Royal Dutch Shell has announced plans to introduce carbon emission targets following pressure from investors.
The company will introduce three-to-five year targets every year from 2020 after investors pressured the group and said that climate change is “one of the greatest systemic risks facing society today”.
The new targets will also be linked to the pay of executives.
Chief Executive Officer Ben van Beurden said in a statement: “We are taking important steps towards turning our Net Carbon Footprint ambition into reality by setting shorter-term targets.”
David Cumming of Aviva Investors said: “This is evidence of the growing power of what they call ESG – environmental, social and governance – investing. Investors are increasingly concerned over environmental and social metrics like carbon emissions…. and encouraging moves like the one seen today.”
“We will see more of this going forward. The pressure is on for that, they will come round to statutory [carbon] metrics,” he added.
Pressure particularly came from the Church of England Pensions Board.
According to Adam Matthews, director of ethics and engagement for the Church of England pensions board, the introduction of climate targets will set “a benchmark for the rest of the oil and gas sector”.
Justin Welby, the Archbishop of Canterbury also commented on the targets by the Anglo-Dutch company and said: “As governments meet at the United Nations climate negotiations in Poland, I am delighted to see a unique announcement on climate change between investors and one of the largest companies in the world – Royal Dutch Shell.”
“I am pleased that the Church of England Pensions Board has worked in collaboration with other investors… and with the management of Shell.”
Shares in the group (AMS: RDSA) are currently trading +1.67% (1603GMT).