Carbon Emission Reduction Targets

Lord Bishop of St Albans Excerpts

Wednesday 5th December 2018 Lords Chamber

Asked by

[The Lord Bishop of St Albans]

To ask Her Majesty’s Government what steps they are taking to encourage oil and gas companies to link executive pay to carbon emission reduction targets.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, the Government welcome the announcement by Shell that executive pay will be linked to carbon reduction targets. While executive pay is a matter for the company’s shareholders, the Government have given shareholders new powers to hold companies to account on pay, including a binding vote on the directors’ remuneration policy.

[The Lord Bishop of St Albans]

My Lords, I thank the Minister for his Answer and I agree that the announcement this week by Royal Dutch Shell is to be welcomed, though it has come after years of investor pressure, not least from the Church Commissioners and the Church of England Pensions Board. Her Majesty’s Government have stated their support for the Task Force on Climate-Related Financial Disclosures. Can the Minister tell us what practical things Her Majesty’s Government are doing to encourage that, and in particular what assessment they have made of whether it should become compulsory?

[Lord Henley]

My Lords, we believe that it is important that executive pay should be a matter for the companies involved. That is why we leave it to them and why we have given powers to shareholders in the Enterprise and Regulatory Reform Act 2013 to insist, as I said in my original Answer, that they have a binding vote on directors’ remuneration policy. In striving to meet carbon reduction targets, the Government will continue to encourage others to do the same, but that must be a matter for the companies.