By Ron Bousso and Shadia Nasralla
Shell has ruled out setting targets to cut emissions in absolute terms from customers’ use of its products, the company’s chair said in a report published on Thursday, saying it was against shareholder interests and would not be effective.
End-user emissions, referred to as 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 in absolute terms.
“The Board has considered setting a Scope 3 absolute emissions target but has found it would be against the financial interests of our shareholders and would not help to mitigate global warming,” Shell Chairman Andrew Mackenzie said in the report.
Shareholders will vote on May 23 on a resolution filed by activist group Follow This, asking Shell to set 2030 emissions reduction goals in line with the 2015 Paris U.N. accord on climate change.
Shell’s board has yet to issue a recommendation but in the past has recommended investors oppose similar resolutions.
Shell aims to cut planet-warming gases from across its portfolio based on emissions intensity by 20% by 2030 and, eventually, 100% by 2050. It aims to halve emissions from its own operations on an absolute basis by 2030 from a 2016 base.
Measuring emissions by intensity means a company can technically increase its fossil fuel output and overall emissions while using offsets or adding renewable energy or biofuels to its product mix.
A Dutch court in 2021 ordered Shell to reduce its emissions by 45% by 2030, a verdict it has appealed.
Scientists say the world needs to cut greenhouse gas emissions by 43% by 2030, compared to 2019 levels, to have any hope of limiting global warming to 1.5 Celsius (2.7 Fahrenheit), the level scientists say can prevent the most severe consequences.