Climate Change Data

Environmental Metrics

ESG Focus Areas

• Economic performance
• Environmental performance
• Social performance

Environmental Achievements

• 2002 greenhouse gas emissions reduction target met
• Phase out of continuous gas venting nearly completed
• Improved spills performance

Social Achievements

• Highest overall reputation within the energy sector
• Increasing involvement in international public-private partnerships
• More staff feel respected by Shell
• Progress towards senior leadership gender target

Governance Achievements

• Shell’s Business Principles assurance process ensures we meet and maintain those standards

Climate Goals & Targets

Environmental Challenges

• Mixed performance on safety
• Loss of life (53 Shell employees and contractors)
• Security incidents in 13 countries
• Security incidents at operations in the Niger Delta
• External criticism and protests
• Local community protests about the environmental performance of the SAPREF refinery in South Africa
• Tough market conditions and product oversupply

Mitigation Strategies

• Significant efforts continue to protect Shell people and assets against potential threats, including terrorism
• Plans were progressed with local authorities to clean up two sites contaminated with pesticides from previous operations – Paulinia and Ipiranga in Brazil
• Commissioned $49 million worth of plant to reduce environmental impacts at SAPREF refinery
• Improved data quality in Nigeria
• Further upgrading of pipeline systems and continued engagement with communities to reduce spills from sabotage
• Increased efforts to commercialise fuels from crops (bio-fuels)
• Investing in hydrogen fuel cell development

Supply Chain Management

Responsible Procurement

• Promoting the application of Shell's Business Principles among contractors and suppliers
• Screening contractors and suppliers for compliance with Business Principles and child labor laws

Climate-Related Risks & Opportunities

Opportunities

• Development of energy-efficient products
• Growth of natural gas and renewable energy businesses

Reporting Standards

Frameworks Used: GRI

Certifications: ISO 14001

Third-party Assurance: KPMG and PricewaterhouseCoopers LLP

Sustainable Products & Innovation

• Cleaner transport fuels
• Rural solar power systems
• Gas to Liquids technology

Awards & Recognition

• Top ranking in energy sector in Dow Jones Sustainability Index
• Partnerships Award for Malampaya Deepwater Gas-to-Power project

Environmental Metrics

ESG Focus Areas

• Climate Change
• Energy Security
• Responsible Energy
• Biodiversity
• Air Pollution
• Spills
• Human Rights
• Safety
• Local Development
• Governance
• Business Integrity

Environmental Achievements

• Reduced GHG emissions from operations by more than 20% below 1990 levels.
• Reduced VOC emissions from operations by more than 50% since 1998.
• Reduced SO2 emissions at refineries and chemical plants by almost 10% since 2001.
• Improved refinery energy efficiency by 3% since 2002.
• Improved chemical plant energy efficiency by 9% since 2001.

Social Achievements

• Launched a company-wide Code of Conduct.
• Increased focus on sustainable development in early stages of new upstream projects.
• Implemented standardized social performance plans at all major facilities with nearby communities.
• Improved injury rate for staff and contractors by approximately 45% since 1997.
• Increased proportion of women in top positions to 11.6% (up from 9.9% in 2005).

Governance Achievements

• Introduced a global help line and website for reporting concerns about violations of the Code of Conduct.
• Strengthened the Global Antitrust Compliance Programme.
• Expanded the role of the External Review Committee in assessing the report.

Climate Goals & Targets

Environmental Challenges

• Rising GHG emissions from changing portfolio and increased energy intensity.
• Security situation in Nigeria impacting operations and safety.
• Difficulties in meeting environmental improvement targets at Geelong refinery.
• Concerns about safety and environmental performance at Corrib gas project.
• High fatalities, particularly in Nigeria due to violence.

Mitigation Strategies

• Launched a new energy efficiency program in upstream business.
• Continued efforts to end continuous flaring.
• Implemented improved pipeline inspection and maintenance.
• Worked with communities and regulators to address concerns at Geelong refinery and Corrib gas project.
• Expanded regional network of security advisors to protect staff and contractors.
• Implemented Hearts and Minds program to improve safety culture.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Promoting use of local suppliers and contractors.
• Training local companies to meet Shell standards.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather (hurricanes)

Transition Risks

• Government policies on GHG emissions
• Market shifts towards renewable energy

Opportunities

• Development of energy-efficient products and technologies
• CO2 capture and storage

Reporting Standards

Frameworks Used: Global Reporting Initiative (GRI)

Certifications: ISO 14001

Third-party Assurance: KPMG (for Nigeria HSE and social investment data)

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Gas-to-liquids (GTL) fuel
• Low-sulphur transport fuels
• Biofuels

Awards & Recognition

• Included in Carbon Disclosure Project’s Climate Leadership Index since 2001.

Environmental Metrics

ESG Focus Areas

• Climate Change
• Energy Security
• Sustainable Development
• Safety
• Community Relations
• Human Rights
• Biodiversity
• Water Use
• Oil Spills
• Local Development
• Business Integrity

Environmental Achievements

• Reduced GHG emissions by nearly 25% compared to 1990.
• Reduced total upstream flaring by nearly 60% since 2001.
• Improved refinery energy efficiency by almost 2% since 2002.
• Improved chemical plants energy efficiency by almost 9% compared to 2001.
• Reduced fresh water use by 17% compared to 2000.

