CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
CDP – shell.com/ghg
Climate Change 2016 Information Request
Royal Dutch Shell
Module: Introduction
Page: Introduction
CC0.1
Introduction: Please give a general description and introduction to your organization.
Shell is one of the world’s largest independent oil and gas companies in terms of market capitalisation, operating cash flow and production. Our business explores
for gas and oil worldwide, both from conventional fields and from sources such as tight rock and shale. We work to develop new oil and gas supplies, and have a
global network of refineries and chemical plants. We also transport and trade oil, gas and other energy-related products and serve around 25 million customers a
day through our global network of 43,000 branded retail sites. Shell invests in alternative energy as well as biofuels production and retail.
UPSTREAM
Upstream explores for and recovers crude oil, natural gas and natural gas liquids, transports oil and gas, and operates the upstream and midstream infrastructure
necessary to deliver oil and gas to market. The Upstream organisation co-ordinates all of Shell’s conventional oil and gas exploration and production, including our
deep-water operations. Upstream also includes our heavy oil and shale activities.
INTEGRATED GAS AND NEW ENERGIES
Integrated Gas (IG) manages most of Shell’s conventional natural gas operations, including the manufacture and distribution of liquefied natural gas (LNG) and gasto-liquids products. The division includes IG’s marketing, development and trading activities to bring natural gas to our customers around the world; it also includes
our wind activities. Establishing IG as a stand-alone business reflects its further potential for growth.
New Energies will be a new Line of Business to bring greater focus to exploring and investing in low carbon opportunities and will interface and collaborate across
the whole of the enterprise.
DOWNSTREAM
Shell’s Downstream business manages Shell’s refining and marketing activities for oil products and chemicals. It is divided into five core businesses: refining, retail,
chemicals, lubricants, and trading and supply. In Downstream, we convert oil and gas resources into valuable products, and market and sell them around the
world. Downstream also oversees Shell’s interests in trading, shipping and low-carbon fuels, including biofuels.
PROJECTS & TECHNOLOGY
Shell Projects & Technology (P&T) provides technical services, technology capability and major project delivery across both Upstream and Downstream activities.
P&T drives research and innovation to create technologies for finding and developing oil and gas. P&T also provides leadership in contracting and procurement, as
well as in safety, environmental and greenhouse gas (GHG) emissions management.
BG GROUP
In April 2015, Shell announced an offer for BG Group plc and the transaction was completed on February 15, 2016. This combination should add significantly to our
business, particularly in LNG worldwide and deep-water oil and gas in Brazil. BG Group’s activities will be included in our next sustainability report.
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CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
CC0.2
Reporting Year: Please state the start and end date of the year for which you are reporting data.
The current reporting year is the latest/most recent 12-month period for which data is reported. Enter the dates of this year first.
We request data for more than one reporting period for some emission accounting questions. Please provide data for the three years prior to the current reporting
year if you have not provided this information before, or if this is the first time you have answered a CDP information request. (This does not apply if you have been
offered and selected the option of answering the shorter questionnaire). If you are going to provide additional years of data, please give the dates of those reporting
periods here. Work backwards from the most recent reporting year.
Please enter dates in following format: day(DD)/month(MM)/year(YYYY) (i.e. 31/01/2001).
Enter Periods that will be disclosed
Thu 01 Jan 2015 - Thu 31 Dec 2015
CC0.3
Country list configuration
Please select the countries for which you will be supplying data. If you are responding to the Electric Utilities module, this selection will be carried forward to
assist you in completing your response.
Select country
United States of America
Canada
Nigeria
Netherlands
Singapore
Germany
Malaysia
United Kingdom
International Waters
Australia
Rest of world
CC0.4
Currency selection: Please select the currency in which you would like to submit your response. All financial information contained in the
response should be in this currency.
USD($)
CC0.6
Modules
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CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
As part of the request for information on behalf of investors, electric utilities, companies with electric utility activities or assets, companies in the automobile or auto
component manufacture sub-industries, companies in the oil and gas sub-industries, companies in the information technology and telecommunications sectors and
companies in the food, beverage and tobacco industry group should complete supplementary questions in addition to the main questionnaire.
If you are in these sector groupings (according to the Global Industry Classification Standard (GICS)), the corresponding sector modules will not appear below but
will automatically appear in the navigation bar when you save this page. If you want to query your classification, please email [email protected].
If you have not been presented with a sector module that you consider would be appropriate for your company to answer, please select the module below. If you
wish to view the questions first, please see https://www.cdp.net/en-US/Programmes/Pages/More-questionnaires.aspx.
Module: Management
Page: CC1. Governance
CC1.1
Where is the highest level of direct responsibility for climate change within your organization?
Board or individual/sub-set of the Board or other committee appointed by the Board
CC1.1a
Please identify the position of the individual or name of the committee with this responsibility.
The overall accountability for climate change within Shell lies with the Chief Executive Officer (CEO) and the Executive Committee (EC - CEO, CFO and main
business and functional Directors).
The HSSE & SP Executive is the highest governance body with active decision-making authority for Health, Safety, Security, Environment and Social Performance
(HSSE & SP) in Shell, including climate change risk management. It is comprised of the CEO, the Executive Director Upstream International, the Director – Projects
& Technology, the EVP Safety&Environment and the VPs Safety&Environment of Businesses and Functions.
The Royal Dutch Shell Board of Directors has oversight of all areas of risk, including climate change. For climate change risk, the Board is supported by the
Corporate and Social Responsibility Committee (CSRC). The Committee is currently made up of Non-executive Directors and their role is to review and advise the
Board on policies and performance against the Shell General Business Principles, the Shell Code of Conduct and mandatory HSSE & SP standards.
Outside the Executive Committee and the Board, the most senior individual with direct responsibility for climate change, and nominated risk owner, is the Executive
Vice President (EVP) Safety and Environment (S&E) who has direct access to the CEO. Group CO2, a corporate team with global remit is responsible for evaluating
climate change related risks to the Shell group, supports the business in developing CO2 management strategies and has oversight of the company´s CO2
management implementation programme. The team is led by the VP CO2 who is the climate change risk focal point, and reports to the EVP S&E.
CC1.2
Do you provide incentives for the management of climate change issues, including the attainment of targets?
Yes
CC1.2a
Please provide further details on the incentives provided for the management of climate change issues.
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CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Who is entitled to
benefit from these
incentives?
Corporate executive
team
All employees
All employees
All employees
The type
of
incentives
Monetary
reward
Monetary
reward
Recognition
(nonmonetary)
Recognition
(nonmonetary)
Incentivized
performance
indicator
Efficiency project
Other: TRCF,
Energy Intensity, Oil
Spills, Water use
Efficiency project
Other: TRCF,
Energy Intensity, Oil
Spills, Water use
Other: Variety of
indicators depending
on specific
improvements made
(incl. emissions
reduction and
efficiency increase)
Other: Variety of
indicators depending
on specific
improvements made
(incl. emissions
reduction and
efficiency increase)
Comment
Executive Committee members’ annual bonus is aligned with Shell’s stated business strategy and
commitments, which focus on financial measures, operational excellence, and sustainable
development. In 2015, sustainable development continued to account for 20% of the company
scorecard, which helps determine the annual bonus for all our employees, including members of
the Executive Committee (EC). In 2015, the EC's sustainable development measures were split
evenly between Shell's safety and environmental performance, including targeted measures
covering operational spills, energy efficiency of refineries and use of fresh water. Targets are set
each year by the Board’s Remuneration Committee taking into account the performance achieved
in the last three years. Energy efficiency (the amount of energy consumed for every unit of output)
is used as a representative measure for GHG performance. We improve energy efficiency within
our operations, i.e. through the improvement of reliability of equipment and undertaking energy
efficiency projects which result in the reduction of CO2 emissions. In 2015, “Operational Safety
Tier 1 Events” became part of the sustainable development share of the scorecard.
Sustainable development accounts for 20% of the overall company scorecard. Sustainable
Development performance is assessed based on the safety measure Total Recordable Case
Frequency and consideration of a broad range of internal sustainability measures, including other
safety measures and environmental measures including GHG emissions. In determining the final
score, the Chief Executive Officer takes into account the overall sustainable development
performance. In 2015, “Operational Safety Tier 1 Events” became part of the sustainable
development share of the scorecard.
The annual Chief Executive Officer’s HSSE & SP Awards programme recognises individuals and
teams working to improve Shell’s performance in the areas of health, safety, security, environment
(HSSE) and social performance (SP).
All employees are eligible for individual recognition via the annual individual staff appraisal
process. The efforts that individuals have made to GHG specific activities that are part of their
annual goals are considered and rewarded based on their performance. In addition there are
special recognition awards where individuals are rewarded for significant accomplishments in
specific projects.
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CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Page: CC2. Strategy
CC2.1
Please select the option that best describes your risk management procedures with regard to climate change risks and opportunities.
Integrated into multi-disciplinary company-wide risk management processes
CC2.1a
Please provide further details on your risk management procedures with regard to climate change risks and opportunities.
Frequency
of
monitoring
Annually
CC2.1b
To whom are results
reported?
Board or individual/sub-set
of the Board or committee
appointed by the Board
Geographical areas considered
Shell has a global approach to climate
change risk management, covering all
regions worldwide where we operate
or explore.
How far into
the future are
risks
considered?
> 6 years
Comment
Shell’s approach to risk management includes a variety
of processes. The company’s Control Framework is at
the basis of these processes. Risks and opportunities
are assessed both at company and asset level.
Please describe how your risk and opportunity identification processes are applied at both company and asset level.
i) Company level
Risks and opportunities are assessed via a single Control Framework (CF) that is designed to manage rather than eliminate the risk of failure to achieve business
objectives. It therefore only provides reasonable assurance against material misstatement or loss. The CF applies to all wholly-owned Shell companies and to
ventures and other companies where Shell, directly or indirectly, has a controlling interest. The CF defines the Opportunity Realisation Process that requires
assurance at specific stages of the process and outlines the required governance. A dedicated department has the responsibility of actively monitoring company
levels of emissions and GHG intensity. This includes a dedicated GHG Project Manager to guide the largest projects, representing around 80% of all additional GHG
from new investments, in managing GHG-related content, from both a risk and an opportunity standpoint. Risks are assessed for likelihood of occurrence and impact
on Shell (financial/non-financial terms).
ii) Asset level
Risks and opportunities are assessed via the Shell Risk Assessment Matrix (part of the Shell HSSE&SP CF) that identifies consequences to people, assets,
environment and reputation. Applied severity bands range from “no damage/effect” to “massive damage/effect”. Likelihood is reported on an increasing scale from
“Never heard of in the Industry” to “Has happened more than once per year at the location”. Major installations are certified against internationally recognised
environmental management system standards (e.g. ISO14001). The risks and opportunities of climate change are assessed for new assets or projects in
development by considering a project screening value of GHG emissions at $40/tonne in all investment decisions. New and existing assets are required to have a
GHG & Energy Management Plan (details improvement options considering the GHG Project Screening Value, emissions and/or energy intensity target(s)).
CC2.1c
How do you prioritize the risks and opportunities identified?
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CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Shell’s prioritisation of risks and opportunities follows a structured approach. We actively monitor our portfolio GHG footprint of all assets as well as our products to
quantify future regulatory costs related to CO2 or other related climate policies. This allows us to effectively prioritize areas of greater concern and assess mitigation
options and the most viable responses. For planned major projects, emissions profiles are estimated and financial exposure from GHG regulations is assessed. All
investment projects, as well as existing operations that undergo substantial modifications, are required to apply a project screening value of $40 a tonne of CO2e.
Mitigation options for GHG risks are prioritised and managed by looking at cost-effective ways based on bespoke abatement curves that quantify impact as well as
economic attractiveness. Actions to mitigate the key exposures and future mitigation options are agreed with the business and incorporated into their plans. For long
range planning, Shell disaggregates its portfolio into a series of strategic themes. These can be concentrated in one business (e.g. heavy oil) or spread across
several (e.g. integrated gas). Each of the themes has a 2030 GHG intensity aspiration and road-map based plans, with a granulated review of GHG related risks and
opportunities to show the activities needed to achieve the guiding aspiration. We actively rank and monitor the prioritisation of long term opportunities that might be
benefited rather than threatened by climate change regulation, based on the fit with our own competences, the potential materiality of the activity and its economic
returns. Our main opportunity related contributions to reducing GHG emissions, both our own and helping our customers emit less include: bring cleaner-burning
natural gas to a wider market; supply more biofuels; progress Carbon Capture and Storage (CCS) technologies; and invest in lower carbon alternatives such as
hydrogen, wind and solar.
CC2.2
Is climate change integrated into your business strategy?
Yes
CC2.2a
Please describe the process of how climate change is integrated into your business strategy and any outcomes of this process.
i/iii) Influence of internal reporting processes on the business strategy
Shell’s strategy is actively driven by Group CO2, a corporate function that monitors and examines the strategic implications of climate change to Shell’s business
and the impact of developments in governmental policy and regulation with a direct line of accountability to the CEO and oversight of the company’s GHG
management programme. Shell collaborates and actively participates in dialogue with a number of organisations and industry associations to monitor climate
change developments and to move the energy and climate change discussion forward. Shell identifies three main aspects that influence business strategy: activities
to help risk management related to CO2 regulation (e.g. energy efficiency); managing the physical impacts of climate change on our business and investment in
opportunities that could benefit from intensifying CO2 regulation (CCS, alternative energies and natural gas).
ii) Examples of how business strategy has been influenced
We strive for improved energy efficiency to help reduce Shell’s overall GHG emissions: between 2009 and 2015, the energy intensity of our refineries decreased by
about 6%, due to a combination of improved equipment reliability and better operating processes and energy-efficiency projects.
Shell’s commitment to advanced biofuels is shown by our multi-billion dollar investment in Brazilian sugar cane ethanol manufacturing via our joint venture Raízen.
In 2015, Raízen produced more than 2 billion litres of low-carbon biofuel. Sugar cane ethanol has one of the best CO2 performances compared with other
conventional biofuels available today in commercial volumes. It can reduce CO2 emissions by around 70% compared to gasoline, on a lifecycle (well-to-wheels)
basis.
iv) Influence on short term strategy (5-10yr)
CO2 regulation will increase in future as the drive to de-carbonize energy sources and uses intensifies. Shell actively measures and monitors its own CO2 footprint,
specifically that of its major assets as well as its products to understand the company’s exposure to CO2 regulation, its mitigation options and the most viable
responses. This analysis affects design and technology choices in major projects as well as longer term portfolio-related options. We test the resilience of our
portfolio against externally published, future pathways, including credible low emissions pathways. To test the resilience of new projects, we assess potential costs
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CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
associated with GHG emissions when evaluating all new investments. Our approach applies a uniform project screening value (PSV) of $40 (real terms) per tonne of
CO2e to the total GHG emissions of each investment. This PSV is generally applied when evaluating our new projects around the world to test their future resilience.
The project development process features a number of checks that may require development of detailed GHG and energy management plans. High-emitting
projects undergo additional sensitivity testing, including the potential for future CCS projects. Projects in the most GHG-exposed asset classes have GHG intensity
targets that reflect standards sufficient to allow them to compete and prosper in a more CO2 regulated future. These processes can lead to projects being stopped,
designs being changed, and potential GHG mitigation investments being identified, in preparation for when regulation would make these investments commercially
compelling. Additionally, Shell´s new energies’ business is actively exploring opportunities in: development of new fuels for mobility, such as biofuels and hydrogen;
integrated energy solutions, that combine, for example, wind and solar energy; and connecting customers with new business models for energy, enabled by
digitalisation as well as de-centralisation of energy systems.
v) Influence on long term strategy (10-20yr)
Shell has long life assets that will last many decades. Some of these might have been designed according to outdated climate parameters. As physical impacts of
climate change are experienced or expected, it raises the need to actively review the resilience of key producing assets and develop adaptation plans to remain
resilient to intensifying climate trends.
Looking further than planning and strategy periods that guide our current investments, Shell updates its ‘Energy Scenarios’
every few years, which detail plausible energy future long term pathways. These scenarios have been an important influence on Shell’s longer-term strategic
thinking. The latest New Lens Scenarios (2013) highlight the importance of CCS technology, amongst other measures, in addressing climate change. Shell is keen
to be at the forefront of new energy solutions which includes the development of cleaner and alternative energy technologies. Examples of how we develop new
technologies are our GameChanger programme (identifies unproven ideas) and Shell Technology Ventures (corporate venturing arm investing in companies).
vi) Strategic advantage
We are seeking cost-effective ways to manage GHG emissions and see potential business opportunities in developing such solutions. Key components of Shell’s
business strategy linked to climate change opportunities supplying more natural gas to replace coal for power generation; investing in low carbon energy; and
progressing CCS technologies.
The International Energy Agency has stated that CCS could capture enough CO2 to deliver a 13% reduction in overall emissions
needed by 2050 to limit the rise in global temperature to 2°C. To advance, de-risk and commercialise CCS technologies, Shell is involved in CCS demonstration
projects to drive down the costs of CCS long-term including the Quest project (operations started in late 2015, Canada) and other projects in Australia, Norway and
Qatar. Quest is related to our CCS emissions reduction target (Abs1 in 3.1a - 0,32mln tonne reduction delivered). Used in combination with renewables and CCS,
natural gas is also essential for a significantly lower CO2 pathway beyond 2020. Around half of Shell’s current production is natural gas and Shell has a leadership
position in LNG production and sales. Our strategic hydrocarbon emphasis on natural gas is partly based on a strategic belief of an expanding role for natural gas in
the future energy mix as a result of climate change regulation.
CC2.2c
Does your company use an internal price of carbon?
Yes
CC2.2d
Please provide details and examples of how your company uses an internal price of carbon.
