Share Name Share Symbol Market Type Share ISIN Share Description
Royal Dutch Shell Plc LSE:RDSB London Ordinary Share GB00B03MM408 'B' ORD EUR0.07
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  -56.20 -3.96% 1,362.20 1,361.80 1,362.40 1,416.00 1,351.20 1,411.00 17,716,727 16:35:12
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Oil & Gas Producers 132,052.6 -19,723.5 -203.3 - 50,486

Royal Dutch Shell plc Notice Of 2021 Agm And Shell Energy Transition Strategy

15/04/2021 7:00am

UK Regulatory (RNS & others)

   London, April 15, 2021 
   -- Virtual attendance and participation enabled for the Annual General 
      Meeting ("AGM") 
   -- Shareholders encouraged to vote in advance of the AGM, but voting is also 
      enabled during the meeting 
   -- Board requests support for energy sector's first shareholder advisory 
      vote on an energy transition strategy 
   Today, Royal Dutch Shell plc ("Shell") posted notice of its AGM (the 
"Notice"), which can be viewed and downloaded from 
The Notice states that the AGM is scheduled to be held at Shell 
headquarters, at Carel van Bylandtlaan 16, 2596 HR, The Hague, The 
Netherlands at 10:00 (Dutch time) on Tuesday May 18, 2021. 
   In addition, Shell publishes its Energy Transition Strategy which can 
also be downloaded in pdf format from 
   AGM 2021 
   At the time of drafting the Notice, both the Dutch and UK Governments 
have banned public gatherings with strict exceptions.  We continue to 
believe that these restrictions, even if eased ahead of our AGM, 
significantly restrict our ability to safely and effectively plan and 
hold an AGM with shareholders physically present. 
   Accordingly, the technical venue of the Company's AGM will be at our 
headquarters location at Carel van Bylandtlaan 16, 2596 HR The Hague, 
The Netherlands.  However, in order to protect public safety and prevent 
the spread of the coronavirus, physical attendance at the meeting will 
be strictly limited to the Chair, the Chief Executive Officer, the Chief 
Financial Officer and the Company Secretary.  Unfortunately, that 
necessarily means that physical attendance will not be allowed for any 
shareholders, including their proxy representatives. 
   Arrangements for the 2021 AGM 
   This year our AGM will be webcast, allowing two ways shareholders can 
follow the proceedings in the comfort and safety of their homes: i) 
simply watching the webcast; or ii) attending and participating in the 
webcast by registering through an electronic platform ("virtually 
attending").  Shareholders who wish to simply watch the webcast should 
log on to and follow the online instructions. 
Shareholders that want to vote or ask questions at the meeting, should 
access the virtual meeting. 
   Shareholders wanting to access the meeting virtually should refer to the 
materials sent to them. Those holding shares via an intermediary, should 
contact that intermediary for further information. 
   Shareholders are encouraged to register in the "Keep up to date with 
Shell" section of the Shell website at to receive the latest AGM news. 
   Shareholder questions 
   Our AGM normally provides an opportunity for shareholders to ask 
questions about the business set out in the Notice and to raise other 
matters about the business of the Company. This year we are planning a 
question and answer session during the AGM with those shareholders 
attending virtually. Instructions about how to ask a question will be 
provided to shareholders once the meeting has been accessed on May 18, 
2021.  Further information can also be found on pages 20 and 23 of the 
Notice of Meeting, available on our website at 
   Shell Board requests support for energy sector's first shareholder 
advisory vote on an energy transition strategy 
   Today also marks the publication of Shell's Energy Transition Strategy, 
which has been published for submission to a shareholder advisory vote 
at the 2021 AGM.  The document is published simultaneously with the 
Notice of Meeting and shall be deemed to be incorporated in, and form 
part of, the Notice of Meeting. 
   The publication of Shell's Energy Transition Strategy follows detailed 
conversations with shareholders and describes Shell's energy transition 
strategy as we work towards becoming a net-zero emissions energy 
business by 2050, in step with society's progress towards the goal of 
the UN Paris Agreement on climate change, including our emissions 
targets. The report aims to help investors and wider society gain a 
better understanding of how we are addressing the risks and 
opportunities of the energy transition. 
   We are the first energy company to submit our energy transition strategy 
to shareholders for an advisory vote and will be publishing an update 
every three years until 2050. Every year, starting in 2022, we will also 
seek an advisory vote on our progress towards our plans and targets. The 
vote is purely advisory and will not be binding on shareholders. 
   Although the Shell Energy Transition Strategy is included in this 
announcement, we recommend you view the online PDF of the document, 
which is available at 
   It is as important as ever that shareholders cast their votes in respect 
of the business of the AGM. We strongly encourage our shareholders to 
submit their proxy voting instructions ahead of the meeting. Any advance 
voting must be done by completing a proxy form or submitting proxy 
instructions electronically. We strongly encourage you vote as early as 
   If appointing a proxy, shareholders are strongly encouraged to appoint 
the "Chair of the meeting" to ensure their appointed proxy is present 
and can vote on their behalf. 
   Shareholder presentation, London 
   In prior years we have held a Shareholder Presentation in London, two 
days after the AGM. For the reasons outlined in the Notice of Meeting, 
we have again deemed it necessary to cancel this event. 
   We recognise that some of our shareholders value this opportunity to 
engage in person with the Board, and like us, they may consider this 
news most unwelcome.  However, we must consider safety first, and the 
changes we are making in these continuing exceptional circumstances have 
been made to protect our people and those that may have attended this 
   We hope that our shareholders who typically attend this presentation 
take the alternative opportunity to join our AGM virtually. 
   National Storage Mechanism 
   In accordance with the Listing Rules, a copy of each of the documents 
below have been submitted to the National Storage Mechanism and are/will 
be available for inspection at: 
   -- Annual Report and the Form 20-F for the year ended December 31, 2020 
   -- Notice of the 2021 Annual General Meeting 
   -- Shell Energy Transition Strategy 
   -- Notice of Availability of Shareholder Documents 
   -- Proxy Form relating to the 2021 Annual General Meeting 
   The Annual Report and the Form 20-F for the year ended December 31, 2020 
can also be viewed and downloaded from the Company's website: 
   Printed copies of the Notice and associated documents will be despatched 
to those shareholders who have elected to receive paper communications. 
   Royal Dutch Shell plc 
   1          CHAIR'S MESSAGE 
   6          BECOMING NET ZERO BY 2050 
   25        A JUST TRANSITION 
   32        DISCLAIMER 
   This publication describes Shell's energy transition strategy as we work 
to become a net-zero emissions energy business by 2050, in step with 
society's progress towards the goal of the UN Paris Agreement on climate 
   It aims to help investors and wider society gain a better understanding 
of how Shell is addressing the risks and opportunities of the energy 
transition. It shows how we will navigate the transition profitably and 
in line with our purpose -- to power progress together with more and 
cleaner energy solutions. 
   We have prepared this Energy Transition Strategy publication for 
submission to a shareholder advisory vote at the Annual General Meeting 
of Royal Dutch Shell, on May 18, 2021. It follows detailed conversations 
with shareholders and describes Shell's energy transition strategy, 
including our emissions targets. 
   Your Directors recognise their responsibility to set the company's 
strategy. This is unchanged. We consider this publication, and the 
strategy it summarises, to be aligned with the more ambitious goal of 
the Paris Agreement, to limit the increase in the average global 
temperature to 1.5 degrees Celsius above pre-industrial levels. 
   Shell is the first energy company to submit its energy transition 
strategy to shareholders for an advisory vote. We will publish an update 
every three years until 2050. Every year, starting in 2022, we will also 
seek an advisory vote on our progress towards our plans and targets. 
   The vote is purely advisory and will not be binding on shareholders. We 
are not asking shareholders to take responsibility for formally 
approving or objecting to Shell's energy transition strategy. That legal 
responsibility lies with the Board and Executive Committee. 
   While the energy transition brings risks to the company, it also brings 
opportunities for us to prosper and to build on our positive 
contribution to society. Our strategy, as outlined in this report, is 
designed to minimise those risks while enhancing our ability to 
profitably lead as the world transitions to an energy system that is 
aligned with the goal of the Paris Agreement. 
   It is important for shareholders to have a clear understanding of the 
company's strategy as we work together to meet the goal of Paris. The 
Board and management also believe it is important for all shareholders 
to have a vehicle to express their views on whether our strategy is 
reasonable in the current environment. This advisory vote is designed to 
be that vehicle. It does not shield or abdicate the Board's or 
management's legal obligations under the UK Companies Act. 
   The support of our shareholders is critical for us to achieve our target 
to become a net-zero emissions energy business by 2050, in step with 
society. We hope to gain your support for the approach described in this 
publication. In addition to your vote, we invite your continued feedback 
ahead of the publication of our next Energy Transition Strategy which 
will be presented to shareholders before the Annual General Meeting in 
   The Board recommends that you vote in favour of resolution 20, in 
support of the energy transition strategy described in this publication. 
   Tackling climate change is the biggest challenge the world faces today. 
Our Powering Progress strategy, which we launched in February 2021, sets 
out how Shell can and must play a leading role in helping society to 
meet that challenge. 
   As we transform our business, it is more important than ever for our 
shareholders to understand and support our approach. That is why we are 
publishing details of our energy transition strategy and, for the first 
time, submitting it to shareholders for an advisory vote at our Annual 
General Meeting this year. 
   Our target to become a net-zero emissions energy business by 2050, in 
step with society's progress towards the goal of the Paris Agreement on 
climate change, is at the heart of our energy transition strategy. That 
means continuing to reduce our total absolute emissions to net zero by 
   We have set our net-zero target, and our short- and medium-term carbon 
intensity targets, so that they are fully consistent with the more 
ambitious goal of the Paris Agreement: to limit the increase in the 
average global temperature to 1.5degC above pre-industrial levels. And 
our targets cover the full range of our emissions, Scopes 1, 2 and 3 of 
all the energy we sell, not just the energy we produce. 
   We are asking our shareholders to vote for an energy transition strategy 
that is designed to bring our energy products, our services, and our 
investments in line with the temperature goal of the Paris Agreement and 
the global drive to combat climate change. It is a strategy that we 
believe creates value for our shareholders, our customers and wider 
   Most of our emissions come from the use of our fuels and the other 
energy products we sell. So it makes sense to place our customers at the 
centre of our energy transition strategy. It is where we can make the 
biggest difference. We will work with our customers to change and grow 
demand for low-carbon energy products and services, sector by sector, 
using the strength of our business relationships, knowledge and 
   We will increasingly offer low-carbon products and solutions, such as 
biofuels, charging for electric vehicles, hydrogen and renewable power, 
as well as carbon capture and storage and nature-based offsets. In this 
way, we expect to build low-carbon businesses of significant scale over 
the coming decade. In addition, we will drive down emissions from our 
own operations as we continue to provide the oil and gas products our 
customers need today, while at the same time helping them move to a low- 
and zero-carbon future. 
   To be clear, the best way for Shell to contribute to the energy 
transition is to work with our customers to help shape demand for 
low-carbon energy products and services. In turn, the increasing need to 
supply low-carbon energy products and services will accelerate Shell's 
transition to net zero. Ending our activities in oil and gas too early 
when they are vital to meeting today's energy demand would not help our 
customers, or our shareholders. 
   The decision to seek an advisory vote on our energy transition strategy 
follows our continuing engagement with shareholders, including with 
Climate Action 100+, which represents investors with assets of around 
$54 trillion. This vote does not replace the responsibilities of our 
Directors in setting the company's strategy. We have based the structure 
of this publication around the net-zero disclosure standard developed by 
Climate Action 100+ for the oil and gas industry. 