Social Achievements

• Improved safety performance, with the lowest ever injury rate in 2007.
• Launched Global Memoranda of Understanding (GMOUs) with communities for development plans.
• Increased expenditure on goods and services from locally owned companies to approximately $17 billion.
• Continued work on HIV/AIDS prevention and management programs in Nigeria.
• Improved community relations at Geelong Refinery and Motiva Port Arthur Refinery.

Governance Achievements

• Introduced new, simpler safety policies.
• Strengthened security standards to include the Voluntary Principles on Security and Human Rights.
• Implemented a global helpline for reporting concerns about infringements of the law or Business Principles.
• Provided training on bribery and corruption, and compliance with competition laws.

Climate Goals & Targets

Environmental Challenges

• Difficult security situation in Nigeria, leading to production shutdowns and delays in eliminating gas flaring.
• Funding challenges in the SPDC joint venture in Nigeria.
• Rising energy intensity in upstream operations due to aging fields and development of difficult-to-reach deposits.
• Continued need to reduce GHG emissions and improve energy efficiency.

Mitigation Strategies

• Discussions with government and others about security in Nigeria.
• Efforts to improve the effectiveness of community development programs in Nigeria.
• Launched a major program in Exploration & Production to improve energy efficiency at major assets.
• Implementing a three-year capital investment program for energy efficiency across refineries and chemical plants.

Supply Chain Management

Responsible Procurement

• Active promotion of local suppliers and contractors.
• Training programs for local companies.
• Requirements for contractors to respect human rights and comply with HSE standards.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products
• Development of low-CO2 biofuels
• CO2 capture and storage technology

Reporting Standards

Frameworks Used: GRI G3

Certifications: ISO 14001

Third-party Assurance: External Review Committee

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 8 (Decent Work and Economic Growth)
• Goal 13 (Climate Action)

Contributions through energy production, job creation, community development, and efforts to mitigate climate change.

Sustainable Products & Innovation

• Shell WAM Foam Solution for road construction
• Shell Instapave Solution for roads in developing countries
• Advanced lubricants for improved fuel efficiency
• Biodegradable industrial lubricants
• Ingredients for washing powders that work at lower temperatures

Environmental Metrics

ESG Focus Areas

• Climate Change
• Safety
• Environmental Impact
• Social Responsibility
• Governance

Environmental Achievements

• Reduced GHG emissions from facilities by nearly 30% compared to 1990 levels
• Reduced total upstream flaring by more than 70% since 2001
• Launched Shell Tellus ® EE lubricant, increasing hydraulic equipment energy efficiency by up to 8%
• Launched Shell Floraphalte, an asphalt binder made almost entirely from plant-based ingredients, reducing energy use during mixing

Social Achievements

• Injury rate decreased by approximately 50% since 1999
• Supported local and national road safety programs (e.g., Brunei's "Tell A Friend" campaign)
• Spent approximately $148 million on social investment, mostly on community development activities
• Implemented process safety standards across Shell and completed a three-year review of upstream facilities

Governance Achievements

• Implemented a company-wide road safety program
• Completed a three-year review of facilities in the upstream business, closing out all high-risk findings
• 204 violations of the Code of Conduct were reported, resulting in the termination of relationships with 138 staff and contractors

Climate Goals & Targets

Environmental Challenges

• Economic recession impacting investment in new energy projects
• Ongoing government funding and security problems in Nigeria hindering progress to end continuous flaring
• Increased upstream energy intensity due to aging fields and production of heavy oil
• Increased spill volumes from sabotage in Nigeria

Mitigation Strategies

• Intensified drive to reduce costs while continuing to invest in major projects
• Implementing five-year energy management plans across upstream operations
• Implementing operational improvement programs to reduce flaring
• Clear procedures and consistent compliance to reduce spills from controllable reasons

Supply Chain Management

Responsible Procurement

• Sustainable sourcing safeguards with biofuel suppliers

Climate-Related Risks & Opportunities

Sustainable Products & Innovation

• Shell Tellus ® EE lubricant
• Shell Floraphalte asphalt binder
• Shell Thiocrete TM concrete

Environmental Metrics

ESG Focus Areas

• Climate Change
• Safety
• Joint Ventures, Contractors and Suppliers
• Community Relations
• Nigeria
• Energy Efficiency
• Water Management
• Biofuels
• Spills
• Biodiversity
• Recycling
• Human Rights
• Revenue Transparency

Environmental Achievements

• Direct greenhouse gas emissions from facilities we operate were 67 million tonnes on a CO2-equivalent basis in 2009, 11% lower than in 2008 and around 35% below the 1990 level.
• Operational spills totalled 1,300 tonnes, the lowest amount ever recorded.
• Water use reduced to around 198 million cubic meters from 224 million cubic meters in 2008.
• Shell warm asphalt mixture (WAM) foam technology™ reduced energy use and CO2 produced by around 30%.