At Shell, we assess the GHG risks on all our planned ventures, including existing operations that undergo substantial modifications, applying a GHG project
screening value (PSV) to the base case economics for all new projects since 2000. Since 2008, our GHG PSV has been $40 per tonne. This means that new
projects are assessed for the financial impact if a government imposed price or levy of $40 for GHG emissions. In addition to applying the base case GHG PSV, we
also consider GHG price sensitivities, both in the case of upsides and downsides e.g. for projects with a high exposure to carbon pricing or legislation, we consider
the impact of higher GHG prices. The screening value can affect our project design in a number of ways. Some projects may be stopped at an early stage if the
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CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
GHG footprint is too high or a design may be altered to reduce GHG emissions at start-up. For example, we have stopped some projects at an early stage, due to
high levels of CO2 in the hydrocarbon reservoir. Alternatively, a project may be designed to enable CO2 reduction at a later date if there is an increase in the local
government imposed carbon price – for example, by adding CCS. As well as guiding investment decisions, our GHG PSV is used as a reference to guide business
planning assumption when current GHG costs are unknown or expected to change within the planning period.
CC2.3
Do you engage in activities that could either directly or indirectly influence public policy on climate change through any of the following? (tick all
that apply)
Direct engagement with policy makers
Trade associations
Funding research organizations
Other
CC2.3a
On what issues have you been engaging directly with policy makers?
Focus of
legislation
Cap and trade
Other: Global
Carbon Market
Other: Carbon
Capture and
Storage (CCS)
Other: EU
Climate Policy to
2030
Other: USA:
Renewable Fuel
Standard (RFS) Methane
Corporate
Position
Details of engagement
Proposed legislative solution
Support
1. In the EU we have actively encouraged the
implementation of the Market Stability Reserve within the EU
Emissions Trading Scheme.
2. Shell has supported development of China´s ETSs. We
have participated in a number of business to business
missions with IETA´s Business Partnership for Market
Readiness (BPMR) supporting the World Bank´s PMR.
1. Support the need for a robust government led carbon
pricing mechanism in the EU by removing the significant
surplus of allowances now in the system.
2. Introduction of a nationwide ETS in China from 2017; Shell
has set up a trading desk in China and is actively
participating in existing carbon markets.
Support
Shell provided detailed input to IETA’s engagement on global
carbon markets for the Paris COP21. We participated in a
number of side events and meetings to support measures for
linked carbon markets. Continued support for implementation
of these measures through IETA.
Support
Working through the WBCSD and GCCSI to see CCS
deployed more widely and potentially recognised within the
proposed Paris agreement.
Development of government led carbon pricing frameworks
in key markets to provide incentives for emission reduction
activities (COP21 Decision paragraph 137). Linked carbon
markets through development of internationally traded
mitigation outcomes (ITMOs) and emissions mitigation
mechanisms (EMM) (Paris Agreement; Article 6).
Enabling the construction of a series of demonstration
projects globally with the objective of having CCS
commercially viable in the 2030s.
Support
Engaging through the Commission’s outreach process on the
2030 Roadmap.
A single GHG target for the EU rather than a wide variety of
targets and approaches.
Support
Shell is taking advantage of multiple opportunities to talk with
policymakers and stakeholders on the blend wall problem
and the need to address the problem to protect consumers
and preserve the RFS. Shell spoke at a Bloomberg
Serious problems are developing in the US transportation
fuel system as a result of the federal renewable fuel standard
(RFS), as the mandated levels of renewable fuels exceed
levels that are compatible with vehicles and infrastructure.
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CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Focus of
legislation
regulations
Other: Canada:
Federal Oil and
Gas Regulation in
Canada
Other: Carbon
Pricing
Corporate
Position
Details of engagement
Proposed legislative solution
conference and a conference held at the University of Illinois
and testified at an EPA hearing concerning the RFS
standards. Shell also filed written comments on EPA’s
proposed 2014 RFS standards. Regarding methane, Shell
has been an industry leader in engaging with EPA to write a
workable rule for new/modified onshore sources. We have
also been influential in modifying API’s position and
encouraging the trade association to work productively with
EPA. And we took a lead role in influencing the positions of
several majors/IOCs. We have met repeatedly with EPA and
the White House over the past two years as Shell only, with
industry cohorts and with API. We remain very engaged with
API and EPA as the agency prepares a draft rule for the
regulation of methane from existing sources.
This is referred to as the blend wall problem. If this problem
is not quickly addressed, the RFS will limit supplies of
gasoline and diesel in the US with potentially significant
adverse impacts on consumers and the USA economy. In
addition, if the government does not appropriately address
these issues, public and political support for the RFS
program could diminish. This situation creates tremendous
investment uncertainty for companies like Shell that are
pursuing cellulosic biofuels. Consequently, Shell has stepped
up its advocacy and become much more vocal on these
issues to try to fix and preserve the RFS. In May 2016, the
USA issued a final rule for regulating methane emissions
from new/modified oil and gas upstream sources. The rule
focuses on applying technology such as low-bleed
pneumatics and work practices such as leak detection and
repair (applicable only to onshore production). In February
2016, the Administration announced plans to regulate
methane emissions from existing onshore oil and gas
sources. The Administration plans to issue a draft rule at the
end of 2016.
The federal government is developing climate change
regulations covering carbon pricing and upstream methane
emissions. Consultation is ongoing through Q2/Q3 2016. No
draft regulations have yet been tabled for either framework.
Support
Direct engagement with government civil servants and
through the Canadian Association of Petroleum Producers.
Support
Broad engagement through many channels including
speeches, workshops, Shell Scenario presentations, World
Bank initiatives, local advocacy groups, civil society groups,
social media (blogs, Twitter etc.). In 2015 we became
members of the World Bank CPLC. In mid-2015 our CEO
joined with other oil and gas industry CEOs to call for
increased use of carbon pricing. The call has resulted in an
initiative for the industry to work closely with CPLC (amongst
others) to progress adoption of government led carbon
pricing.
Cap and trade
Support
EU Climate Policy to 2030: In the EU we have further
encouraged the adoption of measure to strengthen the ETS.
Other: Canada:
Support
Direct engagement with government and through the
Government led carbon pricing is an essential policy tool to
drive system-wide efficiencies and incentivise the extension
of low carbon electrification and other technological
development and implementation at the lowest cost to
society.
We are encouraging policy makers in the EU to implement a
means of more quickly drawing down on the allowance
surplus in the EU ETS. A number of ideas are in the early
stages of development but all would see allowances
removed from the system.
The Alberta Provincial Government has an existing
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CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Focus of
legislation
Provincial Oil and
Gas Regulation in
Alberta
Carbon tax
CC2.3b
Corporate
Position
Details of engagement
Canadian Association of Petroleum Producers.
Support with
minor
exceptions
Shell’s preference remains for emissions trading schemes
(ETS) including cap and trade. Shell supports government
led carbon pricing instruments such as a carbon tax where
an ETS is not favoured by the government. This includes
South Africa.
Proposed legislative solution
framework for GHG regulations, the Specified Gas Emitters
Regulation (SGER) which regulates GHG emissions from
large facilities in the province. Effective January 1st, 2018,
SGER will be replaced by a performance standard
mechanism. Details of the performance standards have not
yet been finalized. Further, industry oil sands emission limit
will be capped at 100MT/yr. As of January 1st, 2017, Alberta
will implement an economy wide carbon levy. Alberta is also
regulating methane emissions in the sector.
Continue support of implementation of a carbon tax. Shell
has been advocating independently and increasingly via
trade bodies.
Are you on the Board of any trade associations or provide funding beyond membership?
Yes
CC2.3c
Please enter the details of those trade associations that are likely to take a position on climate change legislation.
Trade association
Is your
position
on climate
change
consistent
with
theirs?
Please explain the trade association's position
IETA
Consistent
Using market based instruments such as cap-and-trade to
effectively drive the mitigation of GHG emissions.
WBCSD
Consistent
Need to aggressively address global emissions and prepare for
the need to adapt to changes in the climate.
How have you, or are you attempting to, influence
the position?
Active participation in working groups. A Shell
representative is currently a Board Member. Shell has
supported IETA events at COP21 and throughout 2015
in the lead up to COP21. We strongly supported the
IETA view that carbon market architecture should
feature in the Paris Agreement (which it did in Article 6).
Active participation in the Energy & Climate Working
Group, co-chair of that group and a WBCSD Executive
Committee member throughout 2015.
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CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Trade association
Is your
position
on climate
change
consistent
with
theirs?
European Round
Table of
Industrialists
Mixed
FuelsEurope
Mixed
Please explain the trade association's position
Favour cost effective mechanisms to address GHG emissions in
the EU, but concerned that the ETS is leading to competitive
distortion.
FuelsEurope recognises that climate change is real and warrants
action. FuelsEurope supports the efforts of the international
community to address the risks of climate change and believes
that effective measures must be undertaken by all significant
world economies under an effective and clear international
agreement. At the same time, the growing global demand of
secure, reliable and affordable energy must be addressed in
order to fight poverty in several regions of the world and to allow
access to higher living standards to a rising middle class in many
developing countries. FuelsEurope supports the EU ETS as the
EU’s ‘flagship instrument’ within its energy and climate policy
framework, as a cost effective market mechanism for emissions
reduction in the power and industry sector". FuelsEurope does
not support higher carbon price in ETS.
IOGP
Mixed
IOGP supports EU ETS in Europe and appropriate carbon
leakage protection; however, they are not always supportive of all
measures that would push the EU ETS price.
API
Mixed
Supports the need to address climate change but will not actively
support mechanisms such as cap and trade.
CAPP
Mixed
Supports the need to address climate change and engages with
government on the best approaches for business.
USA: C2ES
Consistent
Provide pragmatic solutions and realistic energy pathways
forward to lower emissions.
Australian Industry
Greenhouse
Network (AIGN)
Business Council of
Mixed
Mixed
Supports the need to address climate change through marketbased approach to achieve genuine, lowest cost emission
reductions.
Australia’s policy response to risks associated with climate
How have you, or are you attempting to, influence
the position?
Active participation in the working group and seeking to
steer the position to a more pragmatic position of
engagement.
Active participation in FuelsEurope Information Groups
to ensure they are aligned with the Shell approach on
Climate Change or are not opposed to it.
Attempting to nuance the position of the association
with regard to raising the EU ETS ambition and
encouraging IOGP to focus the association’s advocacy
on the key upstream issues where there is alignment.
Attempt to mitigate negative positions when necessary.
Little scope for major positive advocacy work on climate
change legislation.
Active participation in working groups.
As a strategic partner throughout 2015 and into 2016,
we have influence over the work programme, but not
over the findings and resultant policy positions. A Shell
representative is a C2ES Board Member.
We influence through attendance and engagement in
meetings, input into submission processes and one-onone advocacy.
We influence through attendance and engagement in
11
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Trade association
Is your
position
on climate
change
consistent
with
theirs?
Australia (BCA)
Australian
Petroleum
Production and
Exploration
Association
(APPEA)
Western States
Petroleum
Association
(WSPA)
European Chemical
Industry Council
(CEFIC)
CC2.3d
Please explain the trade association's position
change should be workable, at lowest possible cost, fiscally
responsible, not make Australian industries uncompetitive
(representing interests of top 100 businesses in Australia).
Consistent
Mixed
Mixed
Using market based approach to address climate change, but
without distorting Australia’s international competitiveness.
The Western States Petroleum Association (WSPA) is a nonprofit trade association representing companies that explore for,
produce, refine, transport and market petroleum, petroleum
products, natural gas and other energy supplies in California,
Oregon, Washington, Arizona and Nevada. WSPA is full-service,
broad-based, member-driven petroleum industry trade
association within the western United States dedicated to
effectively and efficiently eliminate or mitigate the risks and
threats in the states we operate and to ensure and promote a
vibrant oil and gas industry through policies that are socially and
environmentally responsible.
CEFIC supports EU’s current climate and energy targets for 2020.
ETS must not create higher unilateral financial burdens to
industry, removing resources needed for investing in a more
sustainable economy or creating a cap for growth in Europe.
CEFIC efforts focus on optimising EU’s innovation, allocating
resources to help increase energy efficiency. CEFIC do not
support higher carbon price in ETS.
How have you, or are you attempting to, influence
the position?
meetings, input into submission processes and one-onone advocacy.
We influence through attendance and engagement at
meetings, input into submission process and active
participation in working groups.
WSPA advocates on behalf of Shell and other member
companies on issues such as: hydro fracking, fuel
specifications, refinery safety, tax issues, pipeline
safety, air quality, environmental remediation, water,
lubricants, crude by rail, oil spill response and climate
change (specifically in California: AB 32 and Low
Carbon Fuel Standard).
Active participation at all levels in CEFIC working
groups to ensure they are aligned with Shell approach
to climate change or are not opposed to it. Further effort
focuses on the advocacy messaging to a more positive
tone towards climate change.
Do you publicly disclose a list of all the research organizations that you fund?
No
12
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
CC2.3e
Please provide details of the other engagement activities that you undertake.
The information provided under 2.3a and 2.3c are only a selection of organisations that we are members of or engage with on different topics. The selection
focusses on organisations that have a specific climate change focus or working groups on climate change where we are regular and active participants through our
respective departments; however, the list is not comprehensive. Shell is also active through important stakeholders, such as the World Bank, where we are now a
member of their Carbon Pricing Leadership Coalition. During 2015 we helped kick-off the work of the Energy Transitions Commission and our Chairman is a
Commissioner within that body. Shell is pleased to participate in the ETC alongside a diverse group of other individuals and organizations who want to make a
meaningful contribution to low-carbon lives and economies. The aim of the ETC is to become an independent learning organisation providing policy suggestions, but
not to actively engage in lobbying. We participate in the ETC alongside 27 other companies, foundations and organisations. We also publish our own material on
climate change and energy transition issues, such as through our ongoing scenarios work (New Lens Scenario supplement “Pathways to net-zero emissions”
published in 2016).
CC2.3f
What processes do you have in place to ensure that all of your direct and indirect activities that influence policy are consistent with your overall
climate change strategy?
We do have a process in place that ensures that all direct and indirect activities are consistent with the overall climate change strategy.
The Executive Committee has ultimate authority on policies in respect of climate change. The Group CO2 policy team is responsible for preparing proposed policy
positions based on emerging Shell analysis, business input and external input with the EVP for Safety and Environment accountable. The team also ensures
consistency in application of Shell´s core principles and policy tasks in interactions with policy makers.
A high level working group called the Policy Forum –chaired by an EC member- that includes the main representatives is responsible for proposing policy and for
communicating policy externally, and reviews and approves the high level policy framework and key policy decisions and advocacy positions.
Delivery of these policy and advocacy positions and external input and engagement is aligned via:
• Government Relations in respect of political and government processes, to inform development of positions adapted to local circumstances. The Government
Relations group also coordinates the relevant advocacy, ensuring alignment with other Shell advocacy goals at local and national level.
• Investor Relations in respect of investor perspectives, especially Socially Responsible Investors. The Investor Relations team also manages responses to investor
questions on this topic and provides periodic briefings to interested investors.
• External Relations in respect of media and wider public questions.
Further Information
General: Whenever we use the phrase “CO2” it means “CO2 equivalent” and covers other greenhouse gases (GHG).
Page: CC3. Targets and Initiatives
CC3.1
Did you have an emissions reduction or renewable energy consumption or production target that was active (ongoing or reached completion) in
the reporting year?
13
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Absolute target
CC3.1a
Please provide details of your absolute target.
ID
Scope
% of
emissio
ns in
scope
%
reduction
from base
year
Base
year
Base year
emissions
covered by
target (metric
tonnes CO2e)
Targe
t year
Is this a
sciencebased
target?
Abs1
Scope
1
5%
25%
2014
3400000
2020
Don't
know
Abs2
Scope
1
17%
38%
2014
13000000
2030
Don't
know
CC3.1e
Comment
The Quest Carbon Capture and Storage (CSS) Project began
operations in late 2015. The project is located at the Scotford
Upgrader in Alberta Canada and is designed to capture, transport and
store over one million tonnes of CO2 annually. In 2015, the project
captured 370,000 tonnes of CO2 emissions from the site´s Scotford
Upgrader. See also information with "Further Information".
In 2015, flare reductions were achieved across Shell Upstream. Two
significant abatement projects, Majnoon FCP Sweet Train 1 (Iraq) and
Gumusut-Kakap (GK) (Malaysia) gas reinjection, started operation in
Q4/2015. Nigeria operations also achieved flaring reductions through
operational improvements and portfolio divestment, and the Pearl Gas
to Liquids Facility (QSGTL) (Qatar) installed some flare reduction
improvements during the year. Majnoon FCP Sweet Train 1 and
Gumusut-Kakap gas re-injection started up towards the end of the
year, and planned flare reduction projects in Nigeria were delayed
due to a variety of constraints. In total, this resulted in absolute
emissions from flaring, and reducing to 11.8 million t/yr CO2e in 2015.
The reducing trend in flaring is expected to continue, flare milestones
are planned for 2016 and tracked quarterly. Flare intensity targets are
also set and reported.
For all of your targets, please provide details on the progress made in the reporting year.
ID
Abs1
%
complete
(time)
9%
% complete
(emissions or
renewable
energy)
38%
Comment
Quest, at the Athabasca Oil Sand Project in Alberta, Canada, is the first use of CCS on an industrial scale in an oil
sands operation. The project started operating in August 2015 and captured 370,000 tonnes of CO2 emissions from
the site´s Scotford Upgrader in 2015. 2016 will be the first year of full operation and the facility will deliver on going
reductions to 2025 and beyond.
14
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
ID
Abs2
CC3.2
%
complete
(time)
6%
% complete
(emissions or
renewable
energy)
9%
Comment
Two significant abatement projects involving gas reinjection started operation in Q4 2015; one in Malaysia and one in
Iraq. Nigeria achieved flaring reductions through operational improvements and portfolio divestment and Pearl (Qatar)
installed some improvements during the year. In total, this resulted in absolute emission from flaring falling to 11.8
million t/yr CO2e, compared with flaring emissions of 13.0 million t/yr CO2e in 2014.