   In the following pages we set out our short-, medium- and long-term 
targets, our decarbonisation strategy and how we intend to allocate 
capital across our three business pillars of Growth, Transition and 
Upstream in the years ahead. We also explain our approach to 
climate-related policy and advocacy, an important part of how we are 
working with governments and others to accelerate the transition to low- 
and zero-carbon energy. 
   As the world continues to grapple with the impact of COVID-19, companies 
also play an important role in powering lives. In this publication, we 
describe how we will support livelihoods and communities as we transform 
our business. 
   We also outline our strong governance and a commitment to transparency. 
As we continue to implement the recommendations of the Task Force on 
Climate-related Financial Disclosures, we show how we are managing the 
risks and opportunities of climate change. 
   I would like to thank the investor groups we have worked with as we have 
developed our energy transition strategy, including the Institutional 
Investors Group on Climate Change (IIGCC) and Climate Action 100+. We 
must continue our dialogue with investors as Shell continues to evolve. 
We will be transparent so that investors can continue to assess our 
climate strategy and compare our progress to that of other companies. 
   This is a critical time in the world's efforts to tackle climate change. 
It is also a time of tremendous opportunity for Shell. By transforming 
our business in line with our energy transition strategy, we will 
contribute to achieving a net-zero emissions energy system, help society 
reach its climate goals and create a compelling investment case for our 
shareholders, today and in the future. We ask our shareholders to vote 
for resolution 20 and support the execution of our energy transition 
   This is the first time that Shell has offered investors an advisory vote 
on our energy transition strategy. This vote represents the next step in 
our continuing dialogue with our investors. It is also one of many 
firsts on our path to becoming a net-zero emissions energy business. 
   -- Launched Powering Progress strategy to accelerate the transition of our 
      business to net-zero emissions, including targets to reduce the carbon 
      intensity of energy products we sell: by 6-8% by 2023, 20% by 2030, 45% 
      by 2035 and 100% by 2050. 
   -- Published the 2021 Industry Associations Climate Review, extending our 
      coverage to 36 industry associations. 
   -- Offered advisory vote on Shell's energy transition strategy. 
   -- Increasing the weighting of the Energy Transition performance metric in 
      the Long-term Incentive Plan (LTIP) from 10% to 20%. 
   -- Introduced an absolute greenhouse gas (GHG) abatement target to the 
      annual bonus scorecard, and the total weighting of measures connected to 
      GHG emissions is increasing from 10% to 15%. 
   -- Announced target to become a net-zero emissions energy business by 2050, 
      in step with society's progress as it works towards the Paris Agreement 
      goal of limiting the increase in the average global temperature to 
   -- Published the Industry Associations Climate Review Update, including 
      Shell's updated climate-related policy positions and our payments to key 
      industry associations. 
   -- Energy Transition performance metric extended to around 16,500 employees 
      through the performance share plan (PSP). 
   -- Published the first Industry Associations Climate Review, which reviewed 
      the alignment between our climate-related policy positions and those of 
      19 key industry associations of which we are a member. 
   -- Announced a programme to invest in natural ecosystems as part of our 
      strategy to act on global climate change, including addressing carbon 
      dioxide (CO2) emissions generated by customers when using our products. 
      This programme contributes to Shell's three-year target, beginning in 
      2019, to reduce our Net Carbon Footprint by 2--3% by 2021. 
   -- Introduced the Energy Transition performance metric into the LTIP. The 
      LTIP includes short-term targets linked to our Net Carbon Footprint 
      target, as well as a number of other strategic business transformation 
      targets that measure progress towards achieving our longer-term 
      ambitions. We were the first major energy company to connect executive 
      pay to the energy transition in this way. 
   -- Published the Shell Energy Transition Report, describing how we manage 
      climate-related risks and opportunities, as part of our response to the 
      recommendations of the Task Force on Climate-related Financial 
      Disclosures (TCFD). 
   -- Promoted the implementation of the TCFD recommendations and worked with 
      the Oil and Gas Preparers Forum and the World Business Council for 
      Sustainable Development (WBCSD) to strengthen our sector's response to 
      these recommendations. 
   -- Signed a joint statement with leading institutional investors on behalf 
      of Climate Action 100+ announcing steps that Shell had decided to take to 
      demonstrate alignment with the goals of the Paris Agreement on climate 
      change [A]. 
   -- Announced ambition to reduce the carbon intensity of the energy products 
      we sell by around half by 2050 and by around 20% by 2035, measured by our 
      Net Carbon Footprint, including the full life-cycle emissions from the 
      use of our energy products by customers. 
   -- Initiated the Methane Guiding Principles coalition, announcing a methane 
      emissions intensity target. 
   -- Introduced GHG intensity measures to our annual bonus scorecard. 
   Aligned with Paris                   In step with society 
   2016 baseline 
   -- 2-3% by 2021 
   -- 3-4% by 2022 
   -- 6-8% by 2023 
   -- 20% by 2030 
   -- 45% by 2035 
   -- 100% by 2050 
   Carbon intensity                                           Absolute carbon 
   2016 baseline                                               1.7 gtpa 
   79 gCO2e/MJ 0 gCO2e/MJ                         2018 
   0 gCO2e/MJ                                    2050      0 gtpa 
   We believe total carbon emissions from energy sold peaked in 2018 at 
around 1.7 gigatonnes CO(2) e per annum (gtpa) and will be brought down 
to net zero by 2050 
   By providing, investing in and scaling up low-carbon energy solutions 
for our customers 
   By limiting emissions as much as possible today 
   By capturing and offsetting any residual emissions 
   -- Eliminate routine flaring 
   -- Maintain methane emissions intensity <0.2% by 2025 
   -- Double electricity sold 
   -- >50 million households equivalent renewable power 
   -- 2.5 million electric vehicle charge points 
   -- Targeting 25 mtpa by 2035 
   -- Oil production decline 1-2% per annum 
   -- No new frontier exploration entries after 2025 
   -- Growing gas share to 55% of hydrocarbon production 
   -- Produce 8x more low-carbon fuels 
   -- Increase low-carbon fuel sales to >10% of transport fuels 
   -- Aiming for 120 mtpa 
   -- High-quality offsets only 
   Tackling climate change is an urgent challenge. It requires a 
fundamental transformation of the global economy, and the energy system, 
so that society stops adding to the total amount of greenhouse gases in 
the atmosphere, achieving what is known as net-zero emissions. 
   That is why Shell has set a target to become a net-zero emissions energy 
business by 2050, in step with society's progress in achieving the goal 
of the Paris Agreement on climate change. We believe our target supports 
the more ambitious goal of the Paris Agreement: to limit the increase in 
the average global temperature to 1.5degC above pre-industrial levels. 
   It is aligned with the findings of the Intergovernmental Panel on 
Climate Change (IPCC) which concluded that the world must reach net-zero 
carbon emissions by around 2050 to limit global warming to 1.5degC and 
avoid the worst effects of climate change. 
   Becoming a net-zero emissions energy business means that we are reducing 
emissions from our operations, and from the fuels and other energy 
products such as electricity that we sell to our customers. It also 
means capturing and storing any remaining emissions using technology or 
balancing them with offsets. 
   Increasing numbers of countries and companies have announced targets to 
achieve net-zero emissions by the middle of the century, and we are 
starting to see some changes in the demand and supply of energy. 
   Achieving the 1.5degC goal will be challenging but it is technically 
possible. The extent of global collaboration required will be 
unprecedented. The pace of change will also be different around the 
world. The wealthier, more developed countries and regions must move 
faster. If they do not, then those countries and regions that cannot 
move so quickly will not have the time they need. The European Union 
(EU), for example, must achieve net-zero emissions by no later than 2050 
if the world is to succeed in limiting global warming to 1.5degC. 
   Shell has built a scenario looking at what the EU might need to do to 
decarbonise which gives some insight into the scale of the significant 
challenge involved. The scenario identified nine areas for action. 
   As an illustration, achieving net-zero emissions in the EU in the next 
30 years could mean: 
   -- Double the generation of electricity, triple its share of final energy 
   -- Shift the electricity mix to 75% renewables, no coal 
   -- Target 10% hydrogen in final energy, including as a fuel for heating, 
      industry and heavy transport 
   -- Triple the use of biofuels, with a shift to advanced forms 
   -- Invest in infrastructure to improve energy efficiency per unit of GDP by 
      almost 45% 
   -- Incentivise green consumer and business choices in support of the green 
   -- Progressively raise the government-led carbon price in the EU to more 
      than EUR200/tonne of CO2 equivalent in 2050 
   -- Build at least two major carbon capture and utilisation facilities every 
      month (more than 1 million tonnes each) 
   -- Reforest at least 220,000 square kilometres in the EU (about half the 
      area of Spain) to remove the remaining 300 million tonnes of CO2 in 2050 
   Source: Shell Scenarios Sketch: A climate-neutral EU by 2050 
   Achieving the goal of the Paris Agreement will require simultaneous 
growth in supply and demand for low-carbon energy. Crucially, it will 
also require significant changes to the way our customers use energy, 
whether they are motorists, households or businesses. 
   All parts of society including energy producers, consumers and 
policymakers will need to take action. That is why our strategy is based 
on working with our customers and others to accelerate the transition of 
the energy system. This includes supporting government policies that 
will help the world achieve net-zero emissions by 2050. 
   We will build on our strengths, our global scale and deep knowledge of 
energy markets to help grow demand for low-carbon energy. In this way, 
we will continue to build a strong business while playing an important 
role in the transition to low-carbon energy. 
   Our net-zero target includes emissions from our operations, our Scope 1 
and 2 emissions, and the life-cycle emissions, including from the end 
use, from all the energy products we sell, our Scope 3 emissions. 
   We will reduce emissions from our own operations, including the 
production of oil and gas, by increasing energy efficiency and capturing 
or offsetting any remaining emissions. 
   More than 90% of our emissions come from the use of the fuels and other 
energy products we sell, so we must also work with our customers to 
reduce their emissions when that energy is used [B]. That means offering 
them the low-carbon products and services they need such as renewable 
electricity, biofuels, hydrogen, carbon capture and storage and 
nature-based offsets. 
   Importantly, our target includes emissions not only from the energy we 
produce and process ourselves, including oil and gas, but also from all 
the energy products that other companies produce and we sell [C]. This 
is significant because we sell more than three times the energy we 
produce ourselves. 
   In summary, our targets include all emissions from the energy we sell, 
and the majority of the emissions we include in our targets are not 
related to our own oil and gas production. 
   [B] This includes emissions from the use of energy produced and sold by 
Shell as well as full life-cycle emissions from energy produced by 
others and sold by Shell. Combined, these are reported under relevant 
categories of Scope 3 emissions 
   [C] Sales from retail stations that use the Shell brand but are not 
operated or supplied by Shell are excluded. 
   We believe our total absolute emissions peaked in 2018 at 1.7 gigatonnes 
and our climate target means we will have to bring that down to absolute 
net-zero emissions by 2050. 
   As we work to achieve that target, and to measure our progress over the 
next three decades, we have set short-, medium- and long-term targets to 
reduce the carbon intensity [D] of the energy products we sell. Carbon 
intensity is the total amount of greenhouse gas emissions associated 
with each unit of energy that we sell, and that is used by our 
   We use carbon intensity targets to measure our progress because we think 
they are the clearest way to demonstrate changes to our mix of energy 
products over time, as we add and then shift to low-carbon energy 
products and services. 
