Shell's investors push for more detail on how bonuses will be tied to lowering carbon emissions ahead of AGM

Courtney Goldsmith
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Shell shareholders will vote on the new policy at the company's AGM next week (Source: Getty)

Investors are urging Royal Dutch Shell to explain its plan to link executives' bonuses to how well the oil major manages greenhouse gas emissions in more detail.

The new policy to tie 10 per cent of executives bonuses to lowering carbon emissions will be voted on at the company's annual general meeting (AGM) next Tuesday, 23 May.

Some investors are not satisfied with Shell's broad plans and are pushing the oil major to detail exactly how it will calculate the targets for lowering emissions in the new bonus scheme.

Shell said in March the new metrics will be calculated according to its management of carbon dioxide emissions from its refining, chemical and upstream assets.

"This is a good move by the company but we would like to see more," Bruce Duguid, director in the stewardship team at Shell shareholder Hermes Investment Management, told Reuters.

"We would prefer to see public, pre-set greenhouse gas reduction targets using a methodology appropriate to the type of an emission," Duguid said.

"It could be an intensity target rather than an absolute emissions number but ideally set over a long period of time that is part of a long-term efficiency and carbon reduction plan," Duguid said.

The shareholders also want Shell to include 100 per cent of emissions from its operations as part of its new policy. They said the new plans do not include emissions from oil and gas production.

A Shell spokesperson said the company was "working hard on reducing carbon intensity".

Shell has received criticism for developing some high-polluting projects like the Canadian oil sands. However, the firm sold most of its stake in the costly, carbon heavy projects this year.

Investors will also next week vote on Shell boss Ben van Beurden's pay package increase of 60 per cent to €8.263m in 2016.

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