Do you classify any of your existing goods and/or services as low carbon products or do they enable a third party to avoid GHG emissions?
Yes
CC3.2a
Please provide details of your products and/or services that you classify as low carbon products or that enable a third party to avoid GHG
emissions.
Level of
aggregation
Product
Product
Description of product/Group of products
Shell's CANSOLV technology has been licenced to SaskPower. It
enables capturing the carbon dioxide (CO2) and sulphur dioxide (SO2)
at SaskPower’s new world-scale carbon capture and storage (CCS)
project in Saskatchewan, Canada. The SaskPower facility at the
Boundary Dam Power Station is expected to capture around 1 million
tonnes of CO2 per year, which is up to 90% of CO2 emissions from
one train of the power plant. It is the first commercial-scale postcombustion carbon capture system at a coal-fired power plant in the
world. The Shell CANSOLV technology uses re-generable aqueous
amine solutions to capture the SO2 and CO2, making the process
more cost-effective and minimising environmental waste.
Shell Shipping & Maritime Services group is providing commercial,
ship management and technology services to customers, both inside
Are you
reporting
low carbon
product/s or
avoided
emissions?
Taxonomy,
project or
methodology
used to
classify
product/s as
low carbon or
to calculate
avoided
emissions
%
revenue
from low
carbon
product/s
in the
reporting
year
% R&D in
low
carbon
product/s
in the
reporting
year
Comment
Avoided
emissions
Avoided
emissions
15
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Level of
aggregation
Product
Product
Product
Product
Group of
products
Description of product/Group of products
and outside of Shell. The 2014 savings previously disclosed are no
longer tracked as initiatives as these are now incorporated in to day to
day operations. Savings in 2015 have come through active fuel
management, live interventions on operations to ensure the most
efficient ways of working and utilising the natural environment such as
ocean currents and prevailing winds in order to route our vessels most
effectively. In 2015, approximately $35mln in fuel savings were
realized by replicating learnings from the previous year. In 2015, these
measures reduced fuel consumption by 3-5%, which translates to
savings of approx. 161,000 tonnes of fuel (equals approx. 365,000
tonnes of CO2).
The Basrah Gas Company (BGC, Shell interest 44%), in the south of
Iraq captures gas from oil fields operated by other companies which
would otherwise be flared. The gathered gas is used by a power plant
for domestic power generation.
A range of more efficient regular priced fuels (Shell FuelSave Diesel /
Shell FuelSave Unleaded petrol) have been developed. Shell
FuelSave is now available in all major Shell markets (excl. USA).
Launched to the mass market category of main grade fuels (as distinct
from premium fuels) this product is available at no extra costs and at
all Shell stations in countries where this product has been launched.
A Fuel Economy Diesel formulation targeted at heavy-duty vehicles is
now available in most markets outside USA.
Use of LNG for Transport: LNG is a fuel for heavy-duty road transport
and shipping; it can be used as an alternative transport fuel to diesel
and heavy fuel oil. For our own operations, since 2015, Shell has been
operating 2 offshore supply vessels for our deep-water operations in
the Gulf of Mexico, mainly running on LNG.
Shell entered the onshore wind business in the USA in 2001. We
currently have interests (50%) in eight onshore wind power projects in
North America and offshore project in the Netherlands. Our share of
Are you
reporting
low carbon
product/s or
avoided
emissions?
Taxonomy,
project or
methodology
used to
classify
product/s as
low carbon or
to calculate
avoided
emissions
%
revenue
from low
carbon
product/s
in the
reporting
year
% R&D in
low
carbon
product/s
in the
reporting
year
Comment
Avoided
emissions
Avoided
emissions
Avoided
emissions
Avoided
emissions
Low carbon
product
16
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Level of
aggregation
Product
Product
Product
Group of
products
Description of product/Group of products
the energy capacity from these projects is about 500 megawatts. Shell
Technology Ventures has invested in 2-B Energy, a renewable energy
company, to support its two-blade turbine wind technology and reduce
the cost of offshore wind power.
For the road construction sector, we developed Shell Thiopave. This
product enables a proportion of bitumen in the asphalt mix to be
replaced with sulphur, resulting in a stronger mix enhancing road load
bearing capacity and has a reduced application temperature. As a
result of this product for every tonne of sulphur sold, 0.7 tonnes of
CO2 emissions are avoided (Source: Internal Lifecycle Calculations).
Shell has developed a technology called Thiogro that is available
under technology license to incorporate micron-sized particles of
elemental Sulphur within widely used phosphate fertilizers, enabling
increased agricultural yield and reduced net CO2 emissions. New
licenses have been awarded to key partners in India and Australia to
physically produce and distribute the product in market.
Shell is part of a joint venture in Germany which intends to invest in
some 390 hydrogen retail sites, 230 of which would be Shell-branded.
At the end of 2015 we operated three hydrogen filling stations in
Germany and have two hydrogen filling stations in Los Angeles,
California. We are assessing the potential for similar projects in the
USA, UK, Switzerland, Austria, France, Belgium, Luxembourg and the
Netherlands.
Efficient fuels: Shell supplies fuels to millions of drivers around the
world every day. For more than a century, our scientists have worked
to develop high-quality products to improve the driving experience and
energy efficiency of our customers. For example, Shell FuelSave
Diesel contains ingredients designed to improve the combustion
process in vehicle engines. This, in turn, can boost efficiency and help
drivers save fuel. Shell FuelSave Diesel has helped reduce the carbon
footprint of business customers in the bus, coach, construction and
Are you
reporting
low carbon
product/s or
avoided
emissions?
Taxonomy,
project or
methodology
used to
classify
product/s as
low carbon or
to calculate
avoided
emissions
%
revenue
from low
carbon
product/s
in the
reporting
year
% R&D in
low
carbon
product/s
in the
reporting
year
Comment
Avoided
emissions
Avoided
emissions
Low carbon
product
Low carbon
product
17
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Level of
aggregation
Product
CC3.3
Description of product/Group of products
trucking sectors.
Advanced lubricants: The lubricants we produce for motorists and
commercial vehicles are designed to increase engine efficiency and
reduce fuel consumption. Shell is one of the largest investors in
research and development (R&D) among international oil and gas
companies and employs more than 200 scientists and engineers in
lubricants R&D. Our technology centre in Shanghai, China, researches
motor oils for passenger cars, heavy-duty engine oils and transmission
fluids for the Asian markets, while our marine power innovation centre
in Hamburg, Germany, develops lubricants for ships. Our Shell Rimula
range of heavy-duty engine oils was developed with leading engine
makers including Mercedes Benz. The oils help heavy-duty
commercial vehicle operators improve the fuel economy of their fleets,
while providing extra protection against wear in the vehicle engine. We
also produce high-quality engine lubricants which can improve the fuel
efficiency of passenger cars and motorcycles. These include products
manufactured using Shell PurePlus Technology that applies the GTL
process to produce a clear base oil. This has much lower levels of
impurities than other base oils and can help improve performance.
Are you
reporting
low carbon
product/s or
avoided
emissions?
Taxonomy,
project or
methodology
used to
classify
product/s as
low carbon or
to calculate
avoided
emissions
%
revenue
from low
carbon
product/s
in the
reporting
year
% R&D in
low
carbon
product/s
in the
reporting
year
Comment
Avoided
emissions
Did you have emissions reduction initiatives that were active within the reporting year (this can include those in the planning and/or
implementation phases)?
Yes
CC3.3a
Please identify the total number of projects at each stage of development, and for those in the implementation stages, the estimated CO2e
savings.
18
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Stage of development
Under investigation
To be implemented*
Implementation commenced*
Implemented*
Not to be implemented
CC3.3b
Number of projects
90
159
44
65
80
Total estimated annual CO2e savings in metric tonnes
CO2e (only for rows marked *)
650000
410000
1303000
For those initiatives implemented in the reporting year, please provide details in the table below.
Activity
type
Process
emissions
reductions
Description of
activity
At the Scotford
Upgrader in Alberta,
Canada, the Quest
Carbon Capture and
Storage project
commenced in
August 2015,
capturing CO2 and
storing it safely
underground.
Estimated
annual
CO2e
savings
(metric
tonnes
CO2e)
850000
Scope
Scope
1
Annual
monetary
savings
Voluntary/
(unit
Mandatory
currency
- as
specified
in CC0.4)
Voluntary
20000000
Investment
required
(unit
currency as
specified in
CC0.4)
1400000000
Payback
period
>25
years
Estimated
lifetime of
the
initiative
Comment
6-10 years
The Quest CCS demonstration
project obtained financial support
through grants which broadly
covered project capex. "Double"
credits are awarded to cover
operational costs for the
contractual life of the project. The
contractual lifetime is 10 years. The
investment of the project was
$1,400,000,000. The investment
included the capital, feasibility, and
forecast operational costs over the
10 years of the project. The
investment is in USD for 2012
when the exchange rates were
equal. Annual monetary savings is
calculated for a full year at
$15CAD/tonne a CO2 credit and
incorporating the double credit
scheme and converted to US$ at
the 2015 exchange rate of 0.783.
19
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
CC3.3c
What methods do you use to drive investment in emissions reduction activities?
Method
Other
Internal price
of carbon
Comment
We have put in place internal abatement targets, and implemented planning and performance management to assure target delivery. These
efficiency programmes have implemented the following abatement capacities: 1.6 million t/yr CO2e by year end 2009, 1.97 million t/yr CO2e by
year end 2010, 1.5 million t/yr CO2e by year end 2011, 1.92 million t/yr CO2e by year end 2012, 0.85 million t/yr CO2e by year end 2013, 0.76
million t/y CO2e for 2014 and 1.3 million t/y CO2e for 2015; this is for a total abatement capacity of 9.9 million tonnes CO2e for 2009 - 2015. For
long range planning, Shell disaggregates its portfolio into a series of strategic themes. These can be concentrated in one business (e.g. heavy
oil) or spread across several (e.g. integrated gas). Each of the themes has a 2030 CO2 intensity aspiration and have road-map based plans, with
a granulated review of CO2 related risks and opportunities to show the activities needed to achieve the guiding aspiration. Achieving the
aspirations does incentivise investment in mitigation technologies or processes.
We apply a GHG project screening value at $40 a tonne. This is a guide that is used in all our investment decisions.
This figure was disclosed on page 15 of our 2015 Sustainability Report.
Further Information
CC3.3a: We understand that the “total estimated annual CO2e savings” for implemented projects is expected to be disclosed in this table. However, we did not
include the estimated but the actual CO2e savings in the reporting year 2015.
General:
As advised in 2013, 2014 and 2015, we have internal targets and plans in place relating to energy efficiency and GHG reductions across our businesses. These
internal measures, which span our diverse portfolio of business activities, cannot easily be converted into a global target on a company-wide basis. While we only
supply 1% of the world-wide energy supply and 2% of global oil and gas, we continue to try and be a progressive voice in the industry, advocating pragmatic
measures in the global discussion on energy and tackling climate change. Government-led carbon-pricing is a case in point. However, we recognise we need to play
our part too, which is why we intend to reduce our carbon intensity ahead of global movements.
Carbon intensity, and potential changes in carbon prices and the regulatory environment all have an important role to play when we look at how we want to shape
our portfolio for the future. While we seek to enhance our operations’ average energy intensity through both the development of new projects and divestments, we
have no immediate plans to move to a net-zero emissions portfolio over our investment horizon of 10-20 years.
CDP has introduced the concept of “science based targets” in the 2016 Climate Change questionnaire. This is a concept that is based on presentations from its
owners, Ecofys. Shell does not yet consider it practical. It is still incomplete and has material gaps, e.g. regarding its industry coverage and its omission of land use
changes. The model also restricts itself to the largest category of companies and thereby fails to include emissions of other organisations. Other weaknesses are
such as the rigid use of only one model profile of a 2°C outcome, not considering developments beyond 2050 and at detailed level, only as one example, double
counting power related GHG emissions from both generators and users in the form of the latter´s scope 2 emissions.
Page: CC4. Communication
CC4.1
Have you published information about your organization’s response to climate change and GHG emissions performance for this reporting year in
places other than in your CDP response? If so, please attach the publication(s).
20
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Publication
Status
In mainstream
reports (including
an integrated
report) but have not
used the CDSB
Framework
Complete
In voluntary
communications
Complete
In voluntary
communications
Complete
Page/Section reference
Royal Dutch Shell plc Annual
Report 2015: page6/Chairman´s
message, p8-12/Risk Factors,
p15/Strategy and Outlook,
p54Climate Change, p56/GHG
emissions performance absolute
and intensity
Royal Dutch Shell plc
Sustainability Report 2015:
page1/Introduction from CEO,
p11/Energy Future,
p13/Addressing Climate Change,
p18/Research and Development,
p19/Carbon Capture and Storage,
p20/Lower Carbon alternatives,
p27/Managing Methane
Emissions, p28/Flaring,
p34/Environment,
p45/Collaborations, p48/Economic
Performance, p52/Environmental
Data
Shell Canada Oil Sands
Performance Report 2015: page56/Air (Greenhouse Gases)
In voluntary
communications
Complete
Socially Responsible Investors
Briefing London, 11 May 2016,
Slides 11-12, 20-36, 45-46, 55-56
In voluntary
communications
Complete
Royal Dutch Shell plc: Shell:
Energy Transitions and Portfolio
Resilience (2016)
Attach the document
Comment
https://www.cdp.net/sites/2016/12/16012/Climate Change
2016/Shared
Documents/Attachments/CC4.1/entire_shell_ar15.pdf
https://www.cdp.net/sites/2016/12/16012/Climate Change
2016/Shared
Documents/Attachments/CC4.1/entire_shell_sr15.pdf
https://www.cdp.net/sites/2016/12/16012/Climate Change
2016/Shared Documents/Attachments/CC4.1/she-2055oil-sands-performance-report-2015-final1.pdf
https://www.cdp.net/sites/2016/12/16012/Climate Change
2016/Shared Documents/Attachments/CC4.1/sri-shelllondon-11-may-2016-presentation-slides.pdf
https://www.cdp.net/sites/2016/12/16012/Climate Change
2016/Shared Documents/Attachments/CC4.1/shellenergy-transitions-and-portfolio-resilience.pdf
These are the presentation
slides used at the Annual
Roundtable for Socially
Responsible Investors held
on May 11, 2016.
In this report, we seek to
address the question how
Shell is positioned for the
changes to come: Shell´s
approach and portfolio
resilience to the energy
transition, and our strategy to
succeed through changing
times. We describe the key
drivers in the energy mix and
21
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Publication
In voluntary
communications
Status
Complete
Page/Section reference
Royal Dutch Shell plc: A better life
with a healthy planet - pathways to
net-zero emissions; A New Lens
Scenarios supplement (2016)
Attach the document
https://www.cdp.net/sites/2016/12/16012/Climate Change
2016/Shared Documents/Attachments/CC4.1/a-better-lifewith-a-healthy-planet.pdf
Comment
set out how Shell is investing
in low-carbon energy - "new
energy" - while reflecting on
the wide range of business
choices we can make until
2035, and beyond.
This report is a supplement
to the Shell New Lens
Scenarios published in 2013.
We distil what we have
learned so far in an attempt
to answer the question: how
could the energy system
evolve from now to provide
"a better life for all with a
healthy planet?"
Module: Risks and Opportunities
Page: CC5. Climate Change Risks
CC5.1
Have you identified any inherent climate change risks that have the potential to generate a substantive change in your business operations,
revenue or expenditure? Tick all that apply.
Risks driven by changes in regulation
Risks driven by changes in physical climate parameters
Risks driven by changes in other climate-related developments
CC5.1a
Please describe your inherent risks that are driven by changes in regulation.
22
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Risk driver
General
environmental
regulations,
including
planning
Description
Rising climate
change concerns
could lead to
additional
regulatory
measures, such
as explicit and
implicit GHG
policies deployed
globally. If we
are unable to
find economically
viable, as well as
publicly
acceptable,
solutions that
reduce our GHG
emissions and/or
GHG intensity for
new and existing
projects or
products, we
could experience
additional costs
or financial
penalties,
delayed or
cancelled
projects.
Potential
impact
Other:
Project
delays
Timeframe
>6 years
Direct/
Indirect
Direct
Likelihood
About as
likely as
not
Magnitude
of impact
High
Estimated
financial
implications
Management
method
Cost of
management
As disclosed in
Shell’s Energy
Transition and
Portfolio
Resilience report
(page 33), on a
2015 basis, a
$10/tonne CO2
movement in
global CO2
price, will impact
Shell earnings in
the region of
$400 million.
There is
continued and
increased
attention to
climate change
from all sectors
of society. This
attention has led,
and we expect it
to continue to
lead, to
additional
regulations
designed to
reduce GHG
emissions.
Furthermore, we
expect that a
growing share of
our GHG
emissions will be
subject to
regulation. If our
GHG emissions
Shell has a
rigorous approach
to understanding,
managing and
mitigating climate
risks in our
assets. We reflect
future regulatory
costs by typically
applying a
common
$40/tonne project
screening value
(PSV) to the GHG
emissions
associated with
investments. This
incentivizes
investments in
GHG abatement,
highlights projects
with the most
exposure to rising
carbon prices and
helps screen
early-stage
opportunities. We
have GHG and
energy
management
plans at key sites
to illustrate and
identify potential
ways to reduce
GHG emissions.
High-emitting
projects undergo
additional
Cost of
management for a
single topic may
miss out on the
complexity of
shaping
sustainable
operations.
Relevant teams
are involved on
working on wide
and varied CO2
related activities,
such as
supporting the
implementation of
our policies within
the business.
Furthermore, our
business strategy
supports:
supplying more
natural gas,
helping to develop
CCS, improving
energy efficiency
in our operations
and investing in
new low carbon
energies including
biofuels and
hydrogen, solar
and wind.