   We have set specific carbon intensity reduction targets for the 
following years. These targets are compared with 2016 and linked to the 
remuneration of around 16,500 Shell employees: 
   -- 2-3% by 2021 
   -- 3-4% by 2022 
   -- 6-8% by 2023 
   We also have medium- and long-term carbon intensity targets, in step 
with society: 
   -- 20% by 2030 
   -- 45% by 2035* 
   -- 100% by 2050* 
   gCO(2) e/MJ 
   -- 2016 baseline 
   -- 2023: -6-8% (Carbon intensity incl. mitigation by Shell (Net Carbon 
   -- 2030: -20% (Carbon intensity incl. mitigation by Shell (Net Carbon 
   -- 2035: -45% (Carbon intensity incl. all mitigation actions (Shell & 
   -- 2050: -100% (Carbon intensity incl. all mitigation actions (Shell & 
   We measure our carbon intensity with our Net Carbon Footprint 
methodology [E] which calculates the carbon intensity of the portfolio 
of energy products sold by Shell expressed as grams of CO(2) equivalent 
(gCO(2) e) per megajoule (MJ) of energy delivered to, and consumed by, 
our customers. 
   *   These targets include mitigation actions by our customers such as 
carbon capture and storage and nature-based offsets. 
   [D]Carbon intensity as used in this report refers to net carbon 
intensity, which includes offsets and is measured by our Net Carbon 
Footprint methodology. 
   Petrochemicals and other products such as lubricants are not included in 
our short- and medium-term targets because they are not burnt and do not 
produce Scope 3 emissions. Their production and processing produce 
emissions, and we include these within our target to achieve net-zero 
emissions (Scope 1 and 2) from our operations by 2050. 
   Shell's target is to become a net-zero emissions energy business by 
2050, in step with society. We also have short-, medium- and long-term 
targets to reduce our carbon intensity, measured by our Net Carbon 
Footprint methodology. We believe these targets are aligned with the 
1.5degC scenarios used in the IPCC Special Report on Global Warming of 
1.5degC (SR 1.5), most of which show the global energy system reaching 
net zero between 2040 and 2060. 
   There is no established standard for aligning an energy supplier's 
decarbonisation targets with the temperature limit goal of the Paris 
Agreement. In the absence of a broadly accepted standard, we developed 
our own approach to demonstrate Paris alignment by setting carbon 
intensity targets using a pathway derived from the IPCC scenarios 
aligned with the Paris goal. 
   We determined our targets using scenarios taken from a database 
developed for the IPCC SR 1.5 [F]. We filtered out certain outlying IPCC 
scenarios to ensure that Shell's targets are aligned with earlier action, 
and low-overshoot scenarios. Overshoot refers to the extent to which a 
scenario exceeds an emissions budget and subsequently relies on sinks to 
compensate for the excess emissions. 
   We then take the following steps: 
   1. The total energy in each of the scenarios is calculated at the point 
of delivered energy (energy that is processed by refining or 
liquefaction, for example, but before it is used for electricity 
generation) using a fossil fuel equivalence approach for electricity. 
This more accurately reflects the energy delivered by an energy supplier 
like Shell to the market. 
   2. The total net emissions of each scenario are calculated taking into 
account emissions stored using carbon capture and storage and offset 
using natural sinks. 
   3. The carbon intensity for each scenario is calculated by dividing the 
net emissions by the total delivered energy. The range of carbon 
intensities of the scenarios allows for the construction of a benchmark 
range after removing any outliers. 
   By using the benchmark range produced by this approach to set our 
targets, we aligned them with the necessary reduction in carbon 
intensity shown in the 1.5degC scenarios. This is illustrated in the 
graphic on the right that demonstrates how Shell's targets are 
positioned within the range of 1.5degC pathways. The upper and lower 
lines represent the upper and lower boundaries of the benchmark range 
derived from the IPCC scenarios. 
   Until 2035, our calculation of the total net emissions of each scenario 
includes only the expected mitigation actions by Shell such as carbon 
capture and storage and offsetting using natural sinks, including any 
use of offsets included in the carbon-neutral energy products we offer 
our customers. After that date, we also include mitigation actions taken 
separately by our customers. 
   Today, we do not include any mitigation steps taken separately by our 
customers. That is because the accounting standards to include those 
actions do not exist. Under existing protocols, energy suppliers report 
the Scope 3 emissions from the use of their products, which are 
equivalent to the Scope 1 emissions reported by the users of those 
   However, when users of energy mitigate their Scope 1 emissions by use of 
carbon capture and storage or offsets, there is no accounting protocol 
for reflecting the corresponding reduction in the Scope 3 emissions 
reporting by the energy supplier. 
   To account for reductions in emissions across full energy value chains 
it is necessary to build on the existing greenhouse gas reporting and 
accounting protocols to include mitigation actions by both energy 
suppliers and users. Shell is in discussions with standard-setting 
bodies such as Greenhouse Gas Protocol, the World Resources Institute 
and CDP to develop the accounting protocols and frameworks to include 
mitigation actions by energy suppliers and energy users. 
   Reporting and accounting for mitigations in this way will also need new 
systems for the exchange of data between suppliers and users of energy. 
We expect these developments will take three to five years. Our carbon 
intensity targets for 2035 and 2050 reflect this expected change in 
accounting approach. 
   [F] These scenarios do not include Shell's Sky 1.5 scenario. 
   gCO(2) e/MJ 
   We have set our targets to be in line with climate science and in step 
with society's progress as it works towards the Paris Agreement goal of 
limiting the increase in the average global temperature to 1.5degC. 
   This progress will depend on whether governments and businesses, 
including Shell, provide the right conditions and incentives for low- 
and zero-carbon choices, and on whether consumers embrace these changes. 
   We must work towards our long-term target of net-zero emissions 
immediately. That is why we have set a series of short-term targets that 
are reflected in the remuneration of 16,500 employees. These short-term 
targets are not conditional on whether society progresses towards the 
goal of net-zero emissions; and while extremely challenging, they are 
aligned with our current operating plans. 
   If we moved too far ahead of society, it is likely that we would be 
making products that our customers are unable or unwilling to buy. That 
is why we wish to work together with customers, governments and across 
sectors to accelerate the transition to net-zero emissions. Shell cannot 
get to net zero without society also being net zero. 
   For example, if we invested in producing sustainable aviation fuel, and 
made it available on commercial terms at all the airports Shell serves 
today, the investment would not significantly lower our or society's 
carbon emissions. Most aircraft are not yet certified to fly on 100% 
sustainable aviation fuel and the cost of the fuel is considerably more 
than traditional jet fuel, making it an uncompetitive choice for the 
   Our strategy instead is to work with partners -- including aircraft 
manufacturers, airlines, airports, major airline users and governments 
-- to stimulate and accelerate demand for sustainable aviation fuel. As 
demand grows, we will increase our investments. 
   The transport sector is a good illustration of how the energy transition 
is likely to unfold. As in other sectors, the reductions in carbon 
intensity will be slow at first, reflecting the challenge of switching 
today's forms of transport to new technologies. The IPCC Special Report 
shows that the energy intensity of fuels in the transport sector has 
fallen only slightly in the past 10 years, through the blending of 
biofuels with traditional fuels, the increased use of liquefied natural 
gas as a transport fuel, and the growth in electric vehicles. But as the 
cost of low-carbon vehicles comes down, for example, they will replace 
vehicles powered by internal combustion engines. The IPCC scenarios show 
the tipping point to be somewhere between now and 2030, leading to 
net-zero transport after 2050. 
   Shell will reduce the carbon intensity of our energy products by working 
with our customers, sector by sector, to help them navigate the energy 
transition. As we do so, we intend to build even deeper relationships 
with our customers and meet more of their energy needs. We will start by 
adding more low-carbon products, such as biofuels and electricity, to 
the mix of energy products we sell. Eventually, low-carbon products will 
replace the higher carbon products that we sell today. This 
transformation of our business will require a fundamental change to 
energy-related infrastructure and assets across economies (see box 
Structural change on page 14). 
   We are working with partners -- including aircraft manufacturers, 
airlines, airports, major airline users and governments -- to stimulate 
and accelerate demand for sustainable aviation fuel. As demand grows, we 
will increase our investments. 
   For example, in the road freight sector, we are working with transport 
companies, truck manufacturers and policymakers to identify pathways to 
decarbonisation. In the near term, we will continue to increase 
production of low-carbon biofuels. And we will offer biogas and LNG for 
trucks to customers in Europe, China and the USA. In the longer term, we 
intend to increase our sales of hydrogen for transport. We are also part 
of the H2Accelerate consortium, which looks at ways to create 
infrastructure for generating and supplying clean hydrogen to hydrogen 
trucks as they become available across Europe. 
   gCO(2) e/MJ 
   Shell's operating plans, outlooks and budgets are forecasted for a 
10-year period and are updated every year. They reflect the current 
economic environment and how we can reasonably expect our business to 
develop over the next 10 years. Our short-term targets are aligned with 
our current operating plans. 
   However, our operating plans do not yet reflect our long-term 2050 
net-zero emissions target, as it is not feasible to make a 30-year 
detailed operating plan. In the future, as society moves towards 
net-zero emissions, we expect Shell's operating plans, outlooks, budgets 
and pricing assumptions to reflect this movement and continue to be in 
step with society. This movement will also be reflected over time in our 
energy transition strategy that we are offering for an advisory vote. 
   Shell's carbon intensity in 2020 was 75 gCO(2) e/MJ, a 4% reduction from 
the previous year and a 5% reduction from the 2016 reference year. In 
2020, one of the major causes of this reduction was lower demand for 
energy. Demand for oil products experienced the most significant 
reduction, followed by natural gas and LNG. Another important factor 
contributing to the reduction of our carbon intensity was the increase 
in our power sales in absolute terms as well as in their share of the 
energy mix sold by Shell. The power we sold also had a lower average 
emissions intensity than in previous years, which further contributed to 
the overall reduction. 
   As a leading energy company, we serve the transport, industry, built 
environment and power generation sectors. Each has different needs. Some 
sectors are global while others are highly centralised and local. Some 
have assets that are designed to last more than 50 years, others less 
than 10 years. Our deep understanding of these sectors and our customers, 
and of the opportunities and challenges they face, will help us 
transform demand for our products. 
   Transforming energy demand is the focus of our decarbonisation strategy. 
To transform demand, we will work sector by sector across the energy 
system. We will change the mix of energy products we sell to our 
customers as their needs for energy change. 
   This is where we can make the greatest contribution to the energy 
transition, by increasing sales of low-carbon energy products and 
services. Today, we sell around 4.6% of final energy consumed in the 
world and produce around 1.4% of total primary energy. Our share of 
energy production may decline over the coming decades, but we intend to 
grow our share of low-carbon energy sales. 
   We are restructuring our company so that we can better identify 
opportunities and the role that we can play in each sector to help 
transform demand. We are moving from an approach focused on types of 
products to one where our customer and account management is focused on 
   We are introducing sector-based businesses accountable for driving the 
decarbonisation of the sectors they cover such as aviation, commercial 
road transport, passenger transport, shipping, technology and industry. 
We will build on our existing relationships across each sector, with 
consumers, infrastructure owners, other suppliers and policymakers to 
help to accelerate change. 
   The transformation of the energy system to net-zero emissions will 
require simultaneous action in three areas -- an unprecedented 
improvement in the efficiency with which energy is used, a sharp 
reduction in the carbon intensity of the energy mix and the mitigation 
of residual emissions using technology and natural sinks. While it is 
difficult to predict the exact combination of actions that will deliver 
the net-zero goal, scenarios help us to understand the direction and 
pace of the transition needed. 
   The diagrams on the next page use data from the International Energy 
Agency's Sustainable Development Scenario (IEA ETP 2020). They show how 
the energy mix and carbon dioxide emissions could change between 2019 
and 2050. 
   A fundamental shift is needed in the way energy is used and produced. 
