Royal Dutch Shell is to link executive pay with carbon emissions targets, following pressure from investors including the Church of England Pensions Board.
The energy giant aims to set three-to-five-year carbon footprint targets every year and has signed a joint statement with a group of 310 investors with more than $32 trillion (£25tn) of assets under management, dubbed Climate Action 100+.
The BBC says the firm “is still in talks with investors over the precise figures over carbon targets and what percentage of pay might be affected, but it is estimated that as many as 1,300 high-level employees could be affected”.
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David Cumming of Aviva Investors told the broadcaster: “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,” he said, adding other oil firms would be forced to follow Shell's example.
The Church of England under the Archbishop of Canterbury Justin Welby has led the way in pressuring companies it invests in to adopt a more ethical strategy – particularly in regards to fossil fuels.
Adam Matthews, director of ethics and engagement for the church’s pensions board, said the Shell move sets a benchmark for the rest of the oil and gas sector.
It comes as government representatives meet in Poland for a United Nations summit on climate change, which will lay out a “rule book” to implement the 2015 Paris climate accord.
In a bid to combat climate change, the World Bank also announced on Monday it is to make $200bn (£157bn) available to fund action from 2021-25 which will help countries adapt to the effects of warming and reduce greenhouse gas emissions.
Jim Yong Kim, the president of the World Bank, said the poorest and most vulnerable people were at the greatest risk, and urged other financial institutions to follow its lead.
The extra $200bn is double the amount available for the World Bank’s current five-year plan, and will include funding towards early-warning systems which is expected to help 250 million people in 30 developing countries prepare for extreme weather. Further funding will also go towards “smart agriculture” which will help protect food production in some of the world’s worst affect developing countries, reports The Guardian.
“We are pushing ourselves to do more and go faster on climate and we call on the global community to do the same,” Kim said. “This is about putting countries and communities in charge of building a safer, more climate-resilient future.”