By way of
example only:
Shell’s capital
employed in new
energies activities
23
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Risk driver
Description
Potential
impact
Timeframe
Direct/
Indirect
Likelihood
Magnitude
of impact
Estimated
financial
implications
rise alongside
our ambitions to
increase the
scale of our
business, our
regulatory
burden will
increase
proportionally.
Cap and trade
schemes
Several
countries that
are important
operating areas
for Shell are in
the process of
developing
additional
climate change
legislation which
may include the
use of emissions
Increased
operational
cost
1 to 3
years
Direct
Virtually
certain
Lowmedium
Phase III of the
EU Emissions
Trading System
(ETS) will see
facilities having
to buy at auction
an increasing
percentage of
allowances for
compliance. In
2015, cost of
compliance was
Management
method
Cost of
management
sensitivity testing.
This can lead to
projects being
stopped, designs
being changed,
and potential
GHG mitigation
investments being
identified, in
preparation for
when regulations
would make these
investments
commercially
compelling. Such
considerations,
for example,
influenced Shell’s
decision to invest
in a gas-gathering
system to reduce
our flaring
activities at the
Majnoon field in
Iraq.
Shell has a
rigorous approach
to understanding,
managing and
mitigating climate
risks in our
assets. We reflect
future regulatory
costs by typically
applying a
common
$40/tonne project
today is some
$1.7 billion and
we are estimating
spend of around
$200 million in
2016 on exploring
and developing
new opportunities.
It is not possible
to come up with
specific costs of
management, as
the relevant
teams are also
involved in many
other CO2 related
activities, such as
supporting the
implementation of
our policies within
24
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Risk driver
Description
trading systems
and carbon
taxes, which
could potentially
increase
compliance costs
for Shell. These
include EU
members, USA,
Japan, and
Canada.
Potential
impact
Timeframe
Direct/
Indirect
Likelihood
Magnitude
of impact
Estimated
financial
implications
€5-6/tonne of
CO2. Several
countries (e.g.
USA) are
developing
climate change
legislation which
will introduce
CO2 costs and
impact financial
performance.
Management
method
Cost of
management
screening value
(PSV) to the GHG
emissions
associated with
investments. This
incentivizes
investments in
GHG abatement,
highlights projects
with the most
exposure to rising
carbon prices and
helps screen
early-stage
opportunities. We
have greenhouse
gas and energy
management
plans at key sites
to illustrate and
identify potential
ways to reduce
GHG emissions.
Across all our
Upstream and
Downstream
operations, we
strive for
improved energy
efficiency to help
reduce Shell’s
overall GHG
emissions, and
compliance costs.
For example, in
2015, we installed
a cogeneration
unit at our Bukom
the business. We
consider a project
screening value of
CO2 emissions at
$40/tonne. This is
a guide that is
used in all our
investment
decisions. Our
business strategy
supports:
supplying more
natural gas,
helping to develop
CCS; producing
low-carbon
energy including
biofuels and
improving energy
efficiency in
operations. One
example of a cost
of management is
installing
cogeneration. The
economics of
cogeneration
activities are
variable and
highly dependent
on local electricity
prices. As such, it
can provide
effectively
negative
abatement costs
(where the
installation is
25
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Risk driver
Product
efficiency
regulations
and standards
Description
Various national,
regional and
state based low
carbon fuel
directives and
targets such as:
Low Carbon Fuel
Standards and
Renewable Fuel
mandates in the
European Union
and USA mean
that new fuels
must be
developed and
brought to
market in order
to comply with a
variety of
programmes.
This may change
the cost structure
of Shell´s
operations
Potential
impact
Other:
Adverse
change the
cost
structure of
the
business
against
uncertainty
in fuel
prices.
Timeframe
1 to 3
years
Direct/
Indirect
Indirect
(Supply
chain)
Likelihood
Virtually
certain
Magnitude
of impact
Lowmedium
Estimated
financial
implications
Several
countries (e.g.
USA) have
developed
(additional)
climate
legislation which
includes product
efficiency
standards
including the
Low Carbon Fuel
Standard in
California. Such
developments
may introduce
new CO2 costs
to our
businesses, e.g.
the costs of
LCFS credit and
average price for
2015 was $62
per credit; which
Management
method
Cost of
management
refinery in
Singapore. This
unit improves
energy efficiency
by recovering
waste heat from
the gas turbine’s
exhaust to
generate steam.
profitable), or high
abatement costs
(where it
represents a net
cost); e.g.
external analysis
from McKinsey
show cost of
cogeneration for
Downstream
assets estimated
around €10/
tCO2.
It is not possible
to come up with
specific costs of
management, as
the relevant
teams are also
involved in many
other GHG
related activities,
such as
supporting the
implementation of
our policies within
the business. Our
business strategy
supports:
supplying more
natural gas,
producing lowcarbon energy
including biofuels,
implementing
energy-efficiency
measures in our
To test the
resilience of new
projects, we
assess potential
costs associated
with GHG
emissions when
evaluating all new
investments. Our
approach applies
a uniform project
screening value
(PSV) of $40 (real
terms) per tonne
of carbon dioxide
(CO2) equivalent
to the total GHG
emissions of each
investment. This
PSV is generally
applied when
evaluating our
new projects
around the world
26
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Risk driver
Description
against
uncertainty in
fuel prices.
Potential
impact
Timeframe
Direct/
Indirect
Likelihood
Magnitude
of impact
Estimated
financial
implications
therefore might
impact our
financial
performance.
Management
method
Cost of
management
to test their
resilience across
a range of future
scenarios. The
project
development
process features
a number of
checks that may
require
development of
detailed GHG and
energy
management
plans. Highemitting projects
undergo
additional
sensitivity testing,
including the
potential for future
CCS projects. As
another example,
we evaluate
options to
integrate
readiness for
CCS into the
design of our new
projects. For
example, this was
the case at our
Scotford
Upgrader in
Alberta, Canada,
which is now the
site of our Quest
CCS facility.
operations where
reasonably
practical and
helping to develop
CCS. An example
of the costs of
management
includes the cost
of Quest. Quest
has an estimated
cost of $1.35
billion. The
provincial
government of
Alberta and
federal
government of
Canada have
provided C$865
million to support
the development
of Quest.
27
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Risk driver
General
environmental
regulations,
including
planning
Description
Carbon Capture
and Storage
technology
needs to move
rapidly from
demonstration to
deployment to
play an important
role in reducing
global CO2
emissions, like
the Quest project
in Canada in
which Shell is
involved.
However, policy
support for this
mitigation
technology has
been limited,
which could
potentially
increase future
CCS project
Potential
impact
Other:
Uncertainty
for Shell
about the
CCS
investment
required in
the future
while policy
support is
limited
Timeframe
>6 years
Direct/
Indirect
Direct
Likelihood
Very likely
Magnitude
of impact
Medium
Estimated
financial
implications
The IEA states
that the level of
investment
required to tackle
climate change
could rise by as
much as 40% at
the global level if
CCS is not
deployed as a
central measure.
However, CCS is
not yet a
commercial
technology and
is entirely driven
by climate
change.
Therefore there
is the risk that
CCS will remain
a high cost policy
option if there is
no support for
Management
method
Cost of
management
Since the start-up
of the Quest CCS
in 2015, the GHG
intensity of Shell’s
oil sands
operation has
decreased. These
emissions are
now closer to the
average GHG
emissions of
North American
oil.
Shell is playing a
leading role in the
demonstration of
CCS technology.
This, we believe,
is the only
currently available
technology that
can significantly
reduce CO2
emissions from
industrial sectors
of the economy.
In November
2015, Shell’s
Quest CCS
project officially
opened at our oil
sands operations
in Canada. It can
capture and store
more than 1
million tonnes of
CO2 each year.
CCS projects
require significant
capital, technical
and personnel
resources. In
2012, Shell began
construction of
Quest CCS
project in Canada.
Quest started
operating in 2015.
At full capacity it
can capture and
store more than 1
million tonnes of
CO2 each year –
equivalent to the
emissions from
about 250,000
cars. In 2015,
since its start-up,
Quest has
reduced CO2
emissions by 0.32
28
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Risk driver
Description
costs. Further
support is
needed to deploy
the technology in
a way that
reduces its costs
and builds public
acceptance.
Potential
impact
Timeframe
Direct/
Indirect
Likelihood
Magnitude
of impact
Estimated
financial
implications
wide-spread
demonstration
programme,
where learningby-doing is
expected to bring
down the costs.
The IPCC Fifth
Assessment
Report
demonstrated
the importance
of CCS. It states
that without CCS
the cost of
achieving a 2°C
scenario will be
around 138%
higher.
Management
method
Cost of
management
The CO2 will be
safely stored
more than two
kilometres
underground. We
are involved in
the Gorgon CO2
injection project in
Australia, the
CCS test centre
in Mongstad,
Norway, and the
Qatar Carbonates
and Carbon
Storage Research
Centre in London,
UK. In addition,
we have
technology that
can remove both
CO2 and sulphur
dioxide from
industrial flue
gases. Shell
Cansolv
technology is
being used at the
Saskpower
Boundary Dam
coal-fired power
plant in Canada.
mln tonnes (Shell
Canada, Oil
Sands Report
2015); Quest has
an estimated cost
of US$1.35 billion.
The provincial
government of
Alberta and
federal
government of
Canada have
provided C$865
million to support
the development
of Quest. Gorgon
LNG project (25%
Shell share) is
expected to store
3-4 million tonnes
of CO2 per year.
In early 2014,
Shell signed an
agreement to
progress the
design of
Peterhead, which
could have
potentially
captured up to 10
million tonnes of
CO2 over 10
years.
Unfortunately, the
UK government
withdrew potential
funding in late
2015, and the
29
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Risk driver
Description
Potential
impact
Timeframe
Direct/
Indirect
Likelihood
Magnitude
of impact
Estimated
financial
implications
Management
method
Cost of
management
project did not
proceed.
CC5.1b
Please describe your inherent risks that are driven by changes in physical climate parameters.
Risk
driver
Change
in mean
(averag
e)
tempera
ture
Descripti
on
Increased
local air
temperatu
res that
could
impact
Shell’s
plants
efficiency.
Potential
impact
Increased
operational
cost
Timefr
ame
>6
years
Dire
ct/
Indir
ect
Direc
t
Likelih
ood
More
likely
than
not
Magnit
ude of
impact
Mediu
m
Estimated financial
implications
Management method
Cost of management
Increase in air temperature could
affect the efficiency of our plants.
Financial implications include:
increased operating costs and
decreased revenue from loss of
efficiency. For example, a
detailed study was undertaken by
Entergy (USA) (supported by
Swiss Re, America´s Wetland
Foundation and America´s
Energy Coast) on the costs and
benefits of adaptation in the
energy sector on the US Gulf
Coast. The annual average
expected loss for O&G sector in
2030 under an ‘average’ climate
scenario is $6.9 billion - due to
wind/rain, surge/flood and
business interruption. Entergy
study:
http://www.entergy.com/content/o
ur_community/environment/GulfC
oastAdaptation/report.pdf
Physical impacts of
climate change, such as
rising sea levels and
changes in ambient
operating temperatures,
tend to be location and
asset type specific. Within
our Projects and
Technology organisation
we employ a Metocean
team focused on the
physical climate impacts
and adaptation aspects.
This team conducts
assessments of future
climate conditions such
as the Regional
Temperature Increase
Review (2030-2050).
Shell’s project design
standards are revised on
an ongoing basis to take
account of climate
change influences. The
most vulnerable existing
assets, designed under
previous standards, are
A more
comprehensive
physical impact of
climate change risk
review and integration
together with an
adaptation
assessment is being
carried out at a total
cost of around US$1
million. We are
undertaking screening
of specific existing
assets and new
projects and then work
with a sample of the
affected asset
managers to develop
response plans. This
work is expected to be
completed over the
next few years, at the
end of which we will
have a clearer, more
robust understanding
of the associated risks
and costs.
30
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Risk
driver
Sea
level
rise
Descripti
on
Global:
rising sea
levels
could
impact
Shell’s
coastal
facilities
(e.g.
refineries,
ports,
terminals
etc.) and
our
offshore
platforms.
Potential
impact
Reduction/di
sruption in
production
capacity
Timefr
ame
>6
years
Dire
ct/
Indir
ect
Direc
t
Likelih
ood
More
likely
than
not
Magnit
ude of
impact
Mediu
m
Estimated financial
implications
Rising sea levels could impact
coastal facilities as events such
as floods, related to storm
surges, could become more
frequent. In recent years, storm
surges associated with
hurricanes have resulted in
refinery shutdowns in the US Gulf
Coast for some companies
including Shell. Financial
implications include: increased
capital cost from future design
requirement, increased operating
costs from loss of efficiency and
decreased revenue from
shutdowns and reduced
production. For example, a
detailed study was undertaken by
Entergy (USA) (supported by
Swiss Re, America´s Wetland
Management method
Cost of management
identified and any
adaptation plans will be
integrated into Shell
existing procedures and
processes such as the
asset reference plans that
guide their ongoing
maintenance schedules.
Case study: to better
understand temperature
impacts on plant
efficiency a case study
was conducted to analyse
the impacts of projected
temperature increase
impacts on Shell’s Pernis
refinery in 2030s and
2050s.
Physical impacts of
climate change, such as
rising sea levels and
changes in ambient
operating temperatures,
tend to be location and
asset type specific.
Physical impacts of
climate change, such as
rising sea levels and
changes in ambient
operating temperatures,
tend to be location and
asset type specific.
Within our Projects and
Technology organisation
we employ a Metocean
team who focuses on the
physical climate impacts
and adaptation aspects.
A more
comprehensive
physical impact of
climate change risk
review and integration
together with an
adaptation
assessment is being
carried out at a total
cost of around $1
million. We are
undertaking screening
of specific existing
assets and new
projects and then work
with a sample of the
affected asset
managers to develop
response plans. This
work is expected to be
31
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Risk
driver
Descripti
on
Potential
impact
Timefr
ame
Dire
ct/
Indir
ect
Likelih
ood
Magnit
ude of
impact
Estimated financial
implications
Foundation and America´s
Energy Coast) on the costs and
benefits of adaptation in the
energy sector on the US Gulf
Coast. The annual average
expected loss for O&G sector in
2030 under an ‘average’ climate
scenario is $6.9 billion - due to
wind/rain, surge/flood and
business interruption.
Change
in
precipit
ation
Global:
Changes
in the
global
Reduction/di
sruption in
production
capacity
>6
years
Direc
t
About
as
likely
as not
Mediu
m-high
Changes in the global
hydrological cycle could cause
flooding and make access to
suitable quantities of water to run
Management method
Cost of management
This team conducts
assessments of future
climate conditions. An
example of a study is the
Global Sea Level Rise
Review (2030-2050). As
this team influences
ongoing engineering
design standards, our
new projects’ resilience is
always based on the
latest climate science
outlook. The ongoing
challenge is retrofitting
existing assets, already in
production while climate
views have altered or will
alter Shell’s project
design standards are
revised on an ongoing
basis to take account of
climate change
influences. The most
vulnerable existing
assets, designed under
previous standards, are
identified and any
adaptation plans will be
integrated into Shell
existing procedures and
processes such as the
asset reference plans that
guide their ongoing
maintenance schedules.
Within our Projects and
Technology organisation
we employ a Metocean
team focused on the
completed over the
next few years, at the
end of which we will
have a clearer, more
robust understanding
of the associated risks
and costs.
A more
comprehensive
physical impact of
climate change risk
32
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Risk
driver
Descripti
on
extreme
s and
drought
s
hydrologic
al cycle
could
impact
Shell’s
assets,
for
example
by
causing
flooding,
or making
access to
suitable
quantities
of water
to run a
particular
facility
problemat
ic.
Tropical
cyclone
s
(hurrica
nes and
typhoon
s)
Tropics:
changes
in sea
temperatu
re could
affect
future
tropical
cyclones.
Example:
hurricane
Katrina
disrupted
Shell’s
Potential
impact
Reduction/di
sruption in
production
capacity
Timefr
ame
>6
years
Dire
ct/
Indir
ect
Direc
t
Likelih
ood
More
likely
than
not
Magnit
ude of
impact
Mediu
m
Estimated financial
implications
a particular facility problematic.
Financial implications include:
increased capital cost from future
design requirement, increased
operating costs and decreased
revenue from shutdowns and
reduced production. For example,
a detailed energy study was
undertaken by Entergy (USA)
(supported by Swiss Re,
America´s Wetland Foundation
and America´s Energy Coast) on
the costs and benefits of
adaptation in the energy sector
on the US Gulf Coast. The
annual average expected loss for
O&G sector in 2030 under an
‘average’ climate scenario is $6.9
billon - due to wind/rain,
surge/flood and business
interruption. Entergy study:
http://www.entergy.com/content/o
ur_community/environment/GulfC
oastAdaptation/report.pdf
Changes in sea temperature
could affect the intensity and
frequency of future tropical
cyclones impacting assets.
Financial implications include:
increased capital cost from future
design requirement, increased
operating costs and decreased
revenue from shutdowns and
reduced production. For
example, a detailed study was
undertaken by Entergy (USA)
(supported by Swiss Re,
America´s Wetland Foundation
Management method
Cost of management
physical climate impacts
and adaptation aspects.
This team conducts
assessments of future
climate conditions such
as Regional Increased
Precipitations Review
(2030-2050). We conduct
water risk assessments.
We have also responded
to events and will
continue to do so, thereby
improving the overall
integrity of our operations
and addressing this risk.
review and integration
together with an
adaptation
assessment is being
carried out at a total
cost of around $1
million. We are
undertaking screening
of specific existing
assets and new
projects and then work
with a sample of the
affected asset
managers to develop
response plans. This
work is expected to be
completed over the
next few years, at the
end of which we will
have a clearer, more
robust understanding
of the associated risks
and costs.