For example, it will require a deep electrification of most energy 
end-uses and decarbonisation of that electricity. By 2050, most of the 
residual emissions come from energy use, while in comparison energy 
supply is far more decarbonised. Low- and zero-carbon energy, including 
hydrogen and biofuels as well as CCUS, will be needed to mitigate most 
emissions in hard-to-abate sectors, such as parts of transport and 
   While the Sustainable Development Scenario is a well-below 2degC 
scenario reaching net-zero emissions by 2070, it helps to show the scale 
of the transformation of the energy system needed. The IEA's Faster 
Innovation Case, which builds on the Sustainable Development Scenario, 
demonstrates how the transformation can be accelerated to achieve 
net-zero emissions by 2050. For example, compared to the Sustainable 
Development Scenario, it would need a 55% increase in hydrogen use, 25% 
more energy from electricity and 20% more bio-energy use. The use of 
CCUS will also need to be 50% higher, reaching 8 gigatonnes a year by 
   As well as changes to the supply of energy products, decarbonising the 
energy system requires structural change in the end use of energy as 
well. It requires energy users to improve, update or replace equipment 
so that they can use carbon-based energy more efficiently, or switch to 
low- and zero-carbon energy. For example, in the transport sector, 
decarbonisation includes replacing internal combustion engine vehicles 
with electric and hydrogen vehicles. 
   In industry, replacing oil- and coal-fired furnaces with electrical 
furnaces would be one solution, carbon capture and storage is another. 
And in buildings, replacing gas heating systems with electric heating 
systems would also contribute to decarbonisation. 
   Such structural changes will help to trigger transitions along the 
supply chain of individual sectors and across sectors, including the 
production of energy and emissions over time. The International Energy 
Agency suggests that these changes in the end use of energy will require 
substantial investment. Of the more than $1.5 trillion extra annual 
spending on energy-sector investment which is required under the IEA's 
Paris-aligned Sustainable Development Scenario, 55% will need to be 
spent on end use or what is more commonly known as demand-side 
   Our sector-based business model reinforces the place of customers at the 
heart of our strategy. It allows us to work together to identify 
opportunities for immediate carbon reductions, including low-carbon 
fuels, as well as for longer-term solutions that will help customers get 
to net zero. For example, in the Netherlands we have entered into an 
agreement to provide renewable power to Amazon from an offshore wind 
farm being constructed off the coast of the Netherlands, enabling Amazon 
to power more of its business with clean energy. 
   The guaranteed demand from Amazon helps us to invest further in the 
production of green hydrogen and CCS through the creation of a green 
energy hub in the port of Rotterdam. Shell aims to produce green 
hydrogen there using electricity generated by wind power, hydrogen that 
will be used at the Shell refinery in Pernis to decarbonise the 
production of fuels. 
   Through its air cargo fleet, Amazon also has a growing interest in 
aviation. Shell has one of the world's most extensive aircraft 
refuelling networks. We have agreed to supply Amazon with up to six 
million gallons of blended sustainable aviation fuel for its cargo 
aircraft. This biofuel, produced by the company World Energy using 
agricultural waste fats and oils, has lower life-cycle carbon emissions 
than conventional jet fuel. In December 2020, Shell and Amazon also 
announced minority investments in ZeroAvia, a company in the USA with 
ambitions to decarbonise aviation with hydrogen-powered planes. 
   We have formed a strategic alliance with Microsoft which includes us 
working together on digital technologies that help Shell and our 
customers manage and reduce our carbon footprints. Shell is also 
supplying Microsoft with low-carbon energy products and services, 
including renewable energy. 
   Rolls-Royce and Shell have collaborated for more than 100 years, 
pioneering technology, fuels and infrastructure that have shaped 
commercial aviation. Today, Shell and Rolls-Royce are working together 
to test Rolls-Royce engines to show they can run on 100% sustainable 
aviation fuel. 
   In the aviation sector, Shell is a founding partner of the Clean Skies 
for Tomorrow Coalition, an initiative with the Mission Possible 
Platform. This platform was launched by the World Economic Forum and the 
Energy Transitions Commission to achieve net-zero carbon emissions by 
the middle of the century from a group of traditionally hard-to-abate 
industry sectors. 
   The Clean Skies for Tomorrow Coalition consists of airlines, airports, 
fuel providers and engine manufacturers. It is working to reduce 
emissions from the aviation sector by making sustainable aviation fuel 
more widely used and available. The Clean Skies for Tomorrow Coalition 
has jointly developed and published policy proposals which it has put to 
the European Union to promote debate on how to accelerate the transition 
to climate neutrality and increase the uptake of sustainable aviation 
fuels [G]. 
   Our strategy includes participating in coalitions of companies and 
organisations to accelerate the transition to net-zero emissions. We 
will help to develop paths to low-carbon energy in different sectors, 
identify opportunities for low-carbon solutions, and advocate government 
policies and financial market regulations that support the transition. 
   In the shipping and road freight sectors, for example, we have partnered 
with Deloitte to explore paths to reducing emissions [H]. 
   As Shell works with our customers to identify the best paths to 
decarbonisation, we seek to avoid, reduce and only then mitigate 
   any remaining emissions. 
   We have six levers to help Shell and our customers decarbonise energy in 
the short, medium and long term: 
   -- Pursuing operational efficiency in our assets; 
   -- Shifting to natural gas; 
   -- Growing our low-carbon power business; 
   -- Providing low-carbon fuels such as biofuels and hydrogen; 
   -- Developing carbon capture and storage; and 
   -- Using natural sinks. 
   Our production sites are increasingly using lower-carbon energy sources. 
For example, we are installing eight new cracker furnaces at our 
Moerdijk petrochemicals complex in the Netherlands, replacing 16 older 
units. This is expected to reduce the site's energy consumption, and to 
lower greenhouse gas emissions by around 10% compared with 2019. 
   In the USA, we are building a 250 MW co-generation plant at our 
Pennsylvania chemicals facility that will also supply electricity to 
local homes. The chemicals plant has been designed with an 
energy-efficient gas cracker that will also use hydrogen as a fuel 
   As we implement our strategy, we are aiming for milestones which are 
supported by our business plans and planned capital investment. 
Operational                                                 Natural gas                                                  Low-carbon                                                   Low-carbon                                                CCS                                              Natural sinks 
 efficiency(1)                                               shift                                                        power business                                               fuels (biofuels, 
----------------------------------------------------------  -----------------------------------------------------------  -----------------------------------------------------------  --------------------------------------------------------  -----------------------------------------------  ---------------------------------------------------- 
--    Eliminating routine flaring                           --    Oil production peaked in 2019, expected to decline     --    Doubling electricity sold                              --    Producing 8 times more low-carbon fuels than today  --    Targeting more than 25 mtpa CCS (by 2035)  --    Aiming for 120 mtpa of nature-based solutions 
--    Maintaining methane emissions intensity <0.2% (2025)        1-2% per annum                                         --    Delivering equivalent of >50 million households with   --    Increasing low-carbon fuels sales to >10% of                                                         --    High-quality offsets only 
                                                            --    No new frontier exploration entries anticipated after        renewable electricity                                        transport fuels (up from 3% in 2020) 
                                                                  2025                                                   --    Operating 2.5 million electric vehicle charge points 
                                                            --    Growing gas share of hydrocarbon production to 55% 
----------------------------------------------------------  -----------------------------------------------------------  -----------------------------------------------------------  --------------------------------------------------------  -----------------------------------------------  ---------------------------------------------------- 
   Milestones for 2030 unless otherwise stated. This chart is illustrative 
of the potential impact across these levers. 
   1   For assets we operate EV charge points include charge points at 
Shell forecourts and new locations as well as operated charge points 
owned by customers and third parties. 
   The protection and restoration of natural ecosystems could play an 
important role in limiting global warming to below 1.5degC, while 
bringing additional environmental and social benefits, according to the 
IPCC [I]. 
   Nature-based solutions, or natural climate solutions, are projects that 
protect, transform or restore land. In this way, CO(2) emissions from 
the natural environment are reduced and more CO(2) emissions from the 
atmosphere are absorbed. These projects can lead to the marketing, 
trading and sale of carbon credits. Each carbon credit represents the 
avoidance or removal of 1 tonne of CO(2) . 
   The market for nature-based solutions and the number and type of 
projects which are being developed to meet this market demand is growing 
rapidly. McKinsey Nature Analytics estimates that there is the potential 
for nature-based projects to store an additional 6.7 gigatonnes of CO(2) 
every year by 2030. Based on current net-zero commitments from more than 
700 of the world's largest companies, there have already been 
commitments of carbon credits of around 0.2 gigatonnes of CO(2) by 2030 
   The Taskforce on Scaling Voluntary Carbon Markets (TSVCM), sponsored by 
the Institute of International Finance (IIF), estimates that the market 
for carbon credits could be worth more than $50 billion in 2030 [K]. 
   [I] IPCC, 2019: Summary for Policymakers. In: Climate Change and Land: 
an IPCC special report on climate change, desertification, land 
degradation, sustainable land management, food security, and greenhouse 
gas fluxes in terrestrial ecosystems 
   Nature-based solutions have a role to play in reducing the impact of the 
CO(2) emissions from the energy products that we sell. 
   Shell will use high-quality nature-based solutions, independently 
verified to determine their carbon impact and their social and 
biodiversity benefits. In line with our approach of avoid, reduce and 
only then mitigate, we expect to offer our customers nature-based 
solutions to offset around 120 million tonnes per annum of our Scope 3 
emissions by 2030. 
   Today, for example, we offer customers carbon-neutral driving using 
nature-based carbon offsets in seven countries. We also offer 
carbon-neutral liquefied natural gas cargoes, which use nature-based 
carbon credits to offset full life-cycle emissions, including methane. 
   In 2020, we invested around $90 million in the future development and 
purchase of nature-based offsets, and we expect to invest around $100 
million a year. 
   In 2020, we acquired Select Carbon in Australia, which runs more than 70 
carbon farming projects that span an area of around 10 million hectares. 
We are also working with project developers to invest in and develop new 
projects based on reforestation, agroforestry and mangroves. 
   In 2030, we expect our own portfolio of nature-based projects to supply 
most of the credits for our customers. Our trading business will 
purchase the rest from project developers that we screen to ensure the 
credits meet the same independently verified high standards. In 2020, we 
purchased more than 4 million tonnes of credits on behalf of our 
customers sourced from projects around the world. 
   Most climate scientists are clear that using technology to store carbon 
plays an important role in the transition of the energy system. The IPCC 
1.5degC scenarios show that even when the energy system reaches net-zero 
emissions, there will be residual emissions because some sectors and end 
users will not be able to eliminate the use of hydrocarbons. Some of 
these residual emissions will need to be stored. 
   Today, carbon capture and storage (CCS) facilities around the world can 
capture and store around 40 million tonnes per annum (mtpa) of CO(2) . 
Accelerating the pace of CCS deployment requires continued collaboration 
between governments, industry and investors, among others, to help 
unlock financing capacity, accelerate technology development and 
encourage public support. We recognise the scale of the challenge in 
developing CCS globally as quickly and as widely as needed. 
   Today, Shell is involved in seven of the 51 large-scale CCS projects 
globally, listed in 2019 by the Global CCS Institute. These seven 
projects store around 5 mtpa of CO(2) , or around 12.5% of global CCS 
capacity. By the end of 2020, for example, our Quest CCS project in 
Canada (Shell interest 10%) had captured and safely stored more than 5.5 
million tonnes of CO(2) since it began operating in 2015. 
   In Norway, Shell, our project partners and the Norwegian government have 
taken the final investment decision on the Northern Lights CCS project. 
This transformative project aims to become the first carbon storage 
facility with capacity to transport and store CO(2) from industrial 
facilities in Norway and potentially from across Europe. 