Social Achievements

• Lowest-ever injury rate in 2009, down 22% on the year before.
• Launched mandatory 12 life-saving rules to reinforce drive towards zero fatalities and injuries.
• Spent $132 million on social investment, mostly on community development projects.
• Reached a settlement with the families of Ogoni activist Ken Saro-Wiwa and eight others.

Governance Achievements

• Embedded sustainable development firmly in businesses, making safety, environmental and social performance closer to the core of business plans and decisions.
• Launched HSS&E & SP control framework clarifying requirements for operations and community engagement.
• 165 violations of the code of conduct were reported (204 in 2008), resulting in the termination of relationships with 126 staff and contractors (138 in 2008).

Climate Goals & Targets

Environmental Challenges

• Reduced earnings for the year due to business challenges.
• Security situation in Nigeria continued to be difficult, with sabotage being the largest cause of spills.
• Economic downturn forced refineries to run below full capacity, impacting energy efficiency.
• Meeting the world's growing energy needs while reducing the carbon intensity of products and operations.

Mitigation Strategies

• Reduced underlying costs by more than $2 billion in 2009 and identified further savings of $1 billion in 2010.
• Implemented long-term energy management programs to improve energy efficiency.
• Continued work to develop technology to capture CO2 and store it underground.
• Investing in cleaner-burning natural gas, low-carbon biofuels, and CO2 capture, transport and storage technologies.
• Improving energy efficiency of operations and reducing flaring of natural gas.
• Strengthened spill response team to improve ability to cope with spills.
• Working with governments to develop regulatory frameworks to establish a price for CO2.

Supply Chain Management

Supplier Audits: 32 audits in 2009

Responsible Procurement

• Requirements for major contracts to follow business principles, code of conduct, and HSSE standards.
• Hiring and buying locally to support development.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Development of energy-efficient products and services, natural gas as a bridging fuel.

Reporting Standards

Frameworks Used: GRI, IPIECA Guidelines

Certifications: Null

Third-party Assurance: Lloyd's Register Quality Assurance Ltd (limited assurance on direct greenhouse gas emissions data)

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Shell FuelSave, Shell warm asphalt mixture (WAM) foam technology™, Shell Thiocrete™, Shell Thiopave™

Awards & Recognition

• Award from the Argentina branch of the American Chamber of Commerce for Creating Bonds program.

Environmental Metrics

ESG Focus Areas

• Safety
• Environment
• Communities
• Human Rights
• Climate Change
• Energy Efficiency
• Biofuels
• Carbon Capture and Storage
• Sustainable Development

Environmental Achievements

• Improved energy efficiency in refineries and chemical plants
• Reduced operational spills (though sabotage and theft in Nigeria remained a significant issue)
• Met voluntary target for direct GHG emissions (5% lower than 1990 levels)

Social Achievements

• Achieved best ever safety performance (lowest injury rates)
• Increased social investment in lower-income countries
• Implemented new company-wide standards for social performance
• Increased local procurement in lower-income countries

Governance Achievements

• Signed up to the UN Global Compact LEAD
• Improved requirements on anti-bribery and corruption
• Implemented mandatory global requirements for managing social performance

Climate Goals & Targets

Environmental Challenges

• Increased greenhouse gas emissions due to increased production
• Increased flaring of natural gas (particularly in Nigeria and Iraq)
• Sabotage and theft of oil in Nigeria
• Security challenges in Nigeria and Iraq
• Water scarcity in some operating areas
• Sustainability challenges related to biofuels production
• Road safety incidents

Mitigation Strategies

• Investing in energy efficiency improvements
• Developing carbon capture and storage technology
• Investing in gas gathering equipment to reduce flaring
• Implementing improved requirements on anti-bribery and corruption
• Implementing water management plans
• Introducing sustainability clauses into supplier contracts for biofuels
• Implementing in-vehicle monitoring systems and Life-Saving Rules to improve driver safety

Supply Chain Management

Supplier Audits: 34 independent assessments of suppliers in China, India, and Taiwan

Responsible Procurement

• Compliance with Shell General Business Principles, Code of Conduct, and HSSE standards; sustainability clauses in supplier contracts

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Development of energy-efficient products and services; growth in natural gas, biofuels, and CCS

Reporting Standards

Frameworks Used: GRI, IPIECA

Certifications: ISO 14001

Third-party Assurance: Lloyd’s Register Quality Assurance Ltd (limited assurance on GHG emissions)

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Shell FuelSave; Shell Helix Ultra; NEOFLOTM drilling fluids; EcoboxTM motor oil packaging; Shell CaradolTM polyol; Shell ThiopaveTM asphalt; Shell ThiogroTM fertilizer

Awards & Recognition

• Walmart named Shell Lubricants supplier of the year for sustainability (2010)

Environmental Metrics

ESG Focus Areas

• Safety
• Communities
• Climate Change
• Environment
• Human Rights
• Sustainable Development
• Energy Efficiency
• Biofuels
• Carbon Capture and Storage (CCS)
• Natural Gas
• Oil Sands
• Deep Water Operations
• Arctic Operations
• Nigeria Operations
• Supply Chain Management
• Revenue Transparency

Environmental Achievements

• Decreased direct greenhouse gas emissions by around 3% from 2010 to 74 million tonnes CO2 equivalent.
• Reduced flaring in Nigeria by almost 20% despite increased oil production.
• Improved energy efficiency at refineries compared to 2010.
• Recycled around 78% of water used in bitumen extraction at oil sands operations.
• Reduced the area covered by tailings ponds at oil sands operations.