Within our Projects and
Technology organisation
we employ a Metocean
team focused on the
physical climate impacts
and adaptation aspects.
This team conducts
assessments of future
climate conditions such
as the South China Sea
Review (2030-2050). We
have also responded to
events and will continue
to do so, thereby
A more
comprehensive
physical impact of
climate change risk
review and integration
together with an
adaptation
assessment is being
carried out at a total
cost of around $1
million. We are
undertaking screening
of specific existing
assets and new
33
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Risk
driver
Descripti
on
Potential
impact
Timefr
ame
Dire
ct/
Indir
ect
Likelih
ood
Magnit
ude of
impact
operation
s in the
Gulf of
Mexico,
USA, and
led to
refitting of
some
platforms
and
changes
in
operation
s.
CC5.1c
Estimated financial
implications
and America´s Energy Coast) on
the costs and benefits of
adaptation in the energy sector
on the US Gulf Coast. The
annual average expected loss for
O&G sector in 2030 under an
‘average’ climate scenario is $6.9
billion - due to wind/rain,
surge/flood and business
interruption. Entergy study:
http://www.entergy.com/content/o
ur_community/environment/GulfC
oastAdaptation/report.pdf
Management method
Cost of management
improving the overall
integrity of our operations
and addressing this risk.
projects and then work
with a sample of the
affected asset
managers to develop
response plans. This
work is expected to be
completed over the
next few years, at the
end of which we will
have a clearer, more
robust understanding
of the associated risks
and costs.
Please describe your inherent risks that are driven by changes in other climate-related developments.
Risk
driver
Other
drivers
Description
The significant
investment and
changes that will
be required to
move to a low
carbon energy
world means that
governments,
businesses and
society all have a
significant part to
play. Changes
brought about by
the energy
transition (e.g.
Potential
impact
Other: Falling
sales revenue
and earnings
Direct/
Timeframe Indirect
>6 years
Direct
Likelihood
Very likely
Magnitu
de of
impact
Mediumhigh
Estimated
financial
implications
Shell has provided
earnings
Sensitivities on
potential impacts
of changing oil,
natural gas and
CO2 prices in the
Shell Energy
Transition and
Portfolio
Resilience report,
on page 33. On a
2015 basis, these
were as follows: a
$10/barrel
Management
method
Cost of
management
Our portfolio
exposure is
reviewed annually
against changing
GHG regulatory
regimes and
physical conditions
to identify
emerging risks. As
outlined in
"estimated
financial
implications", we
assess potential
costs associated
We are
positioning for the
energy transition
and a lower
carbon future in a
number of ways.
Managing our
own emissions,
investing in more
gas, the cleanest
out of the fossil
fuels which has a
major role to play
in the power
sector, and in the
34
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Risk
driver
Description
Oil, Gas and CO2
prices) will
require energy
suppliers like
Shell, needing to
adapt their
business models
or face lower
demand for
products and
potential
impairments to
some less energy
efficient assets.
This could have
material impact
on Shell’s
operational
performance,
earnings, cash
flows and
financial
condition.
Potential
impact
Direct/
Timeframe Indirect
Likelihood
Magnitu
de of
impact
Estimated
financial
implications
movement in Brent
prices - $3.3 billion
earnings impact, a
$1 per mmbtu
movement in
Henry Hub - $250
million earnings
impact $10/tonne
CO2 movement in
global CO2 price,
$400 million
earnings impact.
The IEA
developed the 450
Scenario that sets
out an energy
pathway
consistent with the
goal of limiting
average global
temperature
increase to 2°C.
Our preliminary
view, looking at
2030, is that the
aggregate impact
under the IEA’s
450 Scenario
would be more
positive overall for
us than our own
outlook. This is
primarily due to
the higher oil and
gas prices
assumed by the
IEA than in Shell’s
planning.
Management
method
Cost of
management
with GHG
emissions when
evaluating all new
investments,
testing resilience.
Our approach
applies a uniform
project screening
value (PSV) of
$40/t CO2e (real
terms) to the total
GHG emissions of
each investment
plus further
sensitivities where
CO2 risk is acute.
This PSV is
generally applied
to test projects´
resilience across a
range of scenarios.
This can lead to
projects being
stopped, designs
being changed,
and potential GHG
mitigation
investments being
identified. E. g., we
evaluate options to
integrate readiness
for CCS into the
design of new
projects (e.g.
Scotford Upgrader
in Alberta, Canada
site of Shell Quest
CCS facility).
longer term
investing in low
carbon energy
solutions which
we call new
energies. Shell’s
capital employed
in New Energies
activities is some
$1.7 billion today
and we are
estimating spend
of around $200
million in 2016 to
explore and
develop new
energies
opportunities.
35
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Risk
driver
Reputation
Description
In the future, in
order to help
meet the world’s
energy demand,
we will produce
more oil from
unconventional
sources.
Therefore it is
expected that the
CO2 intensity of
our production
will increase. If
we are unable to
find CO2
solutions for new
and existing
projects,
challenges from
society could lead
to project delays,
additional costs
and operational
risks.
Potential
impact
Wider social
disadvantages
Direct/
Timeframe Indirect
>6 years
Direct
Likelihood
About as
likely as
not
Magnitu
de of
impact
Mediumhigh
Estimated
financial
implications
The management
of GHG emissions
will become
increasingly
important as
concerns over
climate change
lead to tighter
environmental
regulations.
Policies and
regulations
designed to limit
the increase in
global
temperatures to
well below 2°C
could have a
material adverse
effect on us. If we
are unable to find
economically
viable, as well as
publicly
acceptable,
solutions that
reduce our GHG
emissions and/or
GHG intensity for
new and existing
projects or
products, we could
experience
additional costs or
financial penalties,
delayed or
cancelled projects,
and/or reduced
production and
Management
method
Cost of
management
Shell is
implementing a
New Energies
business and has
invested in
renewables, such
as wind, solar and
biofuels already for
many years. New
Energies goes
beyond traditional
renewables: the
theme spans the
digital revolution,
more electrification
especially in
transport, more
energy mix choices
for customers.
Shell seeks costeffective ways to
manage GHG
emissions and
explores potential
business
opportunities in
developing such
solutions. Main
GHG emission
reduction
contributions are in
four areas:
supplying more
natural gas to
replace coal for
power generation;
supplying biofuels;
progressing CCS
technologies;
a) We have a
CO2 and energy
management
programme that
includes
monitoring the
energy efficiency
of equipment.
b) We have
secured final
investment
decisions for CCS
projects, including
Mongstad and the
Gorgon LNG
project. The
Quest project has
an estimated cost
of $1.35 billion.
c) Over the past
six years, we
have invested
about $1.1 billion
in low-carbon
R&D. Shell’s
capital employed
in New Energy´s
activities today is
some $1.7 billion
and we are
estimating a
spend of around
$200 million in
2016 to explore
and develop
these new
opportunities. We
support the
development and
36
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Risk
driver
Description
Potential
impact
Direct/
Timeframe Indirect
Likelihood
Magnitu
de of
impact
Estimated
financial
implications
reduced demand
for hydrocarbons,
which could have
a material adverse
effect on our
operational
performance,
earnings, cash
flows and financial
condition.
Management
method
Cost of
management
implementing
energy-efficiency
measures in
operations where
reasonably
practical. To
support this, we
continue to
advocate
introduction of
effective
government-led
carbon pricing
mechanisms. Shell
continues to work
with governments,
industry, and
NGOs to support
effective climate
policies and is a
member of various
of industry
initiatives and
trade associations,
incl. IPIECA and
OGCI, dedicated to
help the oil and
gas industry
improve its
environmental and
social
performance. In
2015, we signed
up to the World
Bank´s Zero
Routine flaring by
2030 initiative. As
an example, in
Iraq, in 2015, we
implementation of
new energy
technologies by
investing in
companies and
technologies that
are
complementary to
Shell’s existing
business.
37
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Risk
driver
Description
Potential
impact
Direct/
Timeframe Indirect
Likelihood
Magnitu
de of
impact
Estimated
financial
implications
Management
method
Cost of
management
achieved first
commercial
production of
natural gas at our
Majnoon field. Gas
from Majnoon,
previously flared, is
now used to
produce power for
the domestic
market. We expect
further flaring
reductions to come
in 2016 as these
and other gas
gathering systems
reach full capacity.
Other
drivers
Long term
changes in
product demand
due to climate
change
regulation. Impact
of direct and
indirect regulation
on demand for oil
products,
especially road
transport fuels.
Policies that raise
fuel costs,
improve vehicle
efficiency or
reduce average
distances driven
will reduce fuel
demand.
Other: Falling
sales revenue
and earnings
>6 years
Direct
Very likely
Mediumhigh
GHG regulations
are likely to focus
more on
suppressing
demand for fossil
fuels. By 2030,
IEA’s 450
Scenario
describes
significant
renewables
penetration,
marked
improvement in
vehicle/process
efficiency and
widespread
replacement of
coal with natural
gas; CCS is
storing around 40x
Long term trends
in product demand
and their causes
are an integral part
of Shell’s energy
scenarios. The
business plans
tend to work on
shorter time
periods and may
overlook such
trends. The Shell
strategic plan,
which bridges the
plan and scenario
time scale is the
point of such
guidance.
In the short term,
ahead of the risk
occurring,
management
costs are
restricted to
monitoring such
trends and
formulating viable
strategic
responses.
38
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Risk
driver
Description
Potential
impact
Direct/
Timeframe Indirect
Likelihood
Magnitu
de of
impact
Estimated
financial
implications
the CO2 volume it
does now; O&G
price assumptions
in 2030 are ~
$97/b and
$9/MMbtu,
respectively (real
terms), global CO2
equivalent costs
$100/t (real terms).
Related impact on
expected
production (20152030) is
decreasing global
demand for oil by
17%; growing
demand for natural
gas by 8%.
Reducing demand
for transport fuels
could lead to
reduced
revenue/net
profits. Annual
financial impact of
those trends could
be in the
$100mlns
category. Those
impacts could be
intensified by lack
of refinery
competitiveness
as industry
capacity surplus is
generated. A shift,
even if not a net
reduction, in global
Management
method
Cost of
management
39
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Risk
driver
Description
Potential
impact
Direct/
Timeframe Indirect
Likelihood
Magnitu
de of
impact
Estimated
financial
implications
demand, such as
reduction in OECD
sales and growth
in non-OECD
sales, could
threaten net global
earnings too.
Management
method
Cost of
management
Further Information
CC5.1, line "Cap and Trade Schemes":
http://www.mckinsey.com/industries/oil-and-gas/our-insights/co2-abatement-exploring-options-for-oil-and-natural-gas-companies
Page: CC6. Climate Change Opportunities
CC6.1
Have you identified any inherent climate change opportunities that have the potential to generate a substantive change in your business
operations, revenue or expenditure? Tick all that apply.
Opportunities driven by changes in regulation
Opportunities driven by changes in physical climate parameters
Opportunities driven by changes in other climate-related developments
CC6.1a
Please describe your inherent opportunities that are driven by changes in regulation.
Opportunity
driver
Fuel/energy
taxes and
regulations
Description
Instruments
aimed at
reducing
emissions
from the use
Potential impact
New
products/business
services
Timeframe Direct/Indirect
1 to 3
years
Direct
Likelihood
Very likely
Magnitude
of impact
Mediumhigh
Estimated
financial
implications
Regulatory
action on
climate change
focuses on
policy
Management
method
Cost of
management
Shell invests
in low carbon
energy
solutions,
which we call
We believe
that lowcarbon biofuels
are one of the
most viable
40
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Opportunity
driver
Description
of
fuels/energy
provide
incentives to
develop
alternative
lower carbon
fuels e.g.
Shell
investment in
biofuels (JV
Raizen) and
wind.
Potential impact
Timeframe Direct/Indirect
Likelihood
Magnitude
of impact
Estimated
financial
implications
frameworks
development
introducing a
CO2 cost into
economy,
including fuel
standards (e.g.
Low Carbon
Fuel Standard,
California).
International
market for
biofuels is
growing, driven
largely by
introduction of
new energy
policies in
Europe/USA
calling for
more
renewable,
lower-carbon
fuels for
transport. Acc.
to IEA, biofuels
can provide up
to 27% of
world
transportation
fuel by 2050.
Shell has
increased the
presence in
production of
ethanol from
sugar cane. In
2015, we used
around 9.5 bln
Management
method
Cost of
management
new energies.
Shell’s new
energies
business
actively
explores
opportunities
where the
commercial
value is clear.
We have
invested in the
past, and we
intend to
continue to
invest in new
opportunities
at scale in the
future. New
Energies
covers a
number of
important
themes
including new
fuels for
mobility, such
as biofuels.
Shell invested
in the
formation of
Raízen, a joint
venture with
Cosan in
Brazil. Raízen
produces
approximately
2 billion litres
annually of
ways to reduce
CO2 from
transport fuels
in the coming
years. Our
Raízen joint
venture (Shell
interest 50%)
in Brazil
produces lowcarbon biofuel
from sugar
cane. We are
also investing
in research to
help develop
and
commercialise
advanced
biofuels. In
2014/2015, we
invested R$
3.3 billion in
our business.
Of this total,
R$ 2.33 billion
went to Raízen
Energia and
R$ 0.94 billion
to Raízen
Combustíveis.
In that period,
we crushed
57.1 million.
Overall, Shell’s
capital
employed in
new energies
activities today
41
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Opportunity
driver
Description
Potential impact
Timeframe Direct/Indirect
Likelihood
Magnitude
of impact
Estimated
financial
implications
litres of biofuel
in our gasoline
and diesel
blends
worldwide. In
terms of
financial
results, the
2014/2015
crop year was
very positive
for Raízen,
best to date.
The combined
EBITDA was
7.2% greater
than in
previous year
(R$4.9 billion,
compared with
R$4.6 billion).
Raízen had an
operating cash
flow of R$ 5.1
billion,
representing
an increase of
approximately
30% compared
with the
previous year
(see Raízen
Sustainability
Report
2014/2015, p.
5).
Management
method
Cost of
management
ethanol from
sugar cane..
This JV will
allow us to
supply lowCO2 fuels to
regulated
markets like
California We
continue to
invest in new
ways of
producing
biofuels from
sustainable
feedstock’s,
such as
biofuels made
from waste
products or
cellulosic
biomass.
These
advanced
biofuels could
potentially
emit less CO2
in the
production
process than
the biofuels
available
today.
Raízen’s
cellulosic
ethanol plant
at its Costa
Pinto mill in
Brazil was
is some $1.7
billion and we
are estimating
a spend of
around $200
million in 2016
to explore and
develop these
new
opportunities.
42
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Opportunity
driver
Cap and
trade
schemes
Description
Regulatory
action on
climate
change is
focused on
the
development
of carbon
pricing, such
as the EUETS or the
upcoming
carbon tax in
South Africa.
Shell is
operating in
Potential impact
Other: Potential to
provide new
products,
business
services; wider
social benefits.
Timeframe Direct/Indirect
1 to 3
years
Direct
Likelihood
Very likely
Magnitude
of impact
Mediumhigh
Estimated
financial
implications
Some EU ETS
allowances will
be distributed
on the basis of
benchmarks. A
higher
performance
against the
benchmark
offers the
opportunity to
secure
additional
allowances.
Shell has
Management
method
Cost of
management
opened in
2015. The
technology
was first
developed
through our
funding of the
Iogen Energy
venture, which
was
subsequently
transferred to
Raízen. It is
expected to
produce 40
million litres a
year of
advanced
biofuels from
sugar-cane
cellulosic
residues.
We are
increasing the
efficiency of
our refinery
and chemical
operations
which gives us
a competitive
advantage in
emissions
trading
schemes.
Greater
efficiency of
operations
reduce Shell’s
Energy
typically
accounts for
around half of
all costs at
refineries and
chemical
plants. We
continue to
research and
develop
technologies
that increase
efficiency and
reduce
emissions in
43
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Opportunity
driver
Description
Potential impact
Timeframe Direct/Indirect
Likelihood
Magnitude
of impact
these areas
and thus it will
affect the
company.
Such
schemes give
rise to a cost
for emitting
CO2, which in
turn
incentivises
solutions and
provides
opportunity
for business
development.
Other
regulatory
drivers
Coal to gas
fuel switching
could result in
growth in
natural gas
demand and
increased gas
production
Increased
demand for
existing
products/services
Up to 1
year
Direct
Virtually
certain
High
Estimated
financial
implications
implemented
an energy
efficiency
programme in
its assets and
thus has an
opportunity to
increase
income by
selling
allowances.
Furthermore,
these energy
savings helped
us to reduce
costs: the total
annual energy
cost of our 13
refineries is
around $2.5
billion. We
were able to
reduce costs
between 2009
and 2015 by
about $100
million each
year.
Increased in
revenue from
increased
demand for
gas: acc. to
IEA, over 40%
of global
emissions in
Management
method
Cost of
management
CO2
emissions in a
given market,
reducing the
level of
equivalent
CO2
emissions
allowances
that a given
asset is
required to
purchase.
Each of our 13
Shell-operated
refineries has
to identify
measures to
improve
energy
efficiency
every year.
For example,
in 2015, we
installed a
cogeneration
unit at our
Bukom
refinery in
Singapore.
Shell is the
leading IOC
today in the
global LNG
industry. We
were a pioneer
of the LNG
industry five
hydrocarbon
production.
Over the past
six years, we
have invested
about $1.1
billion in lowcarbon R&D.
Shell is one of
the world’s
leading
suppliers of
LNG, with a
growing
portfolio. In
January 2014,
44
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Opportunity
driver
Description
and sales
opportunities.
Potential impact
Timeframe Direct/Indirect
Likelihood
Magnitude
of impact
Estimated
financial
implications
2013 came
from
electricity/heat
generation. For
many
countries,
using more
gas in power
generation
instead of coal
can make the
largest
contribution, at
lowest cost, to
meet GHG
reduction
objectives.
