(Alliance News) - Royal Dutch Shell PLC has been ordered a Dutch court to reduce its net carbon emissions by 45% by 2030, with Chief Executive Ben van Beurden saying that the energy company will "rise to the challenge".
On Wednesday, the District Court in The Hague ruled that by 2030 Shell must reduce its net carbon emissions by 45%, compared to its 2019 level.
"We all know we must urgently tackle climate change and achieve the goal of the Paris Agreement for countries to limit global warming to 1.5 degrees Celsius. The court ruling has not changed the fact that Shell is more determined than ever to play its part and lead in this global challenge," van Beurden wrote on LinkedIn on Wednesday, in reply to the court ruling.
Shell in February set out plans to reach net zero carbon emissions by 2050, while at the same time shrinking debt and maintaining a "progressive dividend policy".
By 2023, it aims to shrink net carbon intensity by between 6% and 8%, 20% by 2030, and 45% by 2035 before complete elimination on a net basis by 2050, using 2016 as a baseline.
This means that it would have to reach its 45% emissions reduction target five years early.
van Beurden remained upbeat in the face of the task.
"The court has said its decision applies immediately and should not be suspended pending an appeal. For Shell, this ruling does not mean a change, but rather an acceleration of our strategy. We have a clear target to become a net-zero emissions business by 2050, in step with society's progress towards achieving the goal of the Paris Agreement. We have set rigorous, short-term reduction targets along the way to make sure we achieve net zero," he said.
Shell's strategy came under flak from a group of investors in mid-May, who said the company was not doing enough for climate change.
However, the energy major won support from the majority of its shareholders for its green plan in following the climate resolution proposed by Follow This, an activist group which called on the oil firm to adopt "truly Paris Aligned emissions reduction targets".
"The resolution asked, again, for truly Paris [Agreement]-aligned emissions reduction targets, and for Shell to shift its investments towards renewables," a statement from Follow This said on May 18.
Shell said the resolution was not in the best interests of the company, with 89% of Shell's investors rejecting the resolution proposed by Follow This.
Follow This founder Mark van Baal said: "Shell's policy falls short of what is needed to protect investors from devastating climate change."
Follow This added that Shell's climate promises are "for the distant future" and are failing "to convince investors".
"Still, for a long time to come we expect to continue providing energy in the form of oil and gas products both to meet customer demand, and to maintain a financially strong company. We need this financial strength to keep attracting investment in Shell," van Beurden noted on Wednesday.
Shell shares were down marginally at 1,383.00 pence each in London on Wednesday just before midday.
By Greg Roxburgh; gregroxburgh@alliancenews.com
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