Social Achievements

• Maintained lowest-ever level of injuries per million working hours.
• Maintained lowest-ever level of lost-time injuries.
• Spent around $125 million on voluntary social investments worldwide.
• Increased social investment in countries with GDP less than $15,000 per person.
• Improved road safety performance with a 41% reduction in incidents from 2010.
• Launched a new website to track SPDC's handling of oil spills in Nigeria.
• Implemented a new social performance handbook and trained 220 specialists.

Governance Achievements

• Continued to support the UN Global Compact and its principles.
• Increased proportion of women in senior leadership positions to 16.6%.
• Implemented Shell Supplier Principles to promote responsible practices among suppliers.
• Conducted 33 rigorous assessments of suppliers in Africa and the Middle East, 120 in the Americas, 268 in Asia-Pacific and 43 in Europe.

Climate Goals & Targets

Environmental Challenges

• Continued economic turbulence.
• Momentous social change in some countries.
• Global challenges of population growth, rising energy demand, and climate change.
• Tensions over fresh-water supplies and food prices.
• Challenges in the progress of CCS due to community opposition and lack of government funding.
• Environmental concerns related to tight and shale gas production (air emissions, water use, contamination).
• Security challenges and oil theft in Nigeria.
• Environmental impacts of oil sands development (energy and water intensity, land disturbance).
• Sustainability challenges in biofuels production (land use change, competition with food crops, labor rights).

Mitigation Strategies

• Investing in cleaner-burning natural gas.
• Developing carbon capture and storage technologies.
• Producing low-carbon biofuel (ethanol from sugar cane in Brazil).
• Improving energy efficiency in operations.
• Implementing global onshore operating principles for tight gas development.
• Working with communities, governments, and NGOs to address concerns.
• Investing in oil spill response capabilities.
• Implementing water management plans in water-scarce areas.
• Conducting biodiversity assessments and developing action plans.
• Collaborating with environmental organizations.
• Developing and implementing Shell Supplier Principles.
• Supporting international certification schemes for biofuels.
• Developing advanced biofuels from non-food sources.

Supply Chain Management

Supplier Audits: 33 audits in Africa and the Middle East, 120 in the Americas, 268 in Asia-Pacific, and 43 in Europe in 2011.

Responsible Procurement

• Shell Supplier Principles (business integrity, HSSE & SP, labor and human rights)

Climate-Related Risks & Opportunities

Opportunities

• Development of energy-efficient products and services
• Growth in natural gas and low-carbon biofuels

Reporting Standards

Frameworks Used: GRI, Oil and gas industry guidelines (IPIECA/API/OGP)

Third-party Assurance: Lloyd’s Register Quality Assurance Ltd (limited assurance on GHG emissions)

Sustainable Products & Innovation

• Shell FuelSave petrol and diesel
• Alexia S4 marine lubricant
• Shell Thiogro TM fertilizer
• Shell Thiopave TM road surfacing material

Environmental Metrics

ESG Focus Areas

• Safety
• Communities
• Environment
• Climate Change
• Sustainable Development
• Human Rights
• Energy Efficiency
• Carbon Capture and Storage (CCS)
• Biofuels
• Natural Gas
• Oil Sands
• Deep Water
• Arctic Exploration
• Nigeria Operations
• Supply Chain Management
• Governance

Environmental Achievements

• Reduced direct greenhouse gas emissions to 72 million tonnes CO2 equivalent from 74 million tonnes in 2011.
• Reduced flaring in Nigeria by approximately 25% compared to 2011.
• Reduced operational spills of oil and oil products to 2.1 thousand tonnes from 6.0 thousand tonnes in 2011.
• Decreased fresh water usage to 203 million cubic meters from 209 million cubic meters in 2011.

Social Achievements

• Maintained low injury rates.
• Invested around $149 million in voluntary social investments worldwide.
• Spent around $14 billion on goods and services from companies in countries with lower incomes.
• Conducted 500+ assessments of suppliers on compliance with sustainability criteria.
• Created new opportunities for communities and local companies in several countries.

Governance Achievements

• Continued implementation of HSSE & SP Control Framework.
• Published details of payments made to governments.
• Supported a mandatory global reporting rule for extractive industries.
• Maintained 20% of company scorecard for sustainable development, influencing employee bonuses.

Climate Goals & Targets

Environmental Challenges

• Oil theft and illegal refining in the Niger Delta, Nigeria.
• Operational setbacks in Alaska's Arctic exploration program.
• Concerns about the environmental and social impacts of tight gas production (fracking).
• Managing CO2 emissions from oil sands operations.
• Water scarcity in some operating areas.
• Aging infrastructure in Iraq's oil and gas industry.
• Lack of reliable power in Iraq.
• Competition for access to energy resources.
• Increasing environmental and social pressures.