Shell is one of
the world’s
leading LNG
suppliers of
and was
pioneering this
industry over
50 years ago.
Today, new
global LNG
supply is
mainly coming
from Australia,
North America,
East Africa.
We expect the
global LNG
market to grow
to around
460mtpa by
2030 (2015
was approx.
Management
method
Cost of
management
decades ago
and, today,
one of the
largest LNG
suppliers. LNG
links gas in
remote
locations to
power markets
world-wide,
and
particularly in
Asia Pacific.
Even after
liquefying,
transporting
and turning it
back into
natural gas,
LNG emits
around half
the CO2
compared to
coal when
burnt to
generate
electricity.
Shell is
developing our
first FLNG
facility,
Prelude FLNG
(Shell interest
67.5%), which
will be located
475 km off the
coast of
Western
Australia. And
Shell
completed the
acquisition of
Repsol S.A.'s
LNG portfolio
outside of
North America
for a net cash
purchase price
of $3.8 billion,
subject to postclosing
adjustments.
Capital
investment of
$3.4 billion
was reported
in 2013.
During
Q1/2016, Shell
completed the
acquisition of
BG for a
purchase
consideration
of $54,034
mln. This
includes cash
of $19,036
mln, and the
fair value
($34,050 mln)
of
1,523,804,425
shares issued
in exchange
for all BG
shares. This
should add
45
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Opportunity
driver
Cap and
trade
schemes
Description
Proliferation
of emissions
trading
Potential impact
Increased
demand for
existing
Timeframe Direct/Indirect
1 to 3
years
Direct
Likelihood
More likely
than not
Magnitude
of impact
Lowmedium
Estimated
financial
implications
250mtpa).
Shell is
currently
involved in
several LNG
projects
around the
world. E.g., the
LNG plant at
Sakhalin-2
(Shell interest
27.5%) (off
east coast of
Russia)
provides
around 9% of
Japan’s and
8% of South
Korea’s LNG
supplies. LNG
Canada (Shell
interest 50%),
is a proposed
joint venture to
develop an
LNG export
project in
British
Columbia,
connecting the
gas supply
from northwest Canada
to Asian
markets.
Shell offers
access to
almost every
Management
method
Cost of
management
enables us to
produce,
liquefy, store
and transport
LNG at sea.
significant
scale and
profitability,
particularly in
LNG
worldwide.
In the EU ETS
and CDM/JI
markets, the
Shell has
almost a
decade of
46
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Opportunity
driver
CC6.1b
Description
Potential impact
systems
present
opportunities
for the
expansion of
our carbon
trading
business.
products/services
Timeframe Direct/Indirect
Likelihood
Magnitude
of impact
Estimated
financial
implications
environmental
trading market
in the world.
We are able to
assist our
customers in
several
markets
including: the
EU ETS, Clean
Development
Mechanism,
emerging
carbon
markets such
as New
Zealand ETS
and North
American
markets,
renewable
energy
markets for
both voluntary
needs and
compliance
programs.
Point Carbon
estimates the
value of global
carbon
markets at €70
bln in 2015.
Management
method
Cost of
management
main products
we buy and
sell are EU
Allowances
(EUAs),
Certified
Emission
Reductions
(CERs) and
Emission
Reduction
Units (ERUs).
We also trade
UK
Allowances
(UKAs),
RECs, ROCs
and EU
Aviation
Allowances,
Californian
Allowances,
New Zealand
Units and
others.
experience
and proven
risk
management
capabilities in
the
environmental
trading
marketplace in
Europe. We
are active in
Asia and the
USA. Shell
was the first
company to
execute a
trade in
European
Union
Allowances
(EUAs) and
more recently,
the first
company to
trade US
federal CO2
compliance
futures
contracts on
the Chicago
Climate
Futures
Exchange.
Please describe the inherent opportunities that are driven by changes in physical climate parameters.
47
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Opportun
ity driver
Other
physical
climate
opportuniti
es
Description
Natural gas
can also act
as a partner
for
intermittent
renewable
energy, such
as solar and
wind, to
maintain a
steady
supply of
electricity,
because
gas-fired
plants can
start and
stop
relatively
quickly. A
warmer
climate may
result in
reduced
thermal
efficiency
and reduced
load including
shutdowns in thermal
power
plants.
Potential
impact
Increased
demand for
existing
products/s
ervices
Timefra
me
>6 years
Direct
/
Indire
ct
Direct
Likeliho
od
About as
likely as
not
Magnitu
de of
impact
Low
Estimated financial
implications
Increased revenue from
increased demand for gas and
LNG. The Fukushima nuclear
disaster in Japan is an
example of how natural
gas/LNG can act as a partner
to help meet immediate
demand in the absence of
renewables. Acc. to an
external energy research
group, the disaster resulted in
an increase in unplanned LNG
consumption by ~27%
compared to prior to the
accident. It is noted that Qatar
in particular contributed greatly
to meeting this demand due to
its expanded LNG production
capacity. It is difficult to
estimate Shell’s LNG sales
contribution to the increased
LNG demand, however, as
reported in the 2012 investors
handbook (page 20), our total
LNG sales volume in 2012
was 20.2 million tonnes – up
7% from 2011. This increase
mainly reflected the increase
in sales volumes from
Qatargas 4 and Pluto LNG
Project (Source:
http://web.mit.edu/12.000/www
/m2018/pdfs/japan/policy.pdf).
Furthermore, Shell’s global
presence in LNG provides the
flexibility to support global
markets.
Management method
Cost of
management
Natural gas today is
around half of Shell’s
production. Today,
new global LNG
supply is mainly
coming from Australia,
North America and
East Africa. At the
same time, we expect
LNG demand to rise
by 5% each year over
the next two decades.
Shell is currently
involved in several
LNG projects around
the world We are
constructing our first
FLNG facility, Prelude
FLNG (Shell interest
67.5%), which will be
located 475 km off the
coast of Western
Australia. Once
completed, Prelude
FLNG will be the
largest floating
offshore facility in the
world. Also utilize
LNG as transport fuel
(trucks / vessels).
Shell is one of the
world’s leading
suppliers of LNG,
with a growing
portfolio. In
January 2014,
Shell completed
the acquisition of
Repsol S.A.'s LNG
portfolio outside of
North America for
a net cash
purchase price of
$3.8 billion, subject
to post-closing
adjustments.
Capital investment
of $3.4 billion was
reported in 2013.
During Q1/2016,
Shell completed
the acquisition of
BG for a purchase
consideration of
$54,034 mln. This
includes cash of
$19,036 mln, and
the fair value
($34,050 mln) of
1,523.804,425
shares issued in
exchange for all
BG shares. This
This brings in a
world-wide
addition to our
LNG business, and
a growth position,
for example, in
48
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Opportun
ity driver
Description
Potential
impact
Timefra
me
Direct
/
Indire
ct
Likeliho
od
Magnitu
de of
impact
Estimated financial
implications
Management method
Cost of
management
new LNG in
Queensland,
Australia.
Change in
temperatu
re
extremes
CC6.1c
Growth in
demand for
products that
improve
insulation
efficiency
like styrene
monomers
and rigid
polyols,
which Shell
is already
producing.
New
products/b
usiness
services
>6 years
Direct
About as
likely as
not
Low
As physical changes in climate
result in increases in mean
and extreme temperatures,
improving efficiency of cooling
will become increasingly more
critical. This can potentially
lead to greater demand for
high quality insulation
materials and related chemical
feedstock.
We are reviewing the
market developments
and this opportunity
and associated costs /
revenues and plans
for managing the
opportunity are
currently under
development.
We are monitoring
the market
developments and
this opportunity
and associated
costs / revenues
and plans for
managing the
opportunity are
currently under
development.
Please describe the inherent opportunities that are driven by changes in other climate-related developments.
Opportunit
y driver
Description
Potential impact
Timefram
e
Direct/
Indirec
t
Likelihoo
d
Magnitu
de of
impact
Changing
consumer
behaviour
Growth in
demand for
goods and
services
that can
lower
customers
energy
consumptio
n and/or
reduce their
CO2
emissions,
for example
New
products/busines
s services
1 to 3
years
Direct
Very likely
High
Estimated financial
implications
Shell supplies fuels to
millions of drivers around
the world every day. We
have worked to develop
high-quality products to
improve the driving
experience and energy
efficiency of our
customers. For example,
Shell FuelSave Diesel
contains ingredients
designed to improve the
combustion process in
vehicle engines. This, in
Management
method
Shell’s new
energies
business is
actively
exploring
opportunities
where the
commercial
value is clear.
We have
invested in the
past, and we
intend to
continue to
Cost of
management
Innovation and
advanced
technologies
play a crucial
role in the
energy
transition Our
research and
development
(R&D) activities
aim to address
the need for
more energy
while reducing
49
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Opportunit
y driver
Description
demand for
advanced
fuels and
lubricants,
hydrogen
and biofuels
– areas in
which Shell
is currently
investing in
because
this is an
opportunity
for growth.
Potential impact
Timefram
e
Direct/
Indirec
t
Likelihoo
d
Magnitu
de of
impact
Estimated financial
implications
turn, can boost efficiency
and help drivers save
fuel. Shell FuelSave
Diesel has helped reduce
the carbon footprint of
business customers in the
bus, coach, construction
and trucking sectors.
Over the past six years,
Shell has invested about
$1.1 billion in low-carbon
R&D, including hydrogen.
Hydrogen has the
potential to be an
important low-carbon
transport fuel. According
to the World Energy
Technology Outlook, by
2050, hydrogen is
estimated to provide 13%
of final energy
consumption. Currently,
around 90% of hydrogen
is used in transport.
(Source:
http://europa.eu/rapid/pre
ss-release_MEMO-072_en.htm?locale=en.)
Management
method
invest in new
opportunities at
scale in the
future. New
energies covers
a number of
important
themes
including: new
fuels for mobility,
such as biofuels
and hydrogen;
integrated
energy solutions,
that combine, for
example wind
and solar
energy; and
connecting
customers with
new business
models for
energy, enabled
by digitalisation,
and the
decentralisation
of energy
systems. Our
joint venture,
Raízen (Shell
interest 50%), in
Brazil is the
world’s largest
producer of
sugar-cane
ethanol - that
can reduce CO2
emissions by
around 70%
compared with
Cost of
management
the
environmental
impact. We
look at
research and
development
across three
time horizons,
and over the
last 6 years we
have spent
around $1.1
billion in lowcarbon R+D.
Shell’s capital
employed in
new energies
activities today
is some $1.7
billion and we
are estimating
a spend of
around $200
million in 2016
to explore and
develop these
new
opportunities.
50
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Opportunit
y driver
Description
Potential impact
Timefram
e
Direct/
Indirec
t
Likelihoo
d
Magnitu
de of
impact
Estimated financial
implications
Management
method
conventional
petrol, across its
lifecycle. We
also buy and
blend biofuels
into conventional
fuels. We invest
in advanced
biofuels made
from plant. In
addition, Shell
helps customers
conserve energy
by focusing on
three areas:
smarter
customer
products,
smarter
customer use
and smarter
infrastructures.
In 2012, we
launched the
Shell FuelSave
Target One
Million campaign
to help people
save fuel. Over
420,000
motorists across
18 countries had
taken part. We
have also
introduced Shell
Helix Ultra motor
oil, with Shell
PurePlus
technology.
Cost of
management
51
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Module: GHG Emissions Accounting, Energy and Fuel Use, and Trading
Page: CC7. Emissions Methodology
CC7.1
Please provide your base year and base year emissions (Scopes 1 and 2)
Scope
Scope 1
Base year
Base year emissions (metric tonnes CO2e)
Wed 01 Jan 2014 - Wed 31 Dec
2014
76000000
Wed 01 Jan 2014 - Wed 31 Dec
2014
10000000
Scope 2 (location-based)
Scope 2 (market-based)
CC7.2
Please give the name of the standard, protocol or methodology you have used to collect activity data and calculate Scope 1 and Scope 2
emissions.
Please select the published methodologies that you use
American Petroleum Institute Compendium of Greenhouse Gas Emissions Methodologies for the Oil and Natural Gas Industry, 2009
ISO 14064-1
IPIECA’s Petroleum Industry Guidelines for reporting GHG emissions, 2nd edition, 2011
The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (Revised Edition)
US EPA Mandatory Greenhouse Gas Reporting Rule
Other
CC7.2a
If you have selected "Other" in CC7.2 please provide details of the standard, protocol or methodology you have used to collect activity data and
calculate Scope 1 and Scope 2 emissions.
Shell assets are required to comply with Shell's Performance Monitoring and Reporting Specification, which sets out the scope of what is to be reported. This is part
of our HSSE & SP (Health, Safety, Security, Environment & Social Performance) Control Framework. It requires assets to use local regulated methods where they
exist. Where there are no local regulated methods, assets use the 2009 API Compendium.
The following provides examples of the requirements in the province of Alberta (Canada) and the USA.
52
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Alberta:
What needs to be reported and how GHG emissions are to be calculated is outlined in the Specified Gas Reporting Standard V8.0. Section 7 of this standard
describes the methodology. The Specified Gas Reporting Regulation [Alberta Regulation 251/2004] describes who is required to report GHG emissions and how
data is collected.
USA:
The Code of Federal Regulations Title 40 Chapter I Subpart C Part 98 contains the requirements. There are several subparts to the rule that apply to our facilities.
Examples that apply to our assets are:
• Subpart A General Provisions
• Subpart C General Stationary Fuel Combustion Sources
• Subpart P Hydrogen Production
• Subpart W Petroleum and Natural Gas Systems
• Subpart X Petrochemical Production
• Subpart Y Petroleum Refineries
CC7.3
Please give the source for the global warming potentials you have used.
Gas
CO2
CH4
N2O
HFCs
PFCs
SF6
CC7.4
Reference
IPCC Fourth Assessment Report (AR4 - 100 year)
IPCC Fourth Assessment Report (AR4 - 100 year)
IPCC Fourth Assessment Report (AR4 - 100 year)
IPCC Fourth Assessment Report (AR4 - 100 year)
IPCC Fourth Assessment Report (AR4 - 100 year)
IPCC Fourth Assessment Report (AR4 - 100 year)
Please give the emissions factors you have applied and their origin; alternatively, please attach an Excel spreadsheet with this data at the bottom
of this page.
Fuel/Material/Energy
Other: Flare Efficiency Factor
Emission Factor
0.98
Natural gas
2.65
Motor gasoline
3.07
Kerosene
3.17
Diesel/Gas oil
3.18
Other: Fuel Oil
3.08
Unit
Other: fraction
metric tonnes CO2 per
metric tonne
metric tonnes CO2 per
metric tonne
metric tonnes CO2 per
metric tonne
metric tonnes CO2 per
metric tonne
metric tonnes CO2 per
Reference
API Compendium 2009, Fig. 4-2
IEA factors and Natural gas
composition W.E. Liss
IEA Statistics, 2011 Ed. CO2
Emissions from Fuel
IEA Statistics, 2011 Ed. CO2
Emissions from Fuel
IEA Statistics, 2011 Ed. CO2
Emissions from Fuel
IEA Statistics, 2011 Ed. CO2
53
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Fuel/Material/Energy
Emission Factor
Unit
metric tonne
Reference
Emissions from Fuel
Page: CC8. Emissions Data - (1 Jan 2015 - 31 Dec 2015)
CC8.1
Please select the boundary you are using for your Scope 1 and 2 greenhouse gas inventory.
Operational control
CC8.2
Please provide your gross global Scope 1 emissions figures in metric tonnes CO2e.
72000000
CC8.3
Does your company have any operations in markets providing product or supplier specific data in the form of contractual instruments?
Yes
CC8.3a
Please provide your gross global Scope 2 emissions figures in metric tonnes CO2e.
Scope 2, locationbased
9000000
CC8.4
Scope 2, market-based (if
applicable)
9000000
Comment
We calculated our scope 2 emissions from imported electricity and steam/heat using both
approaches. The difference between two methods for 2015 was immaterial (~1%).
Are there are any sources (e.g. facilities, specific GHGs, activities, geographies, etc.) of Scope 1 and Scope 2 emissions that are within your
selected reporting boundary which are not included in your disclosure?
Yes
CC8.4a
Please provide details of the sources of Scope 1 and Scope 2 emissions that are within your selected reporting boundary which are not included
in your disclosure.
54
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Source
CC8.5
Relevance of
Scope 1
emissions
from this
source
Relevance of
locationbased Scope
2 emissions
from this
source
Relevance of
market-based
Scope 2
emissions
from this
source (if
applicable)
Explain why the source is excluded
Some nonmaterial
sources
Emissions are
not relevant
No emissions
excluded
No emissions
excluded
We have reported emissions for all businesses including offices. Some non-material sources
have not been included. For example, we do not collect the fugitive emissions from domestic
scale air conditioning units; a materiality assessment for our industrial sources has shown the
industrial sources to be non-material. We continue to report the emissions of HFCs and PFCs
but we use a single Global Warming Potential (GWP) factor for these gases. The emissions
from some maintenance activities like welding are not included for all operations. We also do
not estimate the fugitive emissions of CO2 from CO2 fire extinguishers in all operations.
Country
electricity
factors
No emissions
excluded
Emissions are
not relevant
Emissions are
not relevant
Some country electricity factors are only available in CO2 and not CO2e. Where both are
available the difference is about 1%.
Please estimate the level of uncertainty of the total gross global Scope 1 and 2 emissions figures that you have supplied and specify the sources
of uncertainty in your data gathering, handling and calculations.
