The UK Government has said it will encourage other oil and gas firms to follow Shell in linking executives’ pay packs to climate targets.
Earlier this week the energy major announced an unprecedented move to link remuneration to reducing its carbon footprint.
Climate groups widely welcomed the action, as Shell aims to make a 20% reduction by 20135 and 50% by 2050.
Starting in 2020, Shell will set the target each year, for the following three or five-year period.
In the House of Lords yesterday, the Bishop of St Albans, Alan Smith, asked about efforts to encourage more oil and gas firms to follow suit.
He said the announcement was welcome, but it comes following “years of investor pressure”.
Lord Henley, parliament under-secretary for the Department for Business, Energy and Industrial Strategy (BEIS) said the government will encourage further work along these lines, but the decision is up to individual firms.
He said: “We do believe it’s important that executive pay should be a matter for the companies involved. That’s why we leave it to them but why we also gave powers to shareholders in 2013 to insist that they can have a binding vote on directors’ remuneration policy.
“The government though, in terms of striving to meet carbon reduction targets, will continue to encourage others to do the same but it must be a matter for the companies.”