   In 2020, Shell invested around $70 million in CCS. This included 
progressing opportunities and operating costs for CCS assets in which 
Shell has an interest. We seek to have access to 25 mtpa of CCS capacity 
by 2035 -- equal to 25 CCS facilities the size of our Quest project, or 
around 20% of the capacity of all CCS projects being studied around the 
world today. 
   Our business has three pillars: Growth, Transition and Upstream. Within 
each pillar, we expect the underlying businesses to evolve and transform 
as demand for our products changes, driven through our sector-based 
   Our Upstream pillar delivers the cash and returns needed to fund our 
shareholder distributions and the transformation of our company, and 
provides vital supplies of oil and natural gas which the world needs 
   Our Transition pillar comprises Integrated Gas, and our Chemicals and 
Products business, and it makes the products needed to enable the energy 
transition. It produces sustainable cash flow and gives us the asset 
infrastructure to support our investments in our Growth business. 
   Our Growth pillar includes our service stations, fuels for business 
customers, power, hydrogen, biofuels, charging for electric vehicles, 
nature-based solutions, and carbon capture and storage. It focuses on 
working with our customers to accelerate the transition to net zero and 
is the foundation for the future businesses in Shell. 
   In our Upstream pillar: 
   We will focus our portfolio on nine core positions that generate more 
than 80% of Upstream's cash flow from operations. These core positions 
will attract around 80% of Upstream's capital spending. They are 
positions where we have superior capabilities, the potential for growth 
and access to strong integration with our Integrated Gas and Trading 
   The rest of our positions will be run on a leaner operating model. They 
will be tasked with either maximising cash generation or becoming core 
positions. In some cases, such as onshore Egypt and the Philippines, we 
will simply divest. We will reduce annual spending on exploration from 
around $2.2 billion in 2015 to around $1.5 billion between 2021 and 
2025. We have attractive exploration opportunities in the first half of 
this decade. But after 2025, we do not anticipate entries into new 
frontier exploration positions. 
   In our Transition pillar: 
   We intend to extend our leadership in LNG volumes and markets, with 
selective investments in competitive LNG assets to deliver more than 7 
million tonnes per annum (mtpa) of new capacity on-stream by the middle 
of the decade. We will continue to support customers with their own 
net-zero ambitions, with offers such as carbon-neutral LNG, which uses 
nature-based carbon credits to offset full life-cycle emissions, 
including methane. Our petrochemical business will continue to grow and 
provide products that enhance the efficiency of energy use. 
   We intend to reduce the number of refineries from 13 sites today to six 
high-value chemicals and energy parks, and reduce production of 
traditional fuels by 55% by 2030, from around 100 mtpa to 45 mtpa. We 
intend to grow volumes from our chemicals portfolio and increase cash 
generation from Chemicals by $1-2 billion a year by 2030. We will 
produce chemicals from recycled waste, and by 2025 aim to process 1 
million tonnes a year of plastic waste. 
   -- Natural gas emits between 45% and 55% less GHG than coal when used to 
      generate electricity and less than one-tenth of the air pollutants 
   -- More than 750 million tonnes of CO2 savings as a result of coal-to-gas 
      switching over the last decade 
   -- In 2020, for the first time on record, the number of coal-fired power 
      stations decreased 
   Estimated LNG trade volume in 2040, million tonnes 
   In our Growth pillar: 
   Our Marketing business is our single largest customer-facing business. 
In 2020, Marketing delivered more than $4.5 billion in net earnings and, 
by 2025, we expect it to generate more than $6 billion. We will achieve 
this by improving the market-leading position of our lubricants business, 
and by increasing the number of retail sites and daily customers we 
serve from 46,000 and 30 million respectively today, to 55,000 and 40 
million by 2025. We will also achieve this by growing non-fuel sales at 
our retail sites and sales of electricity. 
   This growing number of customers, made up of large and small businesses 
as well as individual consumers, will be looking to decarbonise their 
energy consumption over the coming decades. We intend to provide them 
with the options to do this, from low-carbon solutions such as clean 
electricity, hydrogen and biofuels, to carbon sinks or offsets for any 
remaining carbon emissions. 
   Shell is increasing the number of electric vehicle charging points 
globally -- for homeowners and businesses and for use on our forecourts 
-- from more than 60,000 today to more than 500,000 by 2025 and to 2.5 
million by 2030. By comparison, that is around 7% of the total number of 
public and private charge points expected in Europe alone by 2030, 
according to research by Bloomberg. 
   As the need for biofuels grows, in line with customer demand and 
policies to reduce transport-related emissions, we expect to extend our 
leading biofuels production and distribution business, which in 2020 
sold 9.5 billion litres of biofuels. Our joint venture Raízen, 
which produces low-carbon biofuels from sugar cane in Brazil, recently 
announced the acquisition of Biosev. This is set to increase 
Raízen's bioethanol production capacity by 50%, to 3.75 billion 
litres a year, around 3% of global production. 
   We aim for our power business to sell around 560 terawatt hours of 
electricity a year by 2030, which is twice as much electricity as we 
sell today, and for the electricity we sell to have lower carbon 
intensity than the grid average within the markets where we operate. We 
are growing our power businesses with a focus on Europe, the USA, 
Australia and Asia. 
   Million tonnes per annum 
            2020   2030  2040  2050 
----------  -----  ----  ----  ---- 
Low case    >1       10    50   186 
----------  -----  ----  ----  ---- 
High case   >1       40   190   696 
----------  -----  ----  ----  ---- 
   Source: Bloomberg NEF Hydrogen Economy Outlook (2020), IEA low-carbon 
hydrogen production data, IEA Sustainable development scenario 2030, 
Shell analysis 
   Building clean hydrogen 
   We intend to build on Shell's leading position in hydrogen by developing 
integrated hydrogen hubs initially to serve industry and heavy-duty 
transport. We will begin by producing and supplying hydrogen for our own 
manufacturing sites, especially refineries. For example, we are 
developing a hydrogen electrolyser at our refinery in Rheinland, Germany, 
which produces hydrogen from renewable sources. We will also continue to 
extend our network of hydrogen retail stations, with an increasing focus 
on heavy-duty transport. 
   The clean hydrogen market is still in the early stages and the volumes 
are still modest [L]. But we see strong potential for growth especially 
in hard-to-abate sectors of the economy. We aim to achieve a 
double-digit market share of global clean hydrogen sales by 2030. 
   [L] Shell's definition of clean hydrogen includes hydrogen made from 
renewable sources (usually referred to as green hydrogen) and hydrogen 
made from natural gas with carbon capture and storage (usually referred 
to as blue hydrogen). 
   -- In top three electric vehicle charging operators by volume 
   Energy solutions 
   -- Around 1 million customers of integrated home energy solutions (Shell 
      Energy Retail) 
   -- More than 80,000 operated electric vehicle charge points (primarily 
      through NewMotion) 
   -- Intelligent home battery energy storage (60,000 sonnen battery customers 
   -- Sustained growth of the commercial and industrial portfolio with more 
      than 10,000 customers across key markets 
   Trading and optimisation 
   -- Growing power trading business across Europe 
   -- A leading player in the UK distributed energy market (Limejump) 
   Renewable assets 
   -- The Netherlands: 160 MW of renewable generation capacity in operation and 
      1.6 GW in development across solar and wind* 
   -- Germany: 10 MW hydrogen electrolyser (RefHyne) expected to 
      start production in the summer of 2021 
   -- Ireland: 300 MW floating wind farm (Emerald) in early-stage development, 
      Shell share 51% 
   Shell is increasing the number of electric vehicle charging points 
globally for homeowners and businesses. 
   * Renewable generation capacity figures are gross. Source: Shell 
   a selection of investments, acquisitions and ventures 
----  -------------------------------------------------------  ---------------------------------------------------  ---------------------------------------------------------- 
2016  Wind 
       --    Blauwwind*, NL 
----  -------------------------------------------------------  ---------------------------------------------------  ---------------------------------------------------------- 
2017  Mobility                                                 Energy solutions                                     Energy access 
       --    Acquired NewMotion, NL                            --    Shell Energy Retail, UK (acquired as First Ut   --    SolarNow*, Uganda 
       --    Connected Freight*, Philippines                   --    Innowatts*, USA                                 --    SteamaCo*, Kenya 
                                                                                                                     --    Sunseap*, Singapore 
----  -------------------------------------------------------  ---------------------------------------------------  ---------------------------------------------------------- 
      Trading                                                  Hydrogen 
       --    Acquired MP2 Energy, USA                           --    Opened hydrogen stations in the UK and USA 
----  -------------------------------------------------------  ---------------------------------------------------  ---------------------------------------------------------- 
2018  Solar                                                    Wind                                                 Energy solutions 
       --    Silicon Ranch*, USA                                --    Atlantic Shores Offshore Wind*, USA           --    Shell Energy Inside, USA 
       --    Cleantech Solar*, Asia                             --    Mayflower Wind Energy*, USA 
       --    Opened Moerdijk solar farm, NL                     --    TetraSpar*, Norway 
----  -------------------------------------------------------  ---------------------------------------------------  ---------------------------------------------------------- 
      Hydrogen                                                 Energy access                                        Mobility 
       --    Opened hydrogen stations in California, USA        --    Husk Power*, India                            --    Ample*, USA 
       --    HyET Hydrogen*, NL                                 --    SunFunder*, Kenya 
----  -------------------------------------------------------  ---------------------------------------------------  ---------------------------------------------------------- 
2019  Mobility                                                 Wind                                                 Energy solutions 
       --    Acquired Greenlots, USA                            --    Acquired EOLFI, France                        --    Acquired sonnen, Germany 
                                                                                                                    --    Acquired Hudson Energy UK (rebranded to Shell Energy 
       --*, UK                                      --    CoensHexicon*, South Korea                          Retail in 2020) 
                                                                                                                    --    LO3 Energy*, USA 
       --    Revel*, USA                                                                                            --    Corvus Energy*, Norway 
       --    Aurora*, USA 
       --    Nordsol*, NL 
----  -------------------------------------------------------  ---------------------------------------------------  ---------------------------------------------------------- 
      Nature-based solutions                                   Energy access                                        Trading 
                                                                --    Orb Energy*, India                             --    Acquired ERM Power (rebranded to Shell Energy in 
       --    Nature-based solutions projects under way in                                                                  2020), Australia 
             Australia, Malaysia, Netherlands, Spain and UK     --    PowerGen*, Kenya 
                                                                                                                     --    Acquired Limejump, UK 
                                                                --    d.light*, Kenya 
----  -------------------------------------------------------  ---------------------------------------------------  ---------------------------------------------------------- 
      Solar                                                    Hydrogen 
       --    ESCO Pacific*, Australia                           --    Announced plans to build Rheinland Hydrogen 
                                                                      Electrolyser, Germany 
----  -------------------------------------------------------  ---------------------------------------------------  ---------------------------------------------------------- 
2020  Solar                                                    Mobility                                             Wind 
      --    Final investment decision to build Gangarri solar   --    Masabi*, UK                                    --    Shell and Eneco awarded tender to build 759 MW 
            farm, Australia                                                                                                Hollandse Kust (noord) offshore wind farm, NL 
                                                                --    InstaFreight*, Germany 
                                                                --    Spiffy*, USA 
----  -------------------------------------------------------  ---------------------------------------------------  ---------------------------------------------------------- 
      Nature-based solutions                                   Hydrogen                                             Energy solutions 
                                                               --    Announced plans to build 20 MW green hydrogen   --    Palmetto*, USA 
       --    Select Carbon, Australia                                electrolyser and refuelling stations, China 
                                                               --    ZeroAvia*, USA                                  --    GreenCom*, Germany 
       --    Climate Bridge*, China 
----  -------------------------------------------------------  ---------------------------------------------------  ---------------------------------------------------------- 
   * Minority investments 
   Shell's financial strength and access to capital give us the ability to 
reshape our portfolio as the energy system transforms and demand 
changes. They also allow us to withstand volatility in oil and gas 
markets. This strong financial framework is based on sector-leading cash 
flow, continued capital discipline, capital flexibility and a strong 
balance sheet. 