Scope
Scope 1
Scope 2
(locationbased)
Uncertainty
range
Less than or
equal to 2%
More than 10%
but less than or
equal to 20%
Main sources
of uncertainty
Assumptions
Extrapolation
Metering/
Measurement
Constraints
Sampling
Assumptions
Extrapolation
Metering/
Measurement
Constraints
Sampling
Please expand on the uncertainty in your data
We have carried out an uncertainty assessment for the majority of our Scope 1 GHG emissions using Oil and
Gas Industry methodologies. We used available uncertainty data and estimated uncertainties from best
available methodologies for the gaps. Whilst the uncertainties for varying sources differ significantly and for
some sources are large, for the gross a relatively low uncertainty is established (~2%). The calculation used
the weighted error propagation methodology and assumed uniform probability distributions. Shell also
contributed to the public knowledge on accuracy of CO2 measurements with the publication of an AICHE
paper “Accurate correlations to estimate refinery fuel gas, natural gas, and fuel oil CO2 emission factors and
its uncertainty” (http://www3.interscience.wiley.com/journal/123302611/abstract).
"More than 5% but less than or equal to 30%" remains our best estimate. Previously provided explanation
remains valid: approximately 60% of our scope 2 emissions come from imported electricity with the balance
from imported steam. The uncertainty range of the fiscally metered electricity is low relative to the uncertainty
in grid factors. The uncertainty of the grid factors applied is not published. The public grid factors are usually
lagging several years and hence, the 2015 indirect data is the product of actual 2015 electricity consumption
multiplied by pre 2015 grid factors. Significant changes have occurred in some country grid factors adding to
the uncertainty. Furthermore, the actual electricity from the grid is made up of a wide range of sources with
their own range of uncertainties, with large differences in CO2 factors and with large differences in utilisation
55
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Scope
Scope 2
(marketbased)
CC8.6
Uncertainty
range
More than 10%
but less than or
equal to 20%
Main sources
of uncertainty
Assumptions
Extrapolation
Metering/
Measurement
Constraints
Sampling
Please expand on the uncertainty in your data
(time delivered to the grid as fraction of available time). Assumptions on the definition of the grid factor will
significantly impact the uncertainty, depending on whether the CO2 factors are based on average or the
marginal use. The indirect GHG emissions from steam will have a lower uncertainty than from electricity but
the numbers are not readily available so an overall uncertainty cannot be quoted in a narrow range. The 530% quoted is not based on a formal study but is rather our best estimate of the range of uncertainties that
we currently face.
"More than 5% but less than or equal to 30%" remains our best estimate. Previously provided explanation
remains valid: approximately 60% of our scope 2 emissions come from imported electricity with the balance
from imported steam. The uncertainty range of the fiscally metered electricity is low relative to the uncertainty
in grid factors. The uncertainty of the grid factors applied is not published. The public grid factors are usually
lagging several years and hence, the 2015 indirect data is the product of actual 2015 electricity consumption
multiplied by pre 2015 grid factors. Significant changes have occurred in some country grid factors adding to
the uncertainty. Furthermore, the actual electricity from the grid is made up of a wide range of sources with
their own range of uncertainties, with large differences in CO2 factors and with large differences in utilisation
(time delivered to the grid as fraction of available time). Assumptions on the definition of the grid factor will
significantly impact the uncertainty, depending on whether the CO2 factors are based on average or the
marginal use. The indirect GHG emissions from steam will have a lower uncertainty than from electricity but
the numbers are not readily available so an overall uncertainty cannot be quoted in a narrow range. The 530% quoted is not based on a formal study but is rather our best estimate of the range of uncertainties that
we currently face.
Please indicate the verification/assurance status that applies to your reported Scope 1 emissions.
Third party verification or assurance process in place
CC8.6a
Please provide further details of the verification/assurance undertaken for your Scope 1 emissions, and attach the relevant statements.
Verificati
on or
assuranc
e cycle in
place
Status
in the
current
reporti
ng year
Annual
process
Comple
te
Type of
verificati
on or
assuranc
e
Limited
assuranc
Attach the statement
https://www.cdp.net/sites/2016/12/16012/Climate
Change 2016/Shared
Page/section reference
The attachment is a 2-page standalone assurance
statement for GHG emissions. The tonnes assured
Relevan
t
standar
d
Proporti
on of
reported
Scope 1
emissio
ns
verified
(%)
ISO1406
4-3
100
56
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Verificati
on or
assuranc
e cycle in
place
Status
in the
current
reporti
ng year
Type of
verificati
on or
assuranc
e
e
CC8.7
Attach the statement
Documents/Attachments/CC8.6a/LRQ4004543_
Shell_Int_Group_14064_2015_Op_C_ASt_Feb1
6_FINAL.pdf
Page/section reference
Relevan
t
standar
d
Proporti
on of
reported
Scope 1
emissio
ns
verified
(%)
match CC8.2 and cover 100% of the inventory. The
assertion confirms that the verification covers direct
(scope 1) emissions for 2015. The section “LRQA's
approach” on page 1 references the standard and
level of assurance. The opinion is on page 2.
Please indicate the verification/assurance status that applies to at least one of your reported Scope 2 emissions figures.
Third party verification or assurance process in place
CC8.7a
Please provide further details of the verification/assurance undertaken for your location-based and/or market-based Scope 2 emissions, and
attach the relevant statements.
Locati
onbased
or
market
-based
figure?
Marketbased
Verificat
ion or
assuran
ce cycle
in place
Annual
process
Status
in the
curren
t
reporti
ng
year
Compl
ete
Type of
verificati
on or
assuran
ce
Limited
assuranc
e
Attach the statement
https://www.cdp.net/sites/2016/12/16012/Cli
mate Change 2016/Shared
Documents/Attachments/CC8.7a/LRQ40045
43_Shell_Int_Group_14064_2015_Op_C_A
St_Feb16_FINAL.pdf
Page/Section reference
Releva
nt
standar
d
The attachment is a 2-page standalone assurance
statement for GHG emissions. The tonnes
assured match CC8.3a and cover 100% of the
inventory. The assertion confirms that the
verification covers energy indirect (scope 2)
emissions (location-based and market-based
figures) for 2015. The section “LRQA's approach”
on page 1 references the standard and level of
ISO140
64-3
Proporti
on of
reporte
d Scope
2
emissio
ns
verified
(%)
100
57
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Locati
onbased
or
market
-based
figure?
Locatio
nbased
CC8.8
Verificat
ion or
assuran
ce cycle
in place
Annual
process
Status
in the
curren
t
reporti
ng
year
Compl
ete
Type of
verificati
on or
assuran
ce
Limited
assuranc
e
Attach the statement
https://www.cdp.net/sites/2016/12/16012/Cli
mate Change 2016/Shared
Documents/Attachments/CC8.7a/LRQ40045
43_Shell_Int_Group_14064_2015_Op_C_A
St_Feb16_FINAL.pdf
Page/Section reference
assurance. The opinion is on page 2.
The attachment is a 2-page standalone assurance
statement for GHG emissions. The tonnes
assured match CC8.3a and cover 100% of the
inventory. The assertion confirms that the
verification covers energy indirect (scope 2)
emissions (location-based and market-based
figures) for 2015. The section “LRQA's approach”
on page 1 references the standard and level of
assurance. The opinion is on page 2.
Releva
nt
standar
d
ISO140
64-3
Proporti
on of
reporte
d Scope
2
emissio
ns
verified
(%)
100
Please identify if any data points have been verified as part of the third party verification work undertaken, other than the verification of emissions
figures reported in CC8.6, CC8.7 and CC14.2.
Additional data points verified
Change in Scope 1 emissions against a base year (not target related)
Change in Scope 2 emissions against a base year (not target related)
CC8.9
Comment
Our assurance statement also covers the base year
Our assurance statement also covers the base year
Are carbon dioxide emissions from biologically sequestered carbon relevant to your organization?
Yes
CC8.9a
Please provide the emissions from biologically sequestered carbon relevant to your organization in metric tonnes CO2.
22450
58
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Further Information
CC8.2: figures on the highest level of accumulation are rounded to the next million.
Page: CC9. Scope 1 Emissions Breakdown - (1 Jan 2015 - 31 Dec 2015)
CC9.1
Do you have Scope 1 emissions sources in more than one country?
Yes
CC9.1a
Please break down your total gross global Scope 1 emissions by country/region.
Country/Region
United States of America
Canada
Nigeria
Netherlands
Singapore
Middle East
Germany
Malaysia
United Kingdom
International Waters
South America
Rest of world
CC9.2
Scope 1 metric tonnes CO2e
15278000
8465000
5562000
5955000
6300000
13387000
3372000
4980000
2597000
1763000
1549000
2361000
Please indicate which other Scope 1 emissions breakdowns you are able to provide (tick all that apply).
By business division
By GHG type
CC9.2a
Please break down your total gross global Scope 1 emissions by business division.
59
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Business division
Downstream
Upstream (other than flaring)
Upstream flaring
Shipping
Other
CC9.2c
Scope 1 emissions (metric tonnes CO2e)
33250000
24600000
11800000
1763000
200000
Please break down your total gross global Scope 1 emissions by GHG type.
GHG type
CO2
CH4
N2O
HFCs
PFCs
SF6
Scope 1 emissions (metric tonnes CO2e)
68344000
2965000
230000
30000
0
130
Further Information
CC9.1a: "Rest of world" covers emissions from minor contributors and emissions calculated using centralised methods, i.e. emissions from offices.
CC8.2/9.1a: figures on the highest level of accumulation are rounded to the closest million; addition of detailed figures per country of region will show slightly
different results.
Page: CC10. Scope 2 Emissions Breakdown - (1 Jan 2015 - 31 Dec 2015)
CC10.1
Do you have Scope 2 emissions sources in more than one country?
Yes
CC10.1a
Please break down your total gross global Scope 2 emissions and energy consumption by country/region.
60
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Country/Region
Canada
United States of
America
Netherlands
Singapore
Germany
Malaysia
United Kingdom
Africa
Middle East
South America
Rest of world
CC10.2
3110000
3105000
Purchased and
consumed
electricity, heat,
steam or cooling
(MWh)
10100000
2711000
2712000
10500000
0
1797000
745000
409000
150000
91000
12000
4000
5000
258000
1872000
728000
409000
150000
91000
12000
4000
6000
272000
8500000
3100000
1600000
400000
400000
40000
20000
30000
1900000
450000
0
0
0
0
0
0
0
0
Scope 2, location-based
(metric tonnes CO2e)
Scope 2, market-based
(metric tonnes CO2e)
Purchased and consumed low
carbon electricity, heat, steam or
cooling accounted in market-based
approach (MWh)
0
Please indicate which other Scope 2 emissions breakdowns you are able to provide (tick all that apply).
By business division
CC10.2a
Please break down your total gross global Scope 2 emissions by business division.
Business division
Downstream
Upstream
Other
Scope 2 emissions, location based
(metric tonnes CO2e)
5800000
3300000
220000
Scope 2 emissions, market-based
(metric tonnes CO2e)
5900000
3300000
210000
Further Information
CC10.1a:
- "Rest of world" covers emissions from minor contributors and emissions calculated using centralised methods, i.e. emissions from offices.
61
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
- Calculation of energy from purchased electricity, steam, heat and cooling is aligned with the methodology outlined in the IPIECA/API/OGP Oil and Gas Industry
Guidance on Voluntary Sustainability Reporting 2015.
CC8.2/10.1a: figures on the highest level of accumulation are rounded to the next million; addition of detailed figures per country of region will show slightly different
results.
Page: CC11. Energy
CC11.1
What percentage of your total operational spend in the reporting year was on energy?
More than 10% but less than or equal to 15%
CC11.2
Please state how much heat, steam, and cooling in MWh your organization has purchased and consumed during the reporting year.
Energy type
Heat
Steam
Cooling
CC11.3
Energy purchased and consumed (MWh)
0
17000000
0
Please state how much fuel in MWh your organization has consumed (for energy purposes) during the reporting year.
215000000
CC11.3a
Please complete the table by breaking down the total "Fuel" figure entered above by fuel type.
Fuels
Natural gas
Other: Own energy
Other: Marine Transport Fuel
Other: Road Transport Fuel
CC11.4
MWh
25900000
181000000
7900000
200000
Please provide details of the electricity, heat, steam or cooling amounts that were accounted at a low carbon emission factor in the market-based
Scope 2 figure reported in CC8.3a.
62
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Basis for applying a low carbon emission
factor
Energy attribute certificates, Guarantees of origin
CC11.5
MWh consumed associated with low carbon
electricity, heat, steam or cooling
Comment
450000
Please report how much electricity you produce in MWh, and how much electricity you consume in MWh.
Total
electricity
consumed
(MWh)
Consumed
electricity that
is purchased
(MWh)
Total
electricity
produced
(MWh)
20000000
Total
renewable
electricity
produced
(MWh)
Consumed
renewable
electricity that is
produced by
company (MWh)
Comment
We do not track the amount of electricity generated and consumed within
our operations. We track primary energy used for generation of electricity
and steam. It was included in CC11.3.
We do apply the Projects Screening Value of $40 to our projects' power
and heat purchases which helps to differentiate between low and normal
energy suppliers.
Further Information
CC11.2: Heat and steam are combined and reported as steam. Cooling is provided via electricity.
CC11.3: Fuel consumed includes own generated fuel in addition to purchased fuel. It includes electricity and steam/heat that were generated onsite and exported to
a third party facility or grid.
Page: CC12. Emissions Performance
CC12.1
How do your gross global emissions (Scope 1 and 2 combined) for the reporting year compare to the previous year?
Decreased
CC12.1a
Please identify the reasons for any change in your gross global emissions (Scope 1 and 2 combined) and for each of them specify how your
emissions compare to the previous year.
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CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Emissions value
(percentage)
Direction of
change
Emissions reduction
activities
1.5
Decrease
Divestment
2.8
Decrease
Acquisitions
Mergers
Change in output
0.1
0
0.7
Increase
No change
Increase
Change in
methodology
0.1
Increase
Change in boundary
0.4
Decrease
0.3
Decrease
0
No change
1.6
Decrease
Reason
Change in physical
operating conditions
Unidentified
Other
CC12.1b
Please explain and include calculation
In 2015, 1.303 million tonnes of GHG emissions were reduced by our emissions reduction projects,
which translated to a reduction of 1.5% of our total scope 1 and 2 GHG emissions in 2014 (86
million tonnes CO2e). We arrived at 1.5% through (1.30 / 86) x 100.
There were several assets divested in 2014 and 2015, which resulted in decreased GHG emissions
in 2015. Examples include Geelong refinery in Australia, some unconventional assets in the US,
Canada and several oil leases in Nigeria.
Several new vessels joined our fleet in 2015.
None in 2015.
Increase in output was primarily driven by increased production in Malaysia.
Examples of changes in methodology include: updated grid factors for imported electricity for a
number of countries, updated Global Warming Potentials in line with IPCC's Fourth Assessment
Report.
Emissions from some activities have been reclassified from scope 1 to scope 3 in line with the
IPIECA Guidance for reporting GHG emissions.
Cold weather in early 2014 caused some operational issues at one of our chemical plants in the
USA.
None in 2015.
Decrease was primarily driven by the shutdown at our Moerdijk chemical plant in the Netherlands.
In addition, this category includes correction of some 2014 data due to changes in boundary.
Is your emissions performance calculations in CC12.1 and CC12.1a based on a location-based Scope 2 emissions figure or a market-based Scope
2 emissions figure?
Market-based
CC12.2
Please describe your gross global combined Scope 1 and 2 emissions for the reporting year in metric tonnes CO2e per unit currency total
revenue.
Intensity
figure =
0.00038
Metric
numerator (Gross
global combined
Scope 1 and 2
emissions)
Metric
denominator:
Unit total
revenue
metric tonnes
CO2e
264960000000
Scope
2 figure
used
Marketbased
%
change
from
previous
year
Direction
of
change
from
previous
year
52
Increase
Reason for change
The intensity in 2015 increased compared to 2014 mainly due to the
decrease in revenue in 2015 compared to 2014 (in line with lower oil
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CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Intensity
figure =
Metric
numerator (Gross
global combined
Scope 1 and 2
emissions)
Metric
denominator:
Unit total
revenue
Scope
2 figure
used
%
change
from
previous
year
Direction
of
change
from
previous
year
Reason for change
prices). Shell does not report emissions intensity in relation to financial
performance. In our view, such measures potentially risk misleading
readers because:
a) Emissions volumes and financial performance (for example, revenue,
EBITDA or net income) are not necessarily reported on the same basis particularly where emissions volumes are reported on the basis of
operational control - therefore measures that combine them do not
compare like-with-like in the ratio. It is not possible to report revenue on an
operated basis. The ratio shown was determined using verified direct and
indirect equity emissions. If operated GHG data were used the result
would be 0.00031 tonne / $ revenue and a 50% change from 2014.
b) Even where emissions volumes and financial performance are reported
on a consistent basis (for example, on the basis of financial control), the
different factors underlying emissions volumes and financial performance
are often unrelated. A key driver underlying revenue, for example, is the
price of oil and gas, which fluctuates regardless of an entity’s volumes of
emissions. The oil and gas price moved by more than 5% from 2014 to
2015. EBITDA and net income additionally reflect the financial effects of
activities that have no impact on emissions volumes. Our conclusion
therefore is that only activity-related measures (see question 12.3) provide
readers with relevant and reliable information.
CC12.3
Please provide any additional intensity (normalized) metrics that are appropriate to your business operations.
Intensity
figure =
0.46
Metric
numerator (Gross
global combined
Scope 1 and 2
emissions)
metric tonnes CO2e
Metric denominator
Metric
denominator:
Unit total
Other: tonnes of oil
sands hydrocarbon
production
13070000
Scope
2 figure
used
Marketbased
%
change
from
previous
year
6
Direction
of change
from
previous
year
Decrease
Reason for change
Oil Sands: decrease was primarily driven by
emission reduction projects (7.2% decrease),
the main one of which was the start-up of the
Carbon Capture and Storage facility outlined
in target Abs1 referred to in questions 3.1a,e
and the first example in 3.3b.
