Shell is the latest oil giant to commit to carbon neutrality. Following BP’s announcement earlier this year, Shell has now unveiled an ambitious set of targets that aim to reduce its greenhouse gas emissions to net zero by 2050 or sooner. Simply put, ‘net zero’ means achieving an overall balance between emissions that are created and emissions that are taken out of the atmosphere. So by achieving net zero, Shell will have no adverse impact on the emissions contributing to climate change.
That’s obviously no small feat for a company whose entire business essentially relies on the creation of emissions, but Shell is confident it can make it work. Firstly, it’ll tackle what are known as scope one and two emissions, which are those created by its own operations and the energy the company consumes. Then — and in a move that makes its net zero plans a little more comprehensive than the likes of rival BP’s — it’ll look at scope three emissions. These are the emissions created when customers use Shell products, and they’re harder to manage.
Because Shell can’t directly control scope three emissions these won’t be included in the company’s overall ambition, but it has said it will “pivot towards serving businesses and sectors that by 2050 are also net-zero emissions.” This means it has to make the products it sells, such as jet fuels and gasoline, greener. As such, its long term ambition is to reduce the net carbon footprint of the energy products it sells by 65 percent by 2050 (and by 30 percent by 2035). This, alongside Shell’s “pivot” towards supporting sectors that use its goods, should mean that scope three emissions are also offset.
Compared to Shell’s previous target — to reduce its net carbon footprint by 50 percent by 2050 — the new goals represent a new and intense focus for the company. However, beyond its assurances that it will be more energy efficient and use lower-carbon energy products, the company hasn’t given any kind of granular details on exactly how it hopes to achieve its goals. Nor has it said how it intends to finance them. Back in 2017 the company said it wanted to remain “in step” with a society working towards a sustainable future, yet last year it spent roughly just eight percent of its $24 billion budget on low-carbon energy. In a statement reported by Reuters, the company said: “Shell’s aim is that, in the future, its operating plans and budgets will change to reflect this movement towards its new net-zero emissions ambition.”
Logistical ambiguities aside, environmentalists will no doubt be wary of Shell’s promises, given its tumultuous history with climate groups. While it’s publicly claimed to support the Paris climate accord, investigations have shown that Shell has spent millions on lobbying activities against climate policies. Internal documents also suggest the company was well aware of the consequences of climate change back in the 1980s and made a conscious decision to delay action.
However, while many will rightly or wrongly denounce Shell’s net zero goals as greenwashing, the fact remains that climate change remains one of the greatest threats to humanity, and companies must take action if they’re to remain profitable in the future. Setting ambitious targets now will help Shell sustain its bottom line in the future, whether it genuinely cares about the environment or not.