   We look to achieve the right balance between shareholder distributions 
and investing for the future, laying the foundation for both increased 
distributions and share price appreciation. 
   While our net debt is above the level of $65 billion, we plan to invest 
$19--22 billion a year across our portfolio. This will sustain our core 
businesses while funding moderate growth. 
   Once we have reduced net debt to $65 billion, we will look to further 
increase total shareholder distributions. Through progressive dividend 
and share buybacks, we are targeting total distributions to shareholders 
of 20-30% of our cash flow from operations. We will also seek to 
increase capital spending in a disciplined way. With this approach we 
expect that we will: 
   1) Limit our investments in Upstream. Our oil production peaked in 2019 
and we expect that it will gradually decline by 1-2% a year through to 
   2) Maintain our investments in our Transition businesses. We expect to 
see the share of gas rise to 55% of our hydrocarbon production in 2030. 
   3) Increase investments in our Growth businesses to build material 
low-carbon businesses of significant scale by the early 2030s. 
   As Shell progresses towards being a net-zero emissions energy business 
our cash flows will increasingly come from our Growth pillar, becoming 
less exposed to oil and gas prices with a stronger link to broader 
economic growth. As one of the largest commodity traders in the world, 
we expect additional opportunities to enhance cash delivery through 
integration and optimisation. 
   The characteristics of our Growth pillar mean that levels of capital 
investment are likely to be a poor proxy for the scale of the 
transformation of our business. Instead, we believe the best way to 
measure our progress towards our targets is through the carbon intensity 
of the energy products we sell, and the cash flows delivered by our 
business pillars. This is because our Growth pillar is likely to be less 
capital intensive than our Upstream and Integrated Gas businesses. 
   We will take the same approach to managing and reducing our emissions as 
we have done for managing our financial framework, that is by setting 
constraints, or budgets. 
   We will be setting carbon budgets for all our businesses and these will 
help to drive investment decisions which will in turn drive down our 
emissions. In this way, we will decouple our business growth from carbon, 
transforming what we sell and what we produce. 
   By assessing our investments and resources on the basis of our financial 
performance, and on the carbon intensity of our revenues, we will decide 
what changes to make to our business portfolio. 
   The carbon emissions constraints we place on our businesses will tighten 
over time, in line with our carbon intensity targets and as demand for 
low-carbon products increases. 
   We are setting carbon budgets for all our businesses and these will help 
to drive investment decisions which will in turn drive down our 
   $ billion 
   Peer range comprises ExxonMobil, Chevron, BP and Total, CFFO for 
             Historical 5-year 
                  average       Net debt >$65billion  Beyond 2025 
-----------  -----------------  --------------------  ----------- 
Growth                     11%                  20%         25% 
-----------  -----------------  --------------------  ----------- 
Transition                 48%                  45%         45% 
-----------  -----------------  --------------------  ----------- 
Upstream                   41%                  35%         30% 
-----------  -----------------  --------------------  ----------- 
             2020  Beyond 2025 
-----------  ----  ----------- 
Growth        16%       35-40% 
-----------  ----  ----------- 
Transition    43%       30-40% 
-----------  ----  ----------- 
Upstream      42%       25-30% 
-----------  ----  ----------- 
   We are shifting capital from our Upstream business to our Transition and 
Growth businesses as the energy transition accelerates and we sell more 
low-carbon energy products. 
   We aim to find the right balance between managing our Upstream assets -- 
which will produce the returns needed to help us fund the transition -- 
and investing in our Transition and Growth businesses. These businesses 
are essential to identify, build and scale up profitable projects that 
offer low-carbon energy solutions for our customers. Our investments in 
our three business pillars are characterised by several factors 
   -- Compared with our conventional Upstream assets, investments in low- and 
      zero-carbon solutions can require lower amounts of capital. 
   -- The levels of capital investment needed to maintain a renewable energy 
      business are also likely to be lower than in capital-intensive complex 
      engineering projects common in the oil and gas industry, with their 
      ongoing need for asset renewal and resource replenishment. 
   -- We can grow our sales of low-carbon energy without necessarily investing 
      in producing it ourselves by buying it from third parties and selling it 
      to our customers. This model is part of our business today, we sell more 
      than three times the energy we produce ourselves. 
   -- We can enter into different types of financial arrangements that enable 
      renewable generation capacity to be built, without bearing the full 
      capital cost of the project. For example, developing renewable production 
      as part of joint ventures allows us to reduce the capital investment 
      needed, while giving us access to valuable expertise from other partners. 
      It also gives us the opportunity to secure a substantial portion of the 
      energy produced, allowing us to grow customer sales (See box 
      Offshore wind). 
   -- Our investments in our Marketing business will help decarbonise the 
      energy system by increasing the provision of charging for electric 
      vehicles and increasing the use of biofuels and low- and zero-carbon 
   -- Our investments in natural gas can help to decarbonise energy use when it 
      replaces energy with a higher carbon intensity such as coal and fuel for 
   -- Restructuring our refinery business into energy parks will transform our 
      business away from our traditional oil-based energy products. 
   -- Most of our investments in our Upstream business are in maintaining 
      assets and sustaining the value of the portfolio. 
   -- Our existing Upstream assets are critical to delivering near-term cash 
      flow and to enabling moderate growth. 
   -- Our investments to improve the efficiency of our oil and gas facilities 
      can help reduce our operational emissions. 
   A natural decline in production happens in oil and gas reservoirs at a 
rate of around 5% a year across the oil and gas industry. It takes 
constant reinvestment to sustain production and extract resources. 
   Our planned capital investment of $8 billion in our Upstream business in 
the near term is well below the investment level required to offset the 
natural decline in production of our oil and gas reservoirs, and will 
not sustain current levels of production. 
   As a result of this planned level of capital investment, we expect a 
gradual decline of about 1-2% a year in total oil production through to 
2030, including divestments. 
   Powering lives by providing energy to homes. 
   Shell is part of the Blauwwind Consortium that was awarded the right to 
develop, construct and operate the Borssele III and IV wind farm off the 
Dutch coast. Shell entered with a 40% share in 2016 and Shell Energy 
Europe Limited secured a contract to sell 50% of the power produced. We 
sold half of our joint venture partnership in 2018 when we brought on 
board an additional partner. The wind farm is now fully operational and 
has a total installed capacity of 731.5 MW, equivalent to powering 
825,000 Dutch households. We still sell 50% of the power produced. 
   Shell is part of a consortium that has developed a wind farm off the 
Dutch coast. We sell 50% of the power produced. 
   Robust and sustainable government policies will be critical to help the 
world achieve the goal of the Paris Agreement and net-zero emissions by 
2050. These must include policies that accelerate the move to low-carbon 
energy in industries that are hard to decarbonise, sector by sector. 
   Shell's Powering Progress strategy includes working with governments to 
support the policies and regulatory frameworks to accelerate the 
transition to net zero. 
   We are seeing a growing number of countries aiming for net-zero 
emissions and enhancing their nationally determined contributions 
(NDCs). The USA has recently rejoined the Paris Agreement, for example, 
China has set out its plans to reach net zero by 2060, and the European 
Union (EU) has committed to climate neutrality, or net-zero emissions, 
in 2050. 
   Our expertise in providing energy can help to shape effective policy, 
legislation and regulation, and we engage with governments, regulators 
and policymakers directly and indirectly, including through industry 
associations. We are also working with other companies, governments and 
investors through coalitions to identify the policies needed in sectors 
such as aviation, shipping and road freight to help change demand and 
enable faster decarbonisation. 
   We are members of the Mission Possible Partnership sectoral coalitions 
for aviation, shipping, road freight and steel. Each of these coalitions 
works to help accelerate decarbonisation pathways, including through 
policy engagement. For example, we are a member of the Clean Skies for 
Tomorrow initiative, which has developed a joint policy proposal for a 
sustainable aviation fuel mandate in the EU which would require airlines 
to use an increasing ratio of sustainable aviation fuel. 
   Shell is also a member of the Jet Zero Council (JZC) in the UK, a 
partnership between industry and government. JZC aims to deliver 
zero-emission transatlantic flight within a generation, and to drive new 
technologies and innovative ways to cut aviation emissions. Shell is 
also a member of the European Round Table for Industry (ERT) which has 
called on the EU institutions to introduce sectoral roadmaps to net-zero 
emissions [M]. 
   We aim to be at the forefront of the drive for greater transparency 
around political engagement. We set out our approach, including our 
principles for responsible lobbying, in our statement on corporate 
political engagement which is published on our website [N]. 
   Our principles for participation in industry associations govern how we 
manage our relationships with industry associations on climate-related 
policy. They build on the Shell General Business Principles and the 
Shell Code of Conduct, and have been incorporated in the Shell Control 
Framework, which sets the requirements for how all Shell entities 
operate. The principles aim to ensure our memberships of industry 
associations do not undermine our support for the Paris Agreement and 
that they support the development of government policies that could help 
the world achieve net-zero emissions by 2050. 
   In 2019, we published our first Industry Associations Climate Review, 
and were one of the first companies to report this information [O]. The 
review assessed our climate-related policy alignment with 19 industry 
associations against our 2019 climate-related policy positions. The 
following year we published an update to our review. 
   In 2020, we updated Shell's climate-related policy positions and 
published them on our website [P]. These positions include support for 
the goal of the Paris Agreement and for the development of policies to 
help the world to achieve net-zero emissions by 2050. They also include 
support for carbon pricing, carbon capture utilisation and storage and 
nature-based offsets. 
   In the newly published 2021 Industry Associations Climate Review, we 
have reviewed 36 associations. We plan to publish our next update in 
   We will continue to work with governments, other companies, investors, 
non-governmental organisations, coalitions and industry associations to 
help society achieve the goal of the Paris Agreement and net-zero 
emissions. We will also continue to work towards greater transparency 
around climate lobbying and reporting. 
   [O]2019 Industry Associations Climate Review 
   The energy transition will create employment and opportunities for 
people to learn new skills. It may also adversely affect workers and 
communities, for example in areas where traditional products, business 
activities or jobs are phased out. 
   The Paris Agreement refers to the importance of a just transition, 
recognising that governments must take into account the workers affected 
by the shift to a low-carbon economy, and create "decent work and 
quality jobs". The UN Framework Convention on Climate Change, the parent 
treaty of the Paris Agreement, has defined decent work as "jobs that 
provide adequate incomes and social protection, safe working conditions, 
respect for rights at work and effective social dialogues". 
   Our Powering Progress strategy seeks to support livelihoods, communities 
and an inclusive society as we transform our business to meet our target 
of becoming a net-zero emissions energy business by 2050, in step with 
   One of the strategy's four main goals is powering lives, which sets out 
how we support livelihoods and communities. As we transform, we will 
continue to provide jobs, encourage local businesses to be part of our 
supply chain, promote entrepreneurship and offer skills training in 
communities where we operate. 
   We are working to help find viable ways to provide low-carbon energy 
that can support successful local economies. To do this we will work 
with governments, local communities, customers, employees, employee 
representative bodies, suppliers and industry groups. 
   We seek to work with contractors and suppliers who contribute to 
sustainable development and are economically, environmentally and 
socially responsible. 
   Our employees and their well-being are critical to the success of our 
business. During the energy transition, Shell will continue to respect 
workers' rights in line with the 1998 Declaration of the Fundamental 
Principles of Rights at Work published by the UN's International Labour 
Organization (ILO). We will continue to comply with ILO occupational 
health and safety standards and applicable laws and practices. 
