Controls, governance and assurance

Because sustainable development is so important for delivering our business strategy, it is part of how we assess our performance and pay of our people. It counts for 20% of the Shell Scorecard, which we use to set bonuses.

Controls – clear requirements

Sustainable development training for new employees, Port Arthur, USA

We have a single control framework that defines how Shell is organised and managed. It includes the Shell General Business Principles, the Code of Conduct and our Health, Safety, Security and Environment (HSSE) standards. All must be applied in companies, including joint ventures, that we control.

In addition, contractors working for us must manage HSSE in line with our standards and follow our Business Principles or their equivalent. Suppliers, as well as joint ventures we do not control are encouraged to adopt and follow business principles and high-level HSSE standards equivalent to our own. If our expectations cannot be met in a reasonable time, we review these relationships. This can involve actions up to and including ending the relationship.

We have a series of requirements for integrating environmental and social factors into the way we plan, design and take investment decision on major new projects. For example, since 2002, we have considered the expected future costs to a project from its CO2 emissions when making all major investment decisions. And an integrated environmental, health and social impact assessment is required before we begin significant work on major projects or existing facilities.

Governance – clear roles and responsibilities

Our Chief Executive is the executive responsible for sustainable development. He chairs the Group Sustainable Development and HSSE Executive, which reviews environmental and social performance and sets priorities, key performance indicators and targets. Environmental and social performance is part of the duties of every manager. Each of our businesses is responsible for complying with our requirements and achieving its specific targets in this area.

The Corporate and Social Responsibility Committee is the non-executive body that reviews our environmental and social performance on behalf of the Board of Royal Dutch Shell. It assesses our policies and performance with respect to our Business Principles, Code of Conduct, HSSE and major issues of public concern. The Committee is made up of three Non-executive Directors.

Assurance – checking that the rules have been followed

At the end of each year, the heads of our businesses and functions must report to the Chief Executive on whether they have followed our Business Principles and standards. They each write an annual assurance letter describing any areas where they did not meet our standards and what efforts are underway to correct the problem. Shell Internal Audit also investigates fraud, compliance and other control incidents. Ethical and legal incidents are reported to the Executive Committee and to the Audit Committee.

We also regularly audit the HSSE management systems at our facilities. Our process safety specialists do dedicated safety audits. All our major plants must be externally certified to international environmental standards, for example ISO 14001. External panels and observers help us monitor environmental and social performance. These include community panels at a number of facilities that advise us on our social performance.