Shell Ties New Climate Targets to Exec Pay

Royal Dutch Shell plc is introducing short-term carbon emission targets that will be directly tied to executive pay, the company announced Monday.

The new Net Carbon Footprint targets will be set for periods of three to five years and will begin in 2020 and run to 2050 – by when Shell hopes to reduce its carbon emissions by half. The company is aiming for 20 percent reduction by 2035.

Shell said it plans to link the new targets to executives’ remuneration (pay) policy, which will be subject to a shareholder vote at the 2020 Annual General Meeting.

The company said the announcement is part of a drive to increase transparency around the topic of climate change, and to create clear benchmarks for performance.

“Meeting the challenge of tackling climate change requires unprecedented collaboration and this is demonstrated by our engagements with investors,” Shell CEO Ben van Beurden said in a company statement. “We are taking important steps towards turning our Net Carbon Footprint ambition into reality by setting shorter-term targets. This ambition positions the company well for the future and seeks to ensure we thrive as the world works to meet the goals of the Paris Agreement on climate change.”

Shell’s decision to adopt new climate targets comes just months after the company’s CEO said it would rather stick to broader ambitions than set specific climate targets. Van Beurden said this in light of the threat of additional legal action after Shell and other Big Oil companies were slapped with lawsuits by U.S. states and municipalities around climate change, Bloomberg reported.