Mitigation Strategies

• Implementing measures to make it more difficult for thieves to steal oil from pipelines.
• Working closely with regulators and communities in Alaska.
• Adopting five global operating principles for onshore tight oil and gas activities.
• Investing in the Quest CCS project in Canada to reduce CO2 emissions from oil sands.
• Developing water management plans and increasing water recycling.
• Investing in infrastructure upgrades and improving equipment in Iraq.
• Developing local skills and enterprises in Iraq.
• Implementing stringent safety and environmental standards.
• Engaging with communities and stakeholders.

Supply Chain Management

Supplier Audits: 500+ assessments conducted in 2012

Responsible Procurement

• Supplier Principles: mandatory requirements for all suppliers and contractors.
• Sustainability clauses in contracts for biofuels.
• Support for local businesses and job creation.

Climate-Related Risks & Opportunities

Opportunities

• Development of energy-efficient products and services.
• Growth of renewable energy sources.

Reporting Standards

Frameworks Used: GRI, IPIECA/API/OGP guidelines

Third-party Assurance: Lloyd’s Register Quality Assurance Ltd (limited assurance on GHG emissions)

Sustainable Products & Innovation

• Shell FuelSave fuels and lubricants.
• Low-carbon biofuels.
• LNG as a transport fuel.

Environmental Metrics

ESG Focus Areas

• Safety
• Communities
• Environment
• Climate Change
• Natural Gas
• Carbon Capture and Storage
• Biofuels
• Energy Efficiency

Environmental Achievements

• Implementation of the Quest CCS facility in Canada to reduce CO2 emissions from oil sands operations (expected to capture over 1 million tonnes of CO2 per year)
• Reduction in flaring in operations
• Improved energy efficiency in oil and gas production, refineries, and chemical plants
• Recycling and reuse of materials from decommissioned oil platforms

Social Achievements

• Spent almost $159 million on community investment projects worldwide focusing on enterprise development, road safety, and access to energy
• Improved community feedback mechanisms, reducing complaints in the Appalachia region
• Strengthened approach to social performance with consistent global standards
• Introduced a new measurement framework to evaluate the impact of community investment activities

Governance Achievements

• Three-year review program of engineering design standards to better manage safety risks completed
• $6 billion program (2006-2013) to improve safety of oil and gas production facilities
• $750 million invested in safety and reliability of refineries, chemical plants, and distribution facilities in 2013

Climate Goals & Targets

Environmental Challenges

• Growing global demand for energy
• Competition for access to energy resources and new customer markets
• Challenges in operating in water-scarce areas
• Concerns about the impacts of hydraulic fracturing on emissions and local water resources
• Crude oil theft and sabotage of pipelines in Nigeria
• Operating in high-risk environments like Alaska

Mitigation Strategies

• Developing a portfolio that balances short- and long-term interests
• Integrating economic, social, and environmental considerations into business decisions
• Establishing a global center of expertise for water management
• Developing and adopting five operating principles for onshore tight gas and oil activities
• Initiatives to tackle crude oil theft in Nigeria (increased pipeline surveillance, repair crews, collaboration with communities)
• Robust oil-spill response plans and subsea capping and containment systems for Alaska operations
• Suspension of exploration program in Alaska in 2014 due to legal obstacles

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Shell FuelSave Diesel and Shell FuelSave Unleaded petrol, GTL fuels, low-carbon biofuels

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Arctic
• Biofuels
• Climate Change
• Contractors, Suppliers and JVs
• Corporate Governance
• Deep Water
• Environment
• Gas
• Human Rights
• Iraq
• Nigeria
• Partners and Collaboration
• Safety
• Social Performance
• Sustainability in Shell
• Technology and Innovation
• Tight Gas

Environmental Achievements

• Achieved lowest ever number of injuries per million working hours
• Achieved lowest ever level of injuries that led to time off work
• Improved fatal accident rate
• Achieved best ever performance for operational process safety events
• Lowest level of recorded operational spills
• Improved energy intensity for oil and gas production
• Improved energy intensity for manufacturing of oil products at refineries
• Reduced hydrocarbons discharged to surface water

Social Achievements

• Increased number of locations with effectively run community feedback mechanisms
• Improved in defining social risks by developing and using specific tools
• Spent around $160 million on voluntary social investments worldwide
• Spent around $39 million on three global strategic themes of enterprise development, road safety and energy access
• Conducted 1074 assessments of suppliers against Shell Supplier Principles
• Improved proportion of women in senior leadership positions

Governance Achievements

• Improved reporting and transparency
• More clearly identified the most material issues relating to Shell and its sustainability performance
• Sustainable development accounted for 20% of the company scorecard

Climate Goals & Targets

Environmental Challenges

• Falling oil price and geopolitical instability
• Climate change
• Need to reduce global carbon dioxide emissions
• Increasing energy demand
• Water scarcity
• Crude oil theft and sabotage in Nigeria
• Flaring of natural gas
• Methane emissions
• Induced earthquakes in Groningen gas field
• Concerns about drilling in the Arctic

Mitigation Strategies

• Long-term view of business
• Investing in renewables and improvements in energy efficiency
• Developing advanced biofuels and future technologies
• Advocating for effective carbon pricing
• Reducing flaring and fugitive methane emissions
• Implementing water management plans
• Strengthening security measures in Nigeria
• Working on projects to reduce flaring
• Implementing technologies that prevent methane emissions
• Conducting studies to better understand induced earthquakes
• Extensive local community engagement in the Arctic
• Contingency planning for oil spills in the Arctic

