Shell pledges to halve emissions by 2030 as it reports lower profits

·2 min read
<span>Photograph: Kirsty Wigglesworth/AP</span>
Photograph: Kirsty Wigglesworth/AP

Royal Dutch Shell has set out a target to halve its emissions by the end of the decade as it revealed worse-than-expected profits for the third quarter despite a global surge in oil and gas markets.

The Anglo-Dutch group, which announced a profit of $4.13bn (£3bn) for the last quarter, is under pressure to continue paying out hefty shareholder dividends from its fossil fuel business while cutting its total greenhouse gas output in line with tougher climate standards among many of its investors.

However, its new climate target falls short of including the bulk of the emissions from the oil and gas it produces and is unlikely to satisfy green campaigners who have called on Shell to urgently reduce its total global heating impact.

The worse-than-expected profit announcement emerged after a major US investor called on the company to break itself up to put an end to its “incoherent” strategy and conflicting stance on climate action.

US hedge fund Third Point, which is led by Daniel Loeb, accused Shell of having “an incoherent, conflicting set of strategies attempting to appease multiple interests but satisfying none”.

The fund, which has reportedly built up a stake in Shell worth close to $750m, called on the company to split itself up into “multiple standalone companies”, including a “legacy” arm focused on oil and gas.

Third Point said its “bold strategy” was likely to lead to an acceleration of CO2 reduction as well as significantly increased returns for shareholders, “a win for all stakeholders”.

Shell’s third-quarter profit was well below the $5.42bn predicted by analysts, and was short of the $5.5bn reported in the previous quarter, despite record cash flows of $16bn in part due to the global gas crisis, which has driven market prices to historic highs.

The new climate target has emerged months after a Dutch court ordered the company to speed up plans to cut its emissions in line with global climate targets. The company has confirmed that it will appeal against the court ruling.

The company has set a goal to become a net zero carbon energy company by 2050, but will also continue to grow its gas business by more than 20% in the next few years. The strategy includes a modest fall in oil production, by selling oilfields or through the natural decline of their reserves, and an increase in gas production and gas exports to the global market.

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