Royal Dutch Shell is committing to net-zero emissions by 2050 or sooner, the company told investors Thursday.
At its annual responsible investment briefing, Shell said it aims to be net zero on all emissions from the manufacture of all its products by 2050 at the latest. It will also target emissions from operations and those associated with its energy supply.
To be in line with the goals of the Paris Agreement on climate change, Shell will need to reduce the net carbon emissions in consumer products by 30% by 2035 and 65% by 2050. The company noted that in 2017, it was the first international oil and gas company to set net carbon footprint goals, which at the time were 20% by 2035 and 50% by 2050.
The bulk of the emissions reductions will come from consumers, known as scope three emissions, and Shell said that will involve working with broad coalitions of businesses, governments and other parties, sector by sector, to create those pathways.
CEO Ben van Beurden said that even with the challenge of the COVID-19 pandemic, it was important to 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," Mr. van Beurden said in a statement.
The Church of England Pensions Board and Robeco led the Climate Action 100 Plus dialogue with Shell on the commitment. "It is indicative of Shell's confidence in not only navigating the immediate situation but 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," said Church of England Pensions Board director of ethics and engagement Adam Matthews, who is a board member of the Institutional Investors Group on Climate Change.
Andrew Logan, senior director of oil and gas at sustainability non-profit Ceres said that Shell's decision was encouraging as many U.S. oil companies use the COVID-19 crisis to push for environmental rollbacks.
"Considering that Shell had just last year questioned the feasibility of achieving the 1.5 degree goal envisioned by the Paris Agreement, the company's new aim to align its business with a 1.5 degree trajectory by 2050 or sooner is a sign of just how quickly the bar is being raised by Climate Action 100 Plus investor signatories in this high-emitting sector," Mr. Logan said.
More than 450 investors with a collective $40 trillion in assets participate in Climate Action 100 Plus.