   As portfolio changes affect our assets during the energy transition, we 
will seek to: 
   -- continue to engage with employees, employee representative bodies and 
      relevant government bodies at a local level, keeping them informed about 
      our plans and listening to any concerns; 
   -- provide wages and benefits that meet or exceed the national legal 
      standards; and 
   -- provide equal opportunity in recruitment, career development, promotion, 
      training and rewards. 
   As our portfolio changes, we will seek to help employees develop skills 
for the future. This will strengthen their long-term employment 
prospects and enable them to seize opportunities created by the energy 
   For example, the Pulau Bukom manufacturing site in Singapore will be 
affected by organisational changes and job reductions as it becomes one 
of our energy and chemicals parks. We aim to significantly reduce 
Bukom's carbon dioxide emissions as the site produces fewer crude-oil, 
fuels-based products, instead favouring lower-carbon alternatives that 
may include biofuels. But over the course of three years, staff numbers 
will go from the current level of around 1,300 to around 800. 
   We have partnered with the Singapore Shell Employees' Union to launch a 
Joint Capability Council (JCC) to help staff acquire new skills that 
will enable them to succeed in future roles. The JCC will help develop 
courses for employees in areas such as digital literacy and data 
   The JCC builds upon the UpSkill ShellSG initiative for all staff in 
Singapore. The UpSkill initiative allows our Singapore staff to access 
training in a wide range of subjects including digital skills, 
tech-enabled services, advanced manufacturing, leadership and project 
management. The initiative was developed in collaboration with local 
authorities who shared the aim of helping workers acquire skills that 
will enable them to succeed in the economy of the future. 
   The UN Sustainable Development Goals (SDGs) seek to address the world's 
biggest challenges, including ending poverty, improving health and 
education, and tackling climate change. Governments are responsible for 
implementing approaches that meet the SDGs, but success will require 
unprecedented collaboration and collective action involving businesses 
and civil society. 
   As a leading energy company, we will play our part in supporting the 
SDGs. Energy plays a critical role in enabling economic and social 
development and improving people's livelihoods. The supply of affordable, 
reliable and sustainable energy is crucial for addressing global 
challenges, including those related to poverty and inequality. That is 
why we are working to provide energy to those who do not have it today. 
   According to the International Energy Agency, in 2019 there were around 
770 million people in the world who lacked access to electricity. 
Hundreds of millions more are estimated to have an unreliable energy 
supply. One of our ambitions is that by 2030 we will provide reliable 
electricity to 100 million people in Africa and Asia who do not yet have 
   To help achieve this, we are developing market-based programmes that 
provide access to clean and affordable energy for some of the world's 
most remote and vulnerable people. We are investing in companies that 
specialise in solar home systems, mini-grids, and other innovations that 
improve access to energy. As well as managing our existing portfolio, we 
are also seeking to develop large-scale power projects in key markets 
and to use our global partnerships to improve access to energy. 
   Managing the impact of our activities on people living near our 
operations is essential to being a responsible organisation. Many of our 
operations are located close to communities, and we work with them to 
understand their priorities and concerns. In doing this we use 
international standards as our benchmark, including the International 
Finance Corporation's Environmental and Social Performance Standards -- 
as well as our own rigorous standards. 
   We employ people in more than 70 countries, providing income and 
benefits such as health care and pensions. Every year, we spend tens of 
billions of dollars on goods and services in the communities where we 
operate. Our activities generate revenues for governments through the 
taxes and royalties we pay and the sales taxes we collect on their 
behalf. This helps fund health care, education, transport and other 
essential services. 
   We strengthen local economies and employment opportunities through 
enterprise development programmes such as Shell LiveWIRE. The overall 
goal of these programmes is to enable communities to participate in and 
benefit from the stimulation of social and economic development. In 
2020, 19,319 people participated in our programmes, which also supported 
1,017 businesses. This helped create 1,805 jobs. In 2020, 99 businesses 
supported by Shell LiveWIRE entered our supply chain. 
   Climate change and risks resulting from greenhouse gas (GHG) emissions 
are a significant risk factor for Shell. They are managed in accordance 
with other significant risks through the Board and the Executive 
   The Board committees play an important role in assisting the Board with 
regard to governance and oversight of management of climate change risks 
and opportunities, as described in the Annual Report. The Safety, 
Environment and Sustainability Committee (SESCo) assists the Board in 
reviewing the practices and the performance of the Shell Group of 
companies, primarily with respect to safety, environment including 
climate change, and sustainability. 
   When reviewing these areas and deciding how to advise the Board, SESCo 
takes into account the Shell General Business Principles, Code of 
Conduct, and HSSE & SP Control Framework. SESCo's duties include 
reviewing Shell's progress towards meeting our climate targets and the 
energy transition. SESCo also advises the Remuneration Committee (REMCO) 
on metrics relating to sustainable development and energy transition. 
   The Remuneration Committee is responsible for determining the Directors' 
Remuneration Policy, in alignment with our business strategy. 
   Starting in 2021, we are increasing the weight associated with GHG 
emissions management in the annual scorecard, which helps determine the 
annual bonus levels for all our employees, including members of the 
Executive Committee. The GHG emissions intensity metric and its weight 
(10%) will remain unaltered, but we will add a new metric that measures 
the execution of GHG-abatement projects with a weight of 5%. 
   Performance Share Plan and Long-term Incentive Plan [Q] 
   For 2021 awards made under the Performance Share Plan (PSP), the 
weighting of the energy transition condition has doubled from 5% to 10%. 
For 2021, the weighting of the energy transition condition in the 
Long-term Incentive Plan (LTIP) will also double from 10% to 20%. The 
target range is a 6-8% reduction in net carbon intensity by 2023 against 
the 2016 baseline NCF of 79 grams of carbon dioxide (CO ) equivalent per 
   The other targets linked to our strategic ambitions will also evolve, 
with the metric connected to commercialising advanced biofuel technology 
broadening to a measure of growing new cleaner energy product offerings. 
The targets for the leading energy transition measures are commercially 
sensitive and will be disclosed retrospectively. The energy transition 
condition was included again in the 2020 LTIP awards for Executive 
Directors and Senior Executives and was also incorporated into the 
Performance Share Plan awards made to around 16,500 employees globally. 
   [Q]Executive Directors and Executive Committee members participate in 
the LTIP. Around 150 Senior Executives participate in the same plan. The 
measures and metrics for that plan also apply to 50% of the Performance 
Share Plan (PSP) awarded to around 16,500 employees. 
   This publication and the description of our energy transition strategy 
are part of our continuing work to implement the recommendations of the 
Task Force on Climate-related Financial Disclosures (TCFD). 
   We assess our portfolio decisions, including investments and divestments, 
against the risks and opportunities associated with climate change and 
the energy transition. These include for example, policy actions such as 
higher regulatory costs linked to carbon emissions and demand changes 
which lower demand for oil and gas. 
   Our approach to assessing and managing the risks and opportunities 
associated with climate change includes considering different time 
horizons. The time horizons and their relevance to risks, opportunities 
and business planning are as follows: 
   -- Short term (up to three years): we develop detailed financial projections 
      and use them to manage performance and expectations on a three-year 
   -- Medium term (generally three to 10 years): most of our expected 
      production and earnings in this period come from our existing assets. 
   -- Long term (generally beyond 10 years): for this period, it is expected 
      that the current Shell portfolio will change and evolve with the energy 
      transition. Decision-making and risk identification on the thematic 
      structure of the future portfolio are guided by the pace of society's 
      progress and the aim of being in step with society as it moves towards 
      the goals of the Paris Agreement. 
   The overall climate change risk consists of four components, based on 
the nature of our exposure and the options for our mitigation responses. 
The four components are regulatory risks, commercial risks, physical 
risks and societal risks. We provide more details about how we manage 
these in our Annual Report. 
   Our portfolio and strategy have been assessed against a wide range of 
outlooks. These include the potential impacts of various possible energy 
transition pathways, and changes in societal expectations around climate 
change. Our latest set of Shell scenarios [R] was one of the many 
variables used in guiding our updated strategy which we announced in 
February 2021. 
   We estimate that a $10 per barrel change in oil prices would have an 
impact of roughly $6 billion per year on our cash flow from operations. 
Of this, $4 billion would come from Upstream and $2 billion from our 
Integrated Gas business. Cash flows from our Growth pillar and Chemicals 
and Products businesses have limited exposure to commodity prices and so 
are not included in this calculation. This is an indicative estimate and 
not a prediction. 
   Based on this assumption, if the oil price sustainably increased by 
around $15 per barrel, as it did in January and February 2021, that 
would be expected to create an additional $9 billion in medium-term cash 
flow per year from operations from our Upstream and Integrated Gas 
businesses. Similarly, a $15 fall in the oil price would be expected to 
result in a $9 billion reduction in cash flow from operations per year 
in the medium term. 
   Shell views carbon pricing as a key policy tool for meeting the 
temperature goal of the Paris Agreement as it helps to increase demand 
for low-carbon energy and creates incentives for investment in 
low-carbon technologies and infrastructure. 
   Shell's annual carbon cost exposure is expected to increase over the 
next decade because of evolving carbon regulations. This expected 
increase is based on forecasts of Shell's equity share of emissions from 
operated and non-operated assets, and real-terms carbon cost estimates 
which range from $5 to $110 per tonne of GHG emissions in 2030. This 
exposure also takes into account the estimated impact of free allowances 
as relevant to assets based on their location. The regulatory carbon 
cost estimate is refreshed on an annual basis as part of the development 
of our business plan. 
   Every year we test our portfolio under different scenarios, including 
prolonged low oil prices. In addition, we rank the break-even prices of 
our assets in the Upstream business to assess their resilience against 
low oil and gas prices. At December 31, 2020, we estimate that around 
75% of our current proved oil and gas reserves will be produced by 2030 
and only around 3% after 2040. We also estimate that around 70% of our 
proved plus probable oil and gas reserves, known as 2P, will be produced 
by 2030, and only 5% after 2040. 
   Disclosure requirements related to climate-related risks and 
opportunities are evolving and may result in more stringent disclosure 
mandates. Several regulatory bodies, including in the EU, the UK and the 
USA, are exploring frameworks and guidance for increased disclosure and 
creating uniform criteria for how economic activities score on 
environmental sustainability. Shell continues to monitor regulatory 
developments in this area, including progress on the EU Taxonomy and the 
adoption of the EU Delegated Acts for the technical screening criteria 
and disclosure methodology. We will develop responses as appropriate. 
   We are implementing the recommendations of the Task Force on 
Climate-related Financial Disclosures (TCFD) in our reporting. We are 
also engaging with others including the investor group Climate Action 
100+ and the Science Based Targets initiative as they develop new 
reporting, accounting and target-setting frameworks for the oil and gas 
industry. The Science Based Targets initiative is a partnership between 
CDP, the United Nations Global Compact, the World Resources Institute 
and the World Wide Fund for Nature. 
   The structure of this report outlining our energy transition strategy is 
based on our continued engagement with Climate Action 100+ and on the 
net-zero disclosure standard developed by that group for the oil and gas 
   The table below shows where to find Shell's disclosures that respond to 
the recommendations by the TCFD in our 2020 reports, publications and 
--------------------------------    ------------------------------------------------------- 
 Disclose the organisation's governance around climate-related risks 
 and opportunities. 
a) Describe the Board's             Annual Report: (pages 96/97) "Our governance 
 oversight of climate-related        of climate change"; (pages 143/144) "Governance 
 risks and opportunities.            -- Safety, Environment and Sustainability 
                                     Committee", and (pages 186/187) "Risk management 
                                     and controls" 
b) Describe management's            Annual Report: (page 96/97) "Our governance 
 role in assessing and               of climate change" 
 managing climate-related 
 risks and opportunities. 
