LONDON – Shell has ruled out setting a target to cut emissions outright from customers’ use of its products, its chair said in a report published on Thursday as the energy company responds to growing activist and investor pressure on the climate. confronts.
End-user emissions, called Scope 3, account for around 95% of the energy company’s greenhouse gas pollution and some investors have urged Shell to introduce medium-term targets to reduce them outright. .
“The board considered setting a Scope 3 absolute emissions target, but found that this would be against the financial interests of our shareholders and would not help reduce global warming,” Shell chairman Andrew MacKenzie said in the report.
Shell said such Scope 3 targets would force it to reduce sales of oil products and natural gas, “effectively handing customers over to competitors”.
Shell’s new chief executive, Val Savannah, indicated this month that the company was reviewing plans to gradually reduce oil production.
Shareholders will vote on May 23 on a resolution filed by activist group Follow This, which called for Shell to set 2030 emissions reduction targets in line with the 2015 Paris UN accord on climate change.
Shell’s board has yet to issue a recommendation, but it has previously recommended that similar proposals be opposed by investors. Last year’s resolution received 20% of the vote while Shell’s energy transition strategy received 80%.
Shell aims to cut planet-warming gases across its portfolio – depending on the emissions intensity of its fuels – by 20% by 2030 and 100% by 2050. 2030 and said that it has already reduced them by 30%.
Measuring emissions intensively means that a company can technically increase its fossil fuel production and overall emissions by using offsets or adding renewable energy or biofuels to its product mix.
In 2021 a Dutch court ordered Shell to reduce its emissions by 45% by 2030. The company has appealed against the decision.
A group of European institutional investors is also backing a London lawsuit targeting Shell’s board over alleged climate mismanagement in a case that could have far-reaching implications for how companies deal with emissions.
“We believe that our directors have performed their legal duties and acted in the best interests of the company at all times,” Shell said in its report responding to the lawsuit.
The world needs to cut greenhouse gas emissions by 43% from 2019 levels by 2030 to have any hope of limiting global warming to 1.5 Celsius (2.7 Fahrenheit), scientists say. The level can prevent the most serious consequences.