting from company operations and energy consumption, which amounted to the equivalent of 70 million tonnes of CO2 in 2019.
Scope 3 emissions however, those generated from the burning of oil, and the company’s supply chain, make up the majority of Shell’s harmful emissions.
In terms of product focus though, Shell plans to accelerate its Net Carbon Footprint ambition in step with the Paris Agreement goal to limit the average temperature rise to 1.5 degrees Celsius, reducing the carbon footprint of energy products by approximately 65% by 2050, and by around 30% by 2035.
The company also announced intentions to pivot towards serving businesses and sectors that share similar goals.
Stephanie Pfeifer, Member of the global Climate Action 100+ Steering Committee and CEO of the Institutional Investors Group on Climate Change, said: “It’s imperative we see companies across the entire oil and gas sector put strategies in place to achieve net zero emission if we are to tackle climate change. This applies to the fuels and products companies sell, as well as emissions from operations.
“Investors will now look to other energy companies to match, and build on, the welcome ambition Shell is showing. Engagement with Shell will also continue as investors support the company in taking the steps needed to align its business with the goals of the Paris Agreement.”
“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.”
Richard George, head of Greenpeace UK’s climate campaign, told the Guardian, “A credible net-zero plan from Shell would start with a commitment to stop drilling for new oil and gas.
“Instead, investors are being fobbed off with vague aspirations that don’t tackle Shell’s monstrous carbon footprint and pass the buck to Shell’s customers to offset their emissions,” he said.
Teresa Anderson, climate policy coordinator at ActionAid International, told Barron.com there were concerns over the lack of detail in Shell’s climate plan.
“Shell plans to continue extracting and selling their oil and gas,” she said. “But they hope to keep their social license by trying to suck carbon from the air through vast tree plantations and storing emissions underground.”
“The fact that the technology they are relying on does not yet work at scale, and that massive land grabs would be needed to fulfil their tree planting ambitions, should raise huge red flags.”