Supply Chain Management

Supplier Audits: 1073 supplier and contractor assessments

Responsible Procurement

• Shell Supplier Principles

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather
• Melting sea ice

Transition Risks

• Government policies to reduce CO2 emissions
• Carbon pricing

Opportunities

• Development of lower-carbon technologies
• Renewable energy

Reporting Standards

Frameworks Used: GRI 3.1, IPIECA/API/IOGP guidelines

Certifications: ISO 14001

Third-party Assurance: Lloyd’s Register Quality Assurance Ltd (limited assurance on GHG emissions)

Sustainable Products & Innovation

• Shell FuelSave fuels; Shell Helix Ultra motor oil; natural gas-based fluids and solvents

Environmental Metrics

ESG Focus Areas

• Energy Transition
• Climate Change
• Safety
• Environment
• Community Engagement
• Human Rights
• Business Ethics
• Transparency
• Corporate Governance

Environmental Achievements

• Reduced operational spills by approximately 30%
• Reduced total greenhouse gas emissions
• Started Quest carbon capture and storage (CCS) project in Alberta, Canada, capturing up to 1 million tonnes of CO2 a year

Social Achievements

• Improved safety performance in many areas
• Strengthened community feedback mechanisms
• Invested in scholarships and education programs in Nigeria
• Supported community health initiatives in Nigeria

Governance Achievements

• Improved safety standards and requirements across Shell
• Strengthened safety culture and leadership
• Refreshed Code of Conduct

Climate Goals & Targets

Environmental Challenges

• Low oil price impacting long-term investments
• Seven fatalities at operations in Nigeria (primarily due to crude oil theft)
• Crude oil theft and sabotage in Nigeria
• Unpredictable federal regulatory environment in Alaska
• Concerns about hydraulic fracturing (water use, chemical release, methane emissions, noise, traffic, induced seismicity)
• Methane emissions from oil and gas production
• Flaring of natural gas
• Water use in oil sands operations
• Tailings management in oil sands operations
• Community concerns regarding operations in various regions

Mitigation Strategies

• Making tough choices about long-term investments due to low oil prices
• Investing in safety improvement programs and simplifying contracts
• Implementing measures to reduce operational flaring
• Working with the World Bank to find solutions to host-government funding for flaring reduction projects
• Ending offshore exploration drilling in Alaska for the foreseeable future
• Developing and publicly sharing global principles governing onshore tight or shale gas and oil activities
• Implementing technologies to reduce environmental impact of tight gas and oil activities
• Collaborating with the Center for Sustainable Shale Development (CSSD)
• Deploying advanced leak detection and repair technology for methane emissions
• Improving efficiency in water and energy use in oil sands operations
• Investing in technologies to speed up the drying process for fluid fine tailings
• Working closely with indigenous communities
• Implementing community feedback mechanisms
• Community-based pipeline surveillance, education, and alternative livelihood programs in Nigeria
• Implementing the UNEP report recommendations in Ogoniland

Supply Chain Management

Supplier Audits: 384 suppliers assessed for compliance with Shell Supplier Principles in 2015

Responsible Procurement

• Shell Supplier Principles covering business integrity, health and safety, social performance, and labor and human rights

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather conditions

Transition Risks

• Government imposed carbon pricing or legislation
• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products
• Investment in lower-carbon technologies

Reporting Standards

Frameworks Used: GRI G4, IPIECA guidelines, American Petroleum Institute guidance, International Association of Oil and Gas Producers guidance, UN Global Compact

Third-party Assurance: Lloyd’s Register Quality Assurance Ltd (limited assurance on GHG emissions)

Sustainable Products & Innovation

• Shell FuelSave Diesel
• Shell GTL Fuel
• Advanced biofuels
• Hydrogen-based fuels

Awards & Recognition

• Shell CEO’s HSSE & SP award
• Global Gas Flaring Reduction Partnership Excellence Award

Environmental Metrics

ESG Focus Areas

• Climate Change

Environmental Achievements

• Shell share of CO2 sequestered by the Quest carbon capture and storage project was included in the Net Carbon Footprint calculation.

Climate Goals & Targets

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Climate change and energy transition
• Business ethics
• Transparency
• Corporate governance
• Safety
• Environmental protection
• Human rights
• Social contribution

Environmental Achievements

• Reduced the volume of operational spills of oil and oil products to 0.2 thousand tonnes in 2019, a significant decrease from 0.9 thousand tonnes in 2018.
• Reduced upstream flaring to 5.9 million tonnes of CO2 equivalent in 2019 from 5.2 million tonnes in 2018 (increase attributed to Prelude LNG facility startup).
• Achieved Upstream and Integrated Gas GHG intensity of 0.168 tonnes CO2 equivalent per tonne of hydrocarbon production available for sale.
• Became a founding member of the Alliance to End Plastic Waste.
• Aim to use 1 million tonnes of plastic waste as a raw material in chemical plants by 2025.

