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Shell oil to link executive bonuses to greenhouse goals in effort to reduce carbon footprint Shell oil to link executive bonuses to greenhouse goals in effort to reduce carbon footprint
(about 3 hours later)
Shell, the world’s second-biggest oil company, has confirmed that the size of bonus payments to executives would be linked to greenhouse gas emissions in order to step up the efforts to reduce the energy group’s carbon footprint. Shell, the world’s second-biggest oil company, has confirmed plans to link the size of executive bonuses to greenhouse gas emissions in order to further efforts to reduce the energy group’s carbon footprint.
The move comes in response to mounting pressure from investors urging the company to adapt to an expected flattening in oil consumption within as little as five years.The move comes in response to mounting pressure from investors urging the company to adapt to an expected flattening in oil consumption within as little as five years.
Shell said 10 per cent of bonus payments including the chief executive and the chief financial officer would be linked to "greenhouse gas management", though it was unclear what targets would be set. Shell said 10 per cent of bonus payments including for the chief executive and the chief financial officer would be linked to “greenhouse gas management”, though it was unclear what targets would be set.
Ben van Burden, the chief executive of Shell, whose total direct remuneration was £5.1 million pounds last year, including a 3.5 million pound bonus said the the company will also conduct more active screening of future investment in reaction to international plans to phase out fossil fuels by the end of the century to combat global warming. Ben van Burden, the chief executive of Shell, whose total remuneration was £5.1m last year, including a £3.5m bonus said the the company will also conduct more active screening of future investment in reaction to international plans to phase out fossil fuels by the end of the century to combat global warming.
He said: "We have to be at the forefront of the transition; by the middle of the century you want to look at a portfolio that is really fit for the future." He said: “We have to be at the forefront of the transition; by the middle of the century you want to look at a portfolio that is really fit for the future.”
“In the past we didn't do this. The only thing we did was put a shadow price for carbon in them ... now we have to take it one step further.” “We have linked executive remuneration in the past to energy intensity, and next year we’re going to make it even more specific to the CO2 footprint metrics associated with these energy efficiencies,” he added.
"We have linked executive remuneration in the past to energy intensity, and next year we're going to make it even more specific to the CO2 footprint metrics associated with these energy efficiencies," he added.
Shell, which has been ratcheting up efforts to reduce carbon emissions alongside rivals such as BP, Total and Statoil, will seek shareholder approval for the three-year scheme at its next annual general meeting, likely to be held next April.Shell, which has been ratcheting up efforts to reduce carbon emissions alongside rivals such as BP, Total and Statoil, will seek shareholder approval for the three-year scheme at its next annual general meeting, likely to be held next April.
Shareholders have been increasingly vocal in recent years over climate change, calling on the company to report regularly on the likes of emission management and related investment strategies. Shareholders have been increasingly vocal in recent years over climate change, calling on the company to report regularly on emissions management and related investment strategies.
Additional reporting by ReutersAdditional reporting by Reuters