Royal Dutch/Shell has pulled out of the Global Climate Coalition (GCC), citing irreconcilable differences with other members over emissions-reduction targets.
GCC comprises companies from a wide range of U.S. industries that emit greenhouse gases, in particular carbon dioxide. Shell was a member of GCC through its U.S. operating unit, Shell Oil Co.
Rift grewShell's European headquarters, through which the company's global operations except for the U.S. are controlled, has restructured the company as an environmentally driven operation (OGJ, Nov. 24, 1997, p. 29).
A dichotomy between RD/Shell and Shell Oil became apparent after the climate change conference in Kyoto in December. Shell as a company backed the emissions-reductions targets, yet Shell Oil remained a member of GCC, which rejected the agreement (OGJ, Dec. 22, 1997, p. 17).
Mark Moody-Stuart, chairman of Shell Transport & Trading, revealed on Apr. 21 that the company had spoken to other GCC members about emissions targets before the Kyoto conference.
"Since Kyoto," said Moody-Stuart, "divisions within GCC have become marked. After the conference Shell wrote to the GCC saying that, while GCC was opposed to the Kyoto targets, that was not Shell's position.
"We told GCC there was a fundamental difference of opinion and that it had become so extreme that Shell would have to terminate its membership. We concluded last week that our differences with GCC are irreconcilable.
"We reached a 'high noon' with GCC, and our subscription will not be renewed. We are convinced that the oil industry must be part of the solution to emissions, not part of the problem."
Moody-Stuart said that Shell has talked to Exxon Corp., a leading member of GCC and nonoperating partner with Shell in many joint ventures worldwide, and does not think its withdrawal will affect their relationship.
New tackMoody-Stuart announced Shell's split from GCC at a press conference to launch what is expected to be the company's first annual report of combined financial, social, and environmental performance.
The company has entered virgin territory with the report: while financial accounting and recently health and safety reporting are standard, benchmarking of social performance has not been attempted by a major company.
With the report, Shell has attempted to measure its performance against its business principles, which were revised in the wake of the Brent spar and Nigerian human rights protests of 1995.
Mark Wade, leader of Shell's social accountability team, explained that, while some of the data in the report have not been verified-an estimated 60% of data can be checked out-the report is an honest attempt to address key issues facing the company.
"There are two novel features in the report," said Wade. "We have asked an outsider to give a personal view of our performance, and we have included a 'Tell Shell' reply card in the report.
"With the reply card, we are inviting readers to tell us what they think about how we approach issues such as human rights, climate change, and development of renewables, and how they would tackle these issues."
Wade said Shell expects difficulties with working out ways to verify some of the statements for this and subsequent reports: "But we want to show that sustainable development is a principle of our daily operations."
The outsider asked to contribute to the report was John Elkington, chairman of environmental consultant Sustainability Ltd., London, which has gained a reputation as a think tank for sustainable development.
Elkington wrote: "If sustainable development is to become a global reality rather than remain a seductive mirage, governments, communities, companies, and individuals must work together to improve their 'triple bottom line'-economic, social, and environmental performance.
"To this end we not only need new forms of accountability but also new forms of accounting. We must find accurate, useful, and credible indicators of progress in terms of economic prosperity, environmental quality, and social justice."
Copyright 1998 Oil & Gas Journal. All Rights Reserved.