Social Achievements

• Launched an online portal to promote open conversations about mental health.
• Improved community feedback mechanisms, reducing complaint resolution time.
• Supported 1,392 jobs created through Shell LiveWIRE.
• Returned 0.2 square kilometers of land to the Aamjiwnaang First Nation in Canada.
• #DriveSafeIndia Eye Camps campaign provided free eye tests and spectacles to truck drivers in India.

Governance Achievements

• Safety, Environment and Sustainability Committee (SESCo) updated its terms of reference.
• Linked 20% of Shell’s Executive Scorecard to sustainable development (10% safety, 10% environmental performance).
• Incorporated energy transition condition into the performance share awards for around 16,500 employees globally from 2020.

Climate Goals & Targets

Environmental Challenges

• Seven fatalities among Shell employees and contractors in 2019.
• Increase in operational process safety events from 121 in 2018 to 130 in 2019.
• Sabotage and oil theft remained a significant cause of spills in Nigeria.
• Climate change and the need to accelerate the energy transition.

Mitigation Strategies

• Building on current safety approach with a more consistent focus on the interaction of people, culture, equipment, work systems, and processes.
• Implementing improvement plans at priority community feedback mechanism (CFM) sites.
• Implementing ongoing work programme to appraise, maintain, and replace key sections of pipelines and flow lines in Nigeria.
• Investing in lower-carbon products (natural gas, biofuels, hydrogen, renewable power), carbon capture and storage, and nature-based solutions.
• Setting shorter-term Net Carbon Footprint targets and linking them to executive remuneration.

Supply Chain Management

Responsible Procurement

• Shell General Business Principles
• Shell Supplier Principles
• Collaboration with BP, Equinor, and Total on human rights assessments.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of low-carbon energy products and services
• Investments in renewable energy and carbon capture and storage.

Reporting Standards

Frameworks Used: GRI Standards: Core option, IPIECA guidelines, TCFD recommendations

Third-party Assurance: Lloyd’s Register Quality Assurance Ltd (limited assurance for GHG emissions and Net Carbon Footprint)

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 8 (Decent work and economic growth)
• Goal 13 (Climate action)

Investments in energy access solutions, job creation, skills development, and climate action initiatives.

Sustainable Products & Innovation

• Shell GTL fuel
• LNG as marine fuel
• Biofuels
• Renewable electricity
• Hydrogen
• Sustainable aviation fuel

Environmental Metrics

ESG Focus Areas

• Climate Change
• Energy Transition
• Just Transition
• Stakeholder Engagement

Environmental Achievements

• Reduced carbon intensity by 4% from 2019 and 5% from 2016 baseline (2020)
• Quest CCS project in Canada captured and stored more than 5.5 million tonnes of CO2 since 2015
• Final investment decision on Northern Lights CCS project in Norway

Social Achievements

• Launched Joint Capability Council (JCC) in Singapore to help staff acquire new skills
• UpSkill ShellSG initiative for all staff in Singapore providing training in various subjects
• Shell LiveWIRE supported 19,319 people and 1,017 businesses in 2020, creating 1,805 jobs

Governance Achievements

• Submitted energy transition strategy to shareholders for an advisory vote (May 18, 2021)
• Increased weighting of Energy Transition performance metric in Long-term Incentive Plan (LTIP) from 10% to 20%
• Introduced absolute GHG abatement target to the annual bonus scorecard

Climate Goals & Targets

Environmental Challenges

• Risks associated with the energy transition, including stranded assets and regulatory changes
• Need for global collaboration to achieve net-zero emissions
• Challenges in developing CCS globally at the required pace

Mitigation Strategies

• Shifting capital from Upstream to Transition and Growth businesses
• Setting carbon budgets for all businesses to drive investment decisions
• Working with governments, other companies, and investors to accelerate the transition

Supply Chain Management

Responsible Procurement

• Working with contractors and suppliers who contribute to sustainable development

Climate-Related Risks & Opportunities

Transition Risks

• Regulatory risks
• Commercial risks
• Societal risks
• Risk of stranded assets

Opportunities

• Growth in low-carbon energy sales
• Development of CCS technology
• Investment in nature-based solutions

Reporting Standards

Frameworks Used: TCFD

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 13 (Climate action)

Providing access to clean and affordable energy, reducing emissions, and supporting a just transition

Sustainable Products & Innovation

• Biofuels
• Hydrogen
• Renewable electricity
• Carbon capture and storage
• Nature-based solutions

Environmental Metrics

ESG Focus Areas

• Climate Change

Environmental Achievements

• Reduced Scope 1 emissions from 60 million tonnes of carbon dioxide equivalent (CO2e) in 2021 to 51 million tonnes CO2e in 2022.
• Reduced net carbon intensity to 76 gCO2e/MJ in 2022, a 1.3% decrease from 2021 and a 3.8% reduction compared with 2016.
• Reduced routine hydrocarbon flaring to 0.1 million tonnes in 2022, a decrease from 0.2 million tonnes in 2021.

Social Achievements

• Launched a program with partners called Avelia to encourage companies to invest in the production of SAF.
• Made progress rolling out a network of electric vehicle charging points.
• Acquired German company SBRS GmbH, which provides electric charging services for e-buses, e-trucks, and e-vans.