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CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Intensity
figure =
Metric
numerator (Gross
global combined
Scope 1 and 2
emissions)
Metric denominator
Metric
denominator:
Unit total
Scope
2 figure
used
%
change
from
previous
year
Direction
of change
from
previous
year
Reason for change
0.29
metric tonnes CO2e
Other: tonne of crude
oil and feedstock
processed
Marketbased
0
No change
Refining: overall intensity in 2015 was flat
compared to 2014.
0.49
metric tonnes CO2e
metric tonne of product
Marketbased
13
Decrease
Chemicals: decrease was primarily driven by
shutdown at our Moerdijk chemical plant in the
Netherlands.
metric tonnes CO2e
Other: tonnes of
upstream hydrocarbon
production excluding oil
sands and gas-toliquids
Marketbased
0
No change
Upstream excluding oil sands and gas-toliquid operations: overall intensity in 2015 was
flat compared to 2014.
0.12
Page: CC13. Emissions Trading
CC13.1
Do you participate in any emissions trading schemes?
Yes
CC13.1a
Please complete the following table for each of the emission trading schemes in which you participate.
Scheme name
Allowances allocated
Period for which data is
supplied
European Union
ETS
CC13.1b
Thu 01 Jan 2015 - Thu 31 Dec
2015
11117195
Allowances purchased
Verified emissions
in metric tonnes
CO2e
13677682
Details of ownership
Other: Facilities we
operate
What is your strategy for complying with the schemes in which you participate or anticipate participating?
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CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Our first objective is to ensure that any participating affiliate is in compliance with the scheme, and in addition transaction cost is minimised. Hence we will aggregate
group exposures and minimise transactions. Where affiliates have exposure to tradable commodity price risk, which can be managed, Shell Trading will transact with
the affiliate at the market price, and take on the risks associated with transacting the position in the market (for which it is paid a fee). Shell Trading will then manage
the risk and trade around it when possible.
As an organisation that proactively supports emissions trading as a mechanism to deliver a price on CO2 which allows installations to manage emission levels down
in an economically efficient manner, we are involved in supporting the development of emissions trading schemes through active participation, for example in the
Regional Greenhouse Gas Initiative (RGGI).
CC13.2
Has your organization originated any project-based carbon credits or purchased any within the reporting period?
No
Further Information
CC13.1a: The information provided in 13.1a is provided as an example of the main scheme.
Page: CC14. Scope 3 Emissions
CC14.1
Please account for your organization’s Scope 3 emissions, disclosing and explaining any exclusions.
Sources of
Scope 3
emissions
Purchased goods
and services
Evaluation
status
Relevant,
calculated
metric
tonnes
CO2e
7930000
Emissions calculation methodology
An analysis was undertaken in 2010 to look at
the contracting and procurement spent in
various categories. Supplier data was taken
from either the CDP data base or industry
averages were calculated from intensities of
similar companies. Prorating the spend data to
2015 indicates that the estimate is still valid.
Percentage
of
emissions
calculated
using data
obtained
from
suppliers or
value chain
partners
Explanation
50.00%
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CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Sources of
Scope 3
emissions
Evaluation
status
metric
tonnes
CO2e
Capital goods
Relevant,
calculated
4180000
Fuel-and-energyrelated activities
(not included in
Scope 1 or 2)
Relevant,
calculated
1300000
Emissions calculation methodology
Transport services were excluded because
they are covered by other categories below.
Includes the emissions associated with the
generation of imported hydrogen used in our
refineries and oil sands operations. Some of
the numbers are provided by our suppliers and
the remainder are calculated using factors
from the API Compendium 2009.
Prior to 2015, scope 3 emissions associated
with Capital Goods were included in Category
1 Purchased Goods and Services. We were
able to split our emissions for 2015 reporting.
These emissions were derived as a result of
an analysis undertaken in 2010 to look at the
contracting and procurement spent in various
categories. Supplier data was taken from
either the CDP data base or industry averages
were calculated from intensities of similar
companies. Some of the numbers are
provided by our suppliers and the remainder
are calculated using factors from the API
Compendium 2009.
These emissions represent:
1) Emissions resulted from transmission &
distribution losses from electricity imported by
our operations. T&D factors were taken from
DEFRA.
2) Emissions from Well-to-Tank (WTT)
electricity generation (upstream emissions of
purchased electricity). WTT emission factors
were taken from DEFRA.
3) Emissions from electricity Well-to-Tank
Percentage
of
emissions
calculated
using data
obtained
from
suppliers or
value chain
partners
Explanation
50.00%
100.00%
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CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Sources of
Scope 3
emissions
Upstream
transportation
and distribution
Evaluation
status
Relevant,
calculated
metric
tonnes
CO2e
1400000
Emissions calculation methodology
(WTT) electricity transmission and distribution.
WTT emission factors were taken from
DEFRA. 4) Emissions from steam & heat Wellto-Tank (WTT). WTT emission factors were
taken from DEFRA.
Includes air, sea and land transport services
provided by contractors to our upstream and
downstream businesses. A number of
methods are applied, which range from using
the amount of fuel consumed to calculating
distance travelled multiplied by emission
factors. Emission factors are generally taken
from the API Compendium or DEFRA.
Waste generated
in operations
Not relevant,
calculated
200000
The estimation is based on the mass of
hazardous and non-hazardous waste disposed
offsite and DEFRA emission factors for waste
disposal to landfill.
Business travel
Not relevant,
calculated
310000
The calculation was based on DEFRA
calculation (no calculation method changes
from 2011).
Percentage
of
emissions
calculated
using data
obtained
from
suppliers or
value chain
partners
Explanation
95.00%
100.00%
100.00%
The number reported does not include the
emissions from wastewater plants operated by
our company. These emissions are accounted
for in our scope 1 or 2. It does not include
waste generated onsite, but not disposed of in
2015. It also excludes waste disposal through
deep well injection.
The metric tonnes reported come from air
travel data that is booked via our corporate
systems. People can occasionally have air
travel booked outside the corporate system.
The number reported does not represent
100% of business travel. The number reported
does not include travel undertaken on other
forms of public transport like trains and buses.
Business travel in company vehicles is
reported under scope 1. Business travel in
contractor operated vehicles is reported under
the scope 3 Upstream transportation category
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CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Sources of
Scope 3
emissions
Evaluation
status
metric
tonnes
CO2e
Emissions calculation methodology
Percentage
of
emissions
calculated
using data
obtained
from
suppliers or
value chain
partners
Explanation
in this table.
Employee
commuting
Not relevant,
calculated
250000
Upstream leased
assets
Not relevant,
calculated
700000
Downstream
transportation
and distribution
Relevant,
calculated
2700000
The maximum contribution is estimated to be
less than 250,000 tonnes. This was estimated
on the basis of assuming that all employees
drive a total of 50 km per working day. In many
work locations the majority of employees travel
to work by public transport hence the number
shown is a maximum estimated for evaluation
purposes only.
LNG regasification terminals were identified as
potentially relevant leased major facilities. The
Shell capacity rights were used to estimate the
emissions using data from our operated
facilities. In addition, the emissions shown
include the direct and indirect emissions that
come from our capacity rights to a major
installation that we do not own or operate. The
emissions are reported as scope 1 and 2
under the equity boundary. The emissions
from the Shell Trading and Shipping Company
operated leased vessels are included under
our scope 1 operational control boundary.
The activity data was taken from the 2015
Annual Report. Emission factors were
generally taken from DEFRA or the McKinnon
and Piecyk's report "Measuring and managing
CO2 emissions from the transportation of
chemicals in Europe". Emissions were
estimated from the mass of sold products
multiplied by the appropriate emission factor
for each freight mode (sea, pipeline, road or
rail) and average distance travelled based on
50.00%
75.00%
50.00%
We do not track the destination of all products
through the processing, conversion,
distribution, use and disposal by customers.
Primary product data is taken directly from our
own sources but the assumptions come from
external sources like the one referenced in the
methodology.
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CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Sources of
Scope 3
emissions
Evaluation
status
metric
tonnes
CO2e
Emissions calculation methodology
Percentage
of
emissions
calculated
using data
obtained
from
suppliers or
value chain
partners
Explanation
data published in the USA and the UK.
Processing of
sold products
Use of sold
products
End of life
treatment of sold
products
Not relevant,
explanation
provided
Relevant,
calculated
Relevant,
calculated
We do not track the destination of sold
products through processing.
559000000
25000000
The activity data is taken from pages 35-45 of
the 2015 Annual Report. The following
emission factors (tonne CO2 / tonne of
product) were assigned to each product, i.e.
Gasoline = 3.07, Kerosene = 3.17, Gas Oil =
3.18, Fuel Oil = 3.08, LPG = 2.95, Natural Gas
= 2.65. The boundary used to report refinery
products and natural gas production are those
used for financial reporting and do not align
with the traditional GHG boundaries defined by
the GHG Protocol. The Refinery Outturn data
reflects Shell subsidiaries, the 50% Shell
interest in Motiva in the USA and instances
where Shell owns the crude or feedstock
processed by a refinery. Some equity
accounted investments are not included. The
natural gas production includes Shell
subsidiaries and the Shell share of equity
accounted investments. See the assurance
statement for more details.
The methodology is based upon the amount of
our chemical and lubricant products, the
carbon content and assumptions taken from
reports like ICCA's 2009 Innovations for
Greenhouse Gas Reductions.
100.00%
The exclusions are mentioned in the
assurance statement under “4. Emissions
from the use and disposal of chemical
products, lubricants and other non-fuel
products like bitumen are not included.
Refinery type products produced by Chemical
plants are also not included."
50.00%
We do not track the destination of all products
through the processing, conversion,
distribution, use and disposal by customers.
Primary product data is taken directly from our
own sources but the assumptions come from
external sources like the one referenced in the
methodology. No allowance has been
included for the emission reductions due to
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CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
Sources of
Scope 3
emissions
Downstream
leased assets
Franchises
Investments
Other (upstream)
Other
(downstream)
metric
tonnes
CO2e
Evaluation
status
Not relevant,
calculated
Relevant,
calculated
Relevant,
calculated
Not relevant,
explanation
provided
Not relevant,
calculated
Emissions calculation methodology
0
There were no major facilities identified that
we leased to other companies in 2015.
1764000
This number includes the indirect emissions
from the operation of Shell branded sites
excluding those that are company owned /
operated or operate under a license only. The
number reported for 2015 includes nonoperated locations. The average electricity
data was collected from survey data in several
countries. The CO2 / CO2e electricity factors
for each country were used.
900000
The data is collected via our investments in
major facilities. These are typically
investments that report under the cost
dividend accounting method. The numbers are
reported to us by the facilities or estimated.
Percentage
of
emissions
calculated
using data
obtained
from
suppliers or
value chain
partners
Explanation
the production of insulation, use of advanced
lubricants or displacement of alternate fuel
sources.
There were no major facilities identified that
we leased to other companies in 2015.
Emissions from minor leased assets such as
retail stations are included in the category 14
Franchises.
100.00%
95.00%
The numbers reported are for our investments
in major facilities only. Data from our own
facilities indicates that other investments will
not be material. The scope 1 & 2 data
reported in other parts of this document relate
to facilities that we operate. Our equity
emissions are published on our public website
and do not include emissions from
investments.
This category is not applicable to us at this
point.
541000
Metered quantities of CO2 sold.
100.00%
Transfers of sold CO2 sent offsite.
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CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
CC14.2
Please indicate the verification/assurance status that applies to your reported Scope 3 emissions.
Third party verification or assurance process in place
CC14.2a
Please provide further details of the verification/assurance undertaken, and attach the relevant statements.
Verification
or
assurance
cycle in
place
Annual
process
CC14.3
Status in
the
current
reporting
year
Complete
Type of
verificatio
n or
assurance
Limited
assurance
Page/Section reference
Relevant
standard
The attachment is a 2-page standalone
assurance statement for part of our scope 3
GHG emissions.
i) & ii) The section “LRQA's approach” on
page 1 references the level of assurance and
the relevant standard.
iii) The type and proportion of emissions are as
reported in CC14.1 category 11 “use of sold
products” when compared to the “total”. There
are exclusions and hence the estimate is 90%.
ISO140643
Attach the statement
https://www.cdp.net/sites/2016/12/1
6012/Climate Change 2016/Shared
Documents/Attachments/CC14.2a/L
RQ4004543_Shell_Int_14064_Sc
3_ASt_Feb16_FINAL.pdf
Proportion of
reported Scope
3 emissions
verified (%)
90
Are you able to compare your Scope 3 emissions for the reporting year with those for the previous year for any sources?
Yes
CC14.3a
Please identify the reasons for any change in your Scope 3 emissions and for each of them specify how your emissions compare to the previous
year.
Sources of Scope 3
emissions
Emissions value
(percentage)
Reason for change
Direction of
change
Franchises
Change in
methodology
18
Decrease
Franchises
Divestment
4
Decrease
Investments
Divestment
24
Decrease
Comment
Change in methodology accounted for around 18%
decrease in the emissions.
The number of sites decreased by 4% due to
divestments.
Emissions decreased primarily because of divestments.
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CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
CC14.4
Do you engage with any of the elements of your value chain on GHG emissions and climate change strategies? (Tick all that apply).
Yes, our suppliers
Yes, our customers
Yes, other partners in the value chain
CC14.4a
Please give details of methods of engagement, your strategy for prioritizing engagement and measures of success.
The Shell Global Solutions "Greenhouse Gases Intensity Analysis Team" (GIAT) prioritises engagements that support the development of products, technologies,
industry standards and regulations that can help to reduce GHG emissions in an efficient and effective manner based on sound science.
The following is an example from the chemicals sector of engagement with other industry partners in the value chain: Shell contributed to the development of a
methodology to assign greenhouse gas emissions to high value chemicals (HVCs). There is no industry standard way of doing this and customers are increasingly
asking suppliers for greenhouse gas footprint information for chemicals. It is important to ensure that there is a consistent approach taken across companies. The
methodology was presented at The International Lifecycle Management (LCM) Conference in Bordeaux and a meeting of the International Council of Chemical
Associations (ICCA).
In accordance with our Shell General Business Principles and Group Code of Conduct, we seek to work with contractors and suppliers who contribute to sustainable
development and are economically, environmentally and socially responsible.
With regard to the environment we expect that contractors and suppliers:
• are committed to protect the environment in compliance with all applicable environmental laws and regulations;
• use energy and natural resources efficiently;
• continually look for ways to minimise waste, emissions and discharge of their operations, products and services.
Understanding and acceptance of the Shell Supplier Principles is required in every Shell purchase contract.
In addition we take a risk based approach to suppliers’ and contractors’ reporting of GHG’s in individual contracts for our projects and assets. Where the requirement
to report on GHG’s is identified, standard contract language may be used to request reporting from suppliers and contractors.
Monitoring of the reporting is part of the specific contract management; specific actions may be agreed on any of the above mentioned topics.
Shell has no central reporting set up for these engagements.
CC14.4b
To give a sense of scale of this engagement, please give the number of suppliers with whom you are engaging and the proportion of your total
spend that they represent.
Number of
suppliers
% of total spend
(direct and indirect)
Comment
Where monitoring is a meaningful element as part of the Contract Management Plans with a supplier, customer or other
partner, specific actions may be agreed on the above mentioned topics. Effectively, "number of suppliers" should be >0,
and so would the % be, but this information is not centrally coordinated in Shell.
CC14.4c
If you have data on your suppliers’ GHG emissions and climate change strategies, please explain how you make use of that data.
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CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
How you make use of the data
Other
Please give details
Actions are taken from results of such reporting; however, in Shell, they are not centrally
coordinated but managed on a local level.
Module: Sign Off
Page: CC15. Sign Off
CC15.1
Please provide the following information for the person that has signed off (approved) your CDP climate change response.
Name
Ben van Beurden
Job title
Chief Executive Officer
Corresponding job category
Chief Executive Officer (CEO)
Further Information
NEW LENS SCENARIOS
This publication contains data from Shell’s New Lens Scenarios. The New Lens Scenarios are a part of an ongoing process used in Shell for 40 years to challenge
executives’ perspectives on the future business environment. We base them on plausible assumptions and quantifications, and they are designed to stretch
management to consider even events that may only be remotely possible. Scenarios, therefore, are not intended to be predictions of likely future events or outcomes
and investors should not rely on them when making an investment decision with regard to Royal Dutch Shell plc securities.
CAUTIONARY NOTE
The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate legal entities. In this report, “Shell”, “Shell group” and “Royal
Dutch Shell” 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 subsidiaries in general or to those who work for them. These expressions are also used where no useful purpose is served by
identifying the particular company or companies. "Subsidiaries", “Shell subsidiaries” and “Shell companies” as used in this publication refer to companies 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 (for example, through our 23% shareholding in Woodside
Petroleum Ltd.) ownership interest held by Shell in a venture, partnership or company, after exclusion of all third-party interest. This report contains forward-looking
statements concerning the financial condition, results of operations and businesses of Royal Dutch 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
Royal Dutch 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 “anticipate”, “believe”, “could”, “estimate”, “expect”, “goals”, “intend”, “may”,
“objectives”, “outlook”, “plan”, “probably”, “project”, “risks”, “schedule”, “seek”, “should”, “target”, “will” and similar terms and phrases. There are a number of factors
75
CDP – Climate Change 2016 Information Request – Royal Dutch Shell plc
that could affect the future operations of Royal Dutch 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; and (m) changes in trading conditions. 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’s 20-F for the year ended December 31, 2015 (available at www.shell.com/investor and
www.sec.gov). 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, submitted 30 June 2016. 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. We may have used certain terms, such as
resources, in this report that the United States Securities and Exchange Commission (SEC) strictly prohibits us from including in our filings with the SEC. US
investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575, available on the SEC website www.sec.gov.
76