Monday 29 March 2021 11:56 am

Shell suggests linking director's pay with climate performance

British-Dutch energy giant Shell has suggested linking its director’s pay with the groups’ climate performance today, as climate resolution edges to the top of industry discussion.

The move would signal a shift in priorities in the energy sector, as directors currently receive bonuses that are tied to natural gas production volumes.

Shareholders are set to vote for the plan on 18 May, which would mark Shell’s climate commitments equal to financial measurements when it comes to paying directors in shares.

Under the changes, the weighting of the energy transition metric to calculate bonuses would increase from 10 per cent to 15 per cent.

Shell said its carbon emissions peaked in 2018 at around 1.7bn tonnes, including greenhouse gases from oil and gas products Shell did not produce itself but sold to its customers. 

Other industry giants like BP exclude emission data from products mined by others in their climate reporting. 

Read more: Energy firms refusing to supply pubs during pandemic, trade body says

Last week, BP told its shareholders to vote against a climate resolution at its upcoming AGM that would demand the company bring its decarbonisation plans closer in line with the 2015 Paris agreement.

The oil giant, which has set itself the target of being a net zero firm by 2050, said that the resolution would “set back” the delivery of its existing strategy.

The resolution was proposed by activist investor group Follow This, which has been working with BP on a joint climate resolution.

However, the group’s leader, Mark van Baal, said that the two had failed to come to an agreement because BP’s current strategy will see emissions increase across the next decade.

Read more: BP tells shareholders to vote against climate resolution at AGM