Governance Achievements

• Board-level oversight of climate-related issues through the Safety, Environment and Sustainability Committee (SESCo).
• Energy transition targets included in the 2022 annual bonus scorecard (15% weighting), Performance Share Plan (PSP) awards (10% weighting), and Long-term Incentive Plan (LTIP) for senior executives (20% weighting).

Climate Goals & Targets

Environmental Challenges

• Commercial risks associated with the transition to a low-carbon economy.
• Regulatory risks, including evolving carbon regulations and potential restrictions on hydrocarbon use.
• Societal risks, including litigation and public pressure.
• Physical risks from acute and chronic climate change impacts.
• Market risks from changing customer demand and investor preferences.

Mitigation Strategies

• Integrated climate-related risk management process embedded in the Shell Control Framework.
• Scenario analysis to inform strategy and financial planning.
• Investments in low-carbon energy solutions and emission reduction initiatives.
• Engagement with governments, customers, and partners to address climate-related risks and opportunities.
• Active management of all climate-related risk components within overall risk appetite.

Supply Chain Management

Supplier Audits: 1039 suppliers joined the Shell Supplier Energy Transition Hub by the end of 2022.

Responsible Procurement

• Shell Supplier Principles
• Sustainability clauses in contracts
• Climate-related disclosure through a non-public platform.

Climate-Related Risks & Opportunities

Physical Risks

• Flooding
• Droughts
• Wildfires
• Severe tropical storms
• Rising temperatures
• Rising sea levels

Transition Risks

• Regulatory changes
• Market shifts
• Changes in demand for products
• Increased compliance costs
• Potential for stranded assets

Opportunities

• Growing demand for low-carbon energy products and services.
• Opportunities in renewable energy, hydrogen, and CCS.

Reporting Standards

Frameworks Used: GRI, Greenhouse Gas Protocol

Third-party Assurance: LRQA Group Ltd

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 13 (Climate action)

Shell's initiatives contribute to these goals through investments in renewable energy, emission reduction projects, and advocacy for climate-friendly policies.

Sustainable Products & Innovation

• E-Mobility
• Low-carbon fuels
• Renewable power generation
• Hydrogen
• CCUS

Environmental Metrics

ESG Focus Areas

• Greenhouse Gas Emissions

Climate Goals & Targets

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard

Third-party Assurance: www.shell.com/ghg

Environmental Metrics

ESG Focus Areas

• Climate Change
• Energy Transition
• Emissions Reduction
• Just Transition
• Governance

Environmental Achievements

• Reduced carbon emissions from operations by 31% compared with 2016 levels (by end of 2023)
• Achieved more than 60% of the target to halve emissions from operations by 2030 (by end of 2023)
• Reduced total methane emissions by 70% since 2016 (by end of 2023)
• Methane emissions intensity well below 0.2% in 2023
• Reduced net carbon intensity of energy products sold by 6.3% compared with 2016 (in 2023)
• Vito platform in the Gulf of Mexico producing around 80% less CO2 emissions over its operating life compared with the original design
• Timi platform in Malaysia mainly powered by solar and wind energy

Social Achievements

• Invested $5.6 billion in low-carbon solutions in 2023 (23% of total capital spending)
• Pledged $200 million to help people get access to energy in sub-Saharan Africa, India, and Southeast Asia
• Aiming to help 15,000 people in the UK get jobs focused on the energy transition by 2035
• Around 6,900 Shell employees completed energy transition-related courses in 2023
• Sharing proceeds from renewable energy generation at Pottendijk wind and solar power park with the community

Governance Achievements

• 89% of shareholders voted in support of the Energy Transition Strategy in 2021
• Introduced three new metrics in the annual bonus scorecard to reflect Shell’s role in the energy transition
• Executive compensation linked to ESG targets (2023 annual bonus scorecard: 15%; 2023 LTIP awards: 25%; 2023 PSP awards: 12.5%)

Climate Goals & Targets

Environmental Challenges

• Maintaining secure and affordable energy supplies while transitioning away from fossil fuels
• Balancing the need for continued oil and gas production with the need to reduce emissions
• Addressing customer emissions from the use of oil products (Scope 3, Category 11)
• Developing and scaling up affordable low-carbon solutions
• Lack of clear business models for CCS in many countries
• High cost of low-carbon alternatives such as biofuels and synthetic fuels
• Delays in project delivery due to prolonged litigation and permitting hurdles

Mitigation Strategies

• Growing LNG business with lower carbon intensity through renewable power and CCS
• Reducing emissions from oil and gas production through innovative platform designs
• Transforming refineries into low-carbon energy and chemicals parks
• Investing in electric vehicle charging, biofuels, and integrated power
• Developing and investing in CCS and carbon removal technologies
• Advocating for supportive government policies and regulations
• Engaging with stakeholders to address social aspects of the energy transition

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of low-carbon solutions
• Growth in renewable energy

Reporting Standards

Frameworks Used: TCFD

Third-party Assurance: Limited assurance

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 13 (Climate Action)

Sustainable Products & Innovation

• Biofuels
• Renewable natural gas
• Sustainable aviation fuel
• Hydrogen
• Electric vehicle charging