Anglo-Dutch Shell Sets Green Goal
Anglo-Dutch major Shell has set itself a 2050 deadline for becoming net zero on the manufacture of all its products, it said April 16.
It also plans to reduce the net carbon footprint of the energy products it sells to its customers by around 65% by 2050, and by around 30% by 2035. These mark an increase of around 15 and 10 percentage points respectively. It is also planning to pivot towards serving businesses and sectors that by 2050 are also net-zero emissions.
Acknowledging the crisis of Covid-19, CEO Ben van Beurden said that “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.”
Like many other major oil and gas producers, the company has been shaken by social and financial pressures that have rapidly mounted as investors and banks have found other forms of energy more attractive. Shell has been working with environmental pressure groups such as Climate Change 100+ as it seeks to tread the thin line between maximising profits from its robust conventional oil and gas supply; keeping the world's economies going; paying shareholders; and investing in green energy.
“This announcement significantly increases Shell’s ambitions and commitments," said the Church of England pensions board, adding that it "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.”
Robeco, part of the Climate Action 100+ dialogue with Shell, said the new ambitions show 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.”
Consultancy Wood Mackenzie said: “This is an evolution of the net carbon footprint ambition that Shell unveiled in November 2017.... The ambition is based on net carbon intensity rather than absolute emissions, and covers Scope 3 emissions associated with the energy products that Shell sells, rather than all products. It has also made a new commitment to become net zero on an absolute basis on the Scope 1 and 2 emissions associated with all products that it manufactures.
“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.”
BP announced its own net-zero plans February 12, which entail a major corporate restructuring. However the details will not become known until the end of the summer.
