Royal Dutch Shell has announced that shareholders at the 2020 annual general meeting will be asked to vote on linking executive pay with the company’s achievements in reaching self-imposed net carbon reduction measures.
The move is a victory for the active investor group Climate Action 100+, composed of 310 investors with more than US$32Trn in assets under management. It acted in concert with Institutional Investors Group on Climate Change, composed of 150 members including nine of the 10 largest pension funds and asset managers in Europe, who represent over €21Trn in assets.
Linking executive pay to net zero carbon targets is advocated by the Taskforce on Climate-related Financial Disclosures, but it is believed that Shell is the first oil major to take the step of implementing the link between pay and environmental performance.
This could have wider implications in the tanker industry. If other oil majors follow suit, linking executive pay to environmental performance could become a feature of the corporate vetting of counter-parties in a bid to raise the whole of the oil industries' net carbon performance.
Shell is one of the oil majors that send delegates to the Asian Tanker Conference in Singapore in February 2019. Book now to ask their view of this announcement.