 Disclose the actual and potential impacts of climate-related risks 
 and opportunities on the organisation's businesses, strategy, and financial 
 planning where such information is material. 
a) Describe the climate-related     Annual Report: (pages 18-21) "Strategy and 
 risks and opportunities             outlook", "Powering Progress" 
 the organisation has identified     Annual Report: (page 98) "Climate-related 
 over the short, medium,             risks and opportunities" 
 and long term.                      CDP 2020 Climate Change submission: sections 
                                     Risks and Opportunities 
b) Describe the impact              Annual Report: (pages 98/99) "Impact of climate-related 
 of climate-related risks            risks and opportunities on strategy, planning 
 and opportunities on the            and business" 
 organisation's businesses,          Annual Report: (pages 94/95) introduction 
 strategy, and financial             of "Climate change and energy transition", 
 planning.                           "Shell's absolute emissions and carbon intensity 
                                     targets", "How we plan to deliver", and "Transparency 
                                     and collaboration" 
                                     Annual Report: (page 221) "Climate change 
                                     and energy transition" 
                                     CDP 2020 Climate Change submission: section 
                                     C3 Business Strategy 
c) Describe the resilience          Annual Report: (pages 98/99) "Impact of climate-related 
 of the organisation's               risks and opportunities on strategy, 
 strategy, taking into               planning and business" 
 consideration different             Annual Report: (page 99) "Our climate target" 
 climate-related scenarios,          Corporate webpage: How are Shell scenarios 
 including a 2degC or lower          used? 
 Disclose how the organisation identifies, assesses, and manages climate-related 
a) Describe the organisation's      Annual Report: (page 97) "Climate change risk 
 processes for identifying           management process" 
 and assessing climate-related       Annual Report: (page 101) "Impact of physical 
 risks.                              risks and adaptation measures" 
                                     Sustainability Report: (page 17) "About this 
b) Describe the organisation's      Annual Report: (page 96/97) "Our governance 
 processes for managing              of climate change", 
 climate-related risks.              "Reorganisation in line with updated strategy" 
                                     Annual Report: (page 98) "Climate change risk 
                                     management at project level" 
                                     Annual Report: (pages 101-105) "Our portfolio 
                                     and climate change", 
                                     "Natural gas", "Methane emissions", "Methane 
                                     initiatives and collaborations", 
                                     "Renewables and energy solutions", "Power", 
                                     "Low-carbon fuels", 
                                     "Carbon capture and storage", "Nature-based 
                                     Sustainability Report: (pages 36-60) "Achieving 
                                     net-zero emissions" 
c) Describe how processes           Annual Report: (pages 186/187) "Risk management 
 for identifying, assessing,         and controls" 
 and managing climate-related        Sustainability Report: (page 7/8) "Our approach 
 risks are integrated into           to sustainability" 
 the organisation's overall 
 risk management. 
 Disclose the metrics and targets used to assess and manage relevant 
 climate-related risks and opportunities where such information is material. 
a) Disclose the metrics             Sustainability Report: (page 98-103) "Greenhouse 
 used by the organisation            gas and energy data" 
 to assess climate-related           Annual Report: (page 100) "Our net carbon 
 risks and opportunities             intensity targets"; (page 164/165) 
 in line with its strategy           "Annual Report on Remuneration" 
 and risk management process.        Sustainability Report: (page 13/14) "Executive 
b) Disclose Scope 1, Scope          Corporate webpage: Performance data on Scope 
 2, and, if appropriate,             1, 2, and 3 
 Scope 3 greenhouse gas              Annual Report: (page 29) "Risk Factors" 
 (GHG) emissions, and the 
 related risks. 
c) Describe the targets             Annual Report: (page 99) "Shell's absolute 
 used by the organisation            emissions and carbon intensity targets", 
 to manage climate-related           (page 105-107) "Our performance" 
 risks and opportunities             Annual Report: (page 45) "Performance indicators: 
 and performance against             safety and environment" 
 targets.                            Sustainability Report: (page 10/11) "Performance 
                                     highlights"; (page 36-60) 
                                     "Achieving net-zero emissions"; (page 95/96) 
                                     "Our Powering Progress targets" 
                                     Annual Report: (page 156) "Evolving remuneration 
                                     in line with strategy" 
                                     Corporate webpage: Our climate target: frequently 
                                     asked questions 
   OUR GOAL: Net zero by 2050, in step with society, aligned with Paris 
   -- ALL ENERGY SOLD SCOPES 1, 2 & 3 
   -- Low- and zero-carbon products and solutions to avoid, reduce and mitigate 
      emissions from energy use 
   -- Introducing sector-based businesses accountable for driving 
   -- Reducing Scope 1 & 2 emissions to net zero by 2050 
   -- Operational efficiency: methane intensity target and eliminating routine 
   -- Limit investment in Upstream, maintain investment in Transition, increase 
      investment in Growth 
   -- Build material low-carbon businesses of significant scale by the early 
   -- Carbon budgets to steer business decisions 
   -- Carbon targets tied to staff and executive incentive structures 
   -- The Board and Executive Committee have accountability for energy 
      transition strategy 
   -- Partner with customers to identify and pilot decarbonisation solutions 
   -- Participate in sectoral coalitions to accelerate decarbonisation pathways 
   -- Working with Science Based Target initiative, Climate Action 100+ and 
      Transition Pathways Initiative on industry standards 
   -- Transition Principles developed with other energy companies 
   -- Responsible lobbying 
   -- Disclose climate-related policy positions 
   -- Industry Associations Climate Review 
   -- Support consistency in disclosures including TCFD and WEF standards 
   -- Transparency through Annual Report, Sustainability Report and advisory 
      vote on energy transition strategy and progress 
   The companies in which Royal Dutch Shell plc directly and indirectly 
owns investments are separate legal entities. In this report "Shell", 
"Shell Group" and "Group" are sometimes used for convenience where 
references are made to Royal Dutch Shell plc and its subsidiaries in 
general. Likewise, the words "we", "us" and "our" are also used to refer 
to Royal Dutch Shell plc and its subsidiaries in general or to those who 
work for them. These terms are also used where no useful purpose is 
served by identifying the particular entity or entities. "Subsidiaries", 
"Shell subsidiaries" and "Shell companies" as used in this report refer 
to entities over which Royal Dutch Shell plc either directly or 
indirectly has control. Entities and unincorporated arrangements over 
which Shell has joint control are generally referred to as "joint 
ventures" and "joint operations", respectively. Entities over which 
Shell has significant influence but neither control nor joint control 
are referred to as "associates". The term "Shell interest" is used for 
convenience to indicate the direct and/or indirect ownership interest 
held by Shell in an entity or unincorporated joint arrangement, after 
exclusion of all third-party interest. 
   This report contains certain following forward-looking Non-GAAP measures 
such as adjusted earnings. We are unable to provide a reconciliation of 
these forward-looking Non-GAAP measures to the most comparable GAAP 
financial measures because certain information needed to reconcile those 
Non-GAAP measures to the most comparable GAAP financial measures is 
dependent on future events some of which are outside the control of the 
company, such as oil and gas prices, interest rates and exchange rates. 
Moreover, estimating such GAAP measures with the required precision 
necessary to provide a meaningful reconciliation is extremely difficult 
and could not be accomplished without unreasonable effort. Non-GAAP 
measures in respect of future periods which cannot be reconciled to the 
most comparable GAAP financial measure are calculated in a manner which 
is consistent with the accounting policies applied in Royal Dutch Shell 
plc's consolidated financial statements. 
   As used in this report, "Accountable" is intended to mean: required or 
expected to justify actions or decisions. The Accountable person does 
not necessarily implement the action or decision (implementation is 
usually carried out by the person who is Responsible) but must organise 
the implementation and verify that the action has been carried out as 
required. This includes obtaining requisite assurance from Shell 
companies that the framework is operating effectively. "Responsible" is 
intended to mean: required or expected to implement actions or 
decisions. Each Shell company and Shell-operated venture is responsible 
for its operational performance and compliance with the Shell General 
Business Principles, Code of Conduct, Statement on Risk Management and 
Risk Manual, and Standards and Manuals. This includes responsibility for 
the operationalisation and implementation of Shell Group strategies and 
   This report contains forward-looking statements (within the meaning of 
the U.S. Private Securities Litigation Reform Act of 1995) concerning 
the financial condition, results of operations and businesses of Shell. 
All statements other than statements of historical fact are, or may be 
deemed to be, forward-looking statements. Forward-looking statements are 
statements of future expectations that are based on management's current 
expectations and assumptions and involve known and unknown risks and 
uncertainties that could cause actual results, performance or events to 
differ materially from those expressed or implied in these statements. 
Forward-looking statements include, among other things, statements 
concerning the potential exposure of Shell to market risks and 
statements expressing management's expectations, beliefs, estimates, 
forecasts, projections and assumptions. These forward-looking statements 
are identified by their use of terms and phrases such as "aim", 
"ambition", "anticipate", "believe", "could", "estimate", "expect", 
"goals", "intend", "may", "milestones", "objectives", "outlook", "plan", 
"probably", "project", "risks", "schedule", "seek", "should", "target", 
"will" and similar terms and phrases. There are a number of factors that 
could affect the future operations of Shell and could cause those 
results to differ materially from those expressed in the forward-looking 
statements included in this report, including (without limitation): (a) 
price fluctuations in crude oil and natural gas; (b) changes in demand 
for Shell's products; (c) currency fluctuations; (d) drilling and 
production results; (e) reserves estimates; (f) loss of market share and 
industry competition; (g) environmental and physical risks; (h) risks 
associated with the identification of suitable potential acquisition 
properties and targets, and successful negotiation and completion of 
such transactions; (i) the risk of doing business in developing 
countries and countries subject to international sanctions; (j) 
legislative, fiscal and regulatory developments including regulatory 
measures addressing climate change; (k) economic and financial market 
conditions in various countries and regions; (l) political risks, 
including the risks of expropriation and renegotiation of the terms of 
contracts with governmental entities, delays or advancements in the 
approval of projects and delays in the reimbursement for shared costs; 
(m) risks associated with the impact of pandemics, such as the COVID-19 
(coronavirus) outbreak; and (n) changes in trading conditions. No 
assurance is provided that future dividend payments will match or exceed 
previous dividend payments. All forward-looking statements contained in 
this report are expressly qualified in their entirety by the cautionary 
statements contained or referred to in this section. Readers should not 
place undue reliance on forward-looking statements. Additional risk 
factors that may affect future results are contained in Royal Dutch 
Shell plc's Form 20-F for the year ended December 31, 2020 (available at and These risk factors also 
expressly qualify all forward-looking statements contained in this 
report and should be considered by the reader. Each forward-looking 
statement speaks only as of the date of this report, April 15, 2021. 
Neither Royal Dutch Shell plc nor any of its subsidiaries undertake any 
obligation to publicly update or revise any forward-looking statement as 
a result of new information, future events or other information. In 
light of these risks, results could differ materially from those stated, 
implied or inferred from the forward-looking statements contained in 
this report. 
   Past performance cannot be relied on as a guide to future performance. 
The content of websites referred to in this report do not form part of 
this report and are provided only for the convenience of the reader. 
   Linda M. Coulter 
   Company Secretary 
   Shell Media Relations 
   International: +44 20 7934 5550 Americas: +1 713 241 4544 
   LEI number of Royal Dutch Shell plc: 21380068P1DRHMJ8KU70 
   Classification: Additional regulated information required to be 
disclosed under the laws of a Member State. 

(END) Dow Jones Newswires

April 15, 2021 02:00 ET (06:00 GMT)

Copyright (c) 2021 Dow Jones & Company, Inc.

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