Philip Watts
describes what his company is doing to reduce its impact on the environment and develop cleaner energy

‘We now understand that both business and society stand to benefit from working together,’ said Kofi Annan, the United Nations Secretary-General, at the 2002 World Summit in Johannesburg. ‘And more and more we are realizing that it is only by mobilizing the corporate sector that we can make significant progress.’ It was a most welcome recognition of the role business can play in meeting the challenges of sustainable development.

Shell is playing its part both individually and as part of the World Business Council for Sustainable Development, which I have had the privilege of chairing over the past two years. This is part of a clear commitment to contribute to sustainable development, which is at the heart of the way we operate. That means we take account of environmental and social considerations as well as economic ones in making our business decisions.

We know that oil and gas exploration and production can have an impact on the environment and are determined to minimize it and ensure the long-term legacy of these operations is a good one.

Protecting the world’s biodiversity is a particularly important aspect of our work, and we are working in partnership with a number of conservation organizations. These include a project with the Smithsonian Institution in Gabon that is researching and cataloguing the immensely rich natural environment around the oilfields in the Gamba complex. It is extremely encouraging that the research so far has suggested that, despite almost 40 years of oil operations, the environment in the area is as rich as ever.

Integrating biodiversity
We have been working with other companies and conservation organizations in the Energy Biodiversity Initiative in recognition of the particular responsibilities of energy companies in this area. As part of this, the Shell Group has developed tools and guidelines on best practice in integrating biodiversity into oil and gas development. We hope these will form the basis for a common approach by the industry.

This builds on the approach we have taken to integrate biodiversity into our project planning and operations. The environmental impact of any project is assessed right from the start and safeguards are put in place to mitigate any negative effects. There is an early dialogue with stakeholders to ensure that their concerns are addressed. Biodiversity is important wherever we work and we try to ensure that all our operations take place in a responsible way which respects the local environment.

World Heritage
We also recognize that there are some areas of the world which are too sensitive for any oil and gas operations to take place. Earlier this year, I announced that Shell would not explore for oil and gas in any Natural World Heritage sites. This is a very significant step and represented a real commitment to place respect for the environment at the heart of the way we do business. But protecting biodiversity is just one part of the work across the Shell Group to minimize the environmental effect of our operations.

Every year we report publicly in the Shell Report on our performance on a range of environmental and social indicators including emissions, spills and energy efficiency. The data are independently verified where possible, and we work hard to ensure that the report is an open and honest account of our record and can form the basis of an ongoing dialogue with our stakeholders. Publishing these data provides a powerful incentive to improve our performance. The latest report shows we have made progress on a number of indicators, although we have more to do to ensure consistency across the whole Shell Group.
Responding to the energy challenge will require both more efficient use of existing hydrocarbon resources and work to develop the potential of alternatives
Our performance against our target for greenhouse gas emissions is one of the key measurements set out in the report. Shell shares widespread concern that the emission of these gases from human activities is leading to changes in the global climate. We believe action is required now to lay the foundation for eventually stabilizing their concentrations.

We set a target of reducing greenhouse gas emissions from our own operations by 10 per cent from 1990 levels by 2002. Had we taken no action, the development of our business over that period would have resulted in an increase of more than 20 per cent. We met that target last year and have now renewed our commitment with a new one – to ensure that, in 2010, emissions are still at least 5 per cent below the 1990 level.

Sound business
Shell is also working to help our customers reduce their emissions from energy use. This raises one of the greatest challenges facing us all: how to meet growing global demand for energy in a way which does not harm the environment. Successfully meeting this challenge will require both more efficient use of existing hydrocarbon resources and work to develop the potential of alternatives such as renewable energy and hydrogen.

Natural gas in particular can offer a bridge to increased use of renewable fuels in the longer term. Gas produces significantly lower carbon emissions than oil or coal and Shell is developing new gas projects around the world and seeking new markets for that gas. At the same time Shell is building a renewables business and supporting research and development of hydrogen. While it is clear that renewables cannot be a quick fix, Shell is helping them to increase their role in the energy mix and is becoming a leading player in the provision of wind and solar energy in a number of projects around the world.

Shell takes its responsibilities to the environment very seriously. There are sound business reasons why we need to do so. Our customers, those who work with us and the communities in which we operate expect us to meet the highest standards. By meeting those expectations and respecting the communities and environments in which we work we can develop our business and ensure its continued success

Sir Philip Watts is Chairman of the Committee of Managing Directors of the Royal Dutch/Shell Group of Companies.


This issue:
Contents | Editorial | Key to development | The energy challenge | Plant power | Bioenergy: doing well while doing right | New energy for development | People | Delivering Change | Benign growth | Green energy | At a glance: Energy | Sustainable Dreams | Brightening the future | Greening oil | Blue-sky thinking | Books & products | New energy to assault poverty | New energy entrepreneurs | Time to get serious | Breaking the ice | In my lifetime – 100% renewable| Slimming the waste

Complementary issues:
WSSD, 2002
Energy, 2001
Climate and Action, 1998
Climate Change, 1997

AAAS Atlas of Population and Environment:
Natural Resources