A just energy transition
As we transform into a net-zero emissions energy business, we work with governments and society to support positive economic and social impacts of the transition on our workforce, communities, suppliers and customers.
The importance of a just transition
A successful energy transition depends on more than just financial investment and technological advances. It also needs to be a just transition – that means a fairer distribution of the costs and benefits as the world moves to a net-zero emissions energy system. Shell supports the Paris Agreement on climate change, which recognises the importance of a just transition. Shell aims to contribute to a just and inclusive transition by making a positive economic and social impact, while seeking to minimise negative effects. We seek to leverage our existing structures to expand social dialogue with employees, employee representative bodies, relevant local government bodies and communities to address the social aspects of the energy transition and to advance human rights and labour rights.
Respect for Human Rights: Respecting human rights is an essential element of just transition. Shell is committed to respecting human rights, as set out in the United Nations Universal Declaration of Human Rights and the International Labour Organisation's Declaration on Fundamental Principles and Rights at Work. Read more at shell.com/humanrights.
Advocacy: When engaging with governments, we seek opportunities to advocate for policy ambitions that ensure the economic and social benefits of the transition are inclusive and distributed in a fair way. For example, just transition is now one of the four fiscal principles we are advocating in support energy transition (see Shell Tax Contribution Report | Shell Global).
Shell’s just transition focus areas
Delivering a just transition will require governments, businesses, organisations and individuals across society to play their part. Shell’s contribution to a just transition focuses on making a positive impact in four key areas: our workforce, our communities, our suppliers and our customers.
Our workforce
Our communities
Our suppliers
Our customers
Our workforce
Employee dialogue
Shell hosts employee-centred events to help ensure employees are informed and involved on strategy implementation and priorities. Examples include a Net-Zero Emissions week, delivered in partnership between business leaders and Shell's Organisational Development & Learning team. This included coaching sessions to help employees manage their career during the energy transition and a live Q&A session to help employees understand Shell’s just transition approach.
Building skills and supporting employability
We are continuing to find ways to help our employees learn new skills needed for the energy transition. In 2023, around 6,900 Shell employees – up from 4,000 in 2022 and 1,700 in 2021 – completed courses on a range of subjects, including hydrogen production, carbon capture and storage, and greenhouse gas and energy management.
Fair pay
In 2022, Shell published its Fair Pay Principles (PDF, 385 kB), to increase transparency of our pay policies for staff. We also expect our suppliers to provide their employees with wages and benefits that meet or exceed the national legal standards.
Diversity, Equity and Inclusion (DE&I):
Embedding equality of opportunity for groups that have been traditionally under-represented in energy is an important element of a just and fair transition. Shell has set a bold ambition, which is embedded in our company strategy and applies to all parts of our business: to become one of the most diverse and inclusive organisations in the world. Read about our DE&I ambitions, our roadmap, and our progress for diversity, equity and inclusion at Shell.
Our inclusion strategy is about everyone, and we prioritise four equity focus areas today – gender, race and ethnicity, LGBT+ and disability inclusion and enABLEment.
Our communities
Jobs and communities
As the energy transition generates more jobs, it is important that the workforce in the communities is provided with the opportunity to reskill as part of plans for an inclusive labour force in the new energy system. This requires robust dialogue and collaboration between government, civil society and business.
Energy Transition Skills Hub in Aberdeen, Scotland
One example of successful multilateral collaboration is a project with Energy Transition Zone Ltd (a not-for-profit company) Shell UK, North East Scotland College and the Just Transition Fund of the Scottish Government. The hub was established after extensive stakeholder engagement to understand regional workforce requirements to support the transition. Together, we have created the Energy Transition Skills Hub in Aberdeen, which aims to equip the region’s future workforce with the skills to drive the energy transition.. In addition, Shell UK has also established the Pembrokeshire and Fife Energy Transition Skills Hubs, these three hubs form part of Shell UK’s wider ambition to help 15,000 people into jobs with a focus on the energy transition by 2035.
Sharing the benefits in innovative ways
At our Pottendijk wind and solar power park in the Netherlands, which opened in 2023, we are sharing the proceeds from the renewable energy we generate. Over the next 16 years we expect to pay around $2 million into a community fund, which will be used as the community sees best.
Working with social organisations
In the energy transition, Shell UK aims to reach people from a range of backgrounds, education levels and income disparities, with a lens on the more socio-economically disadvantaged. For example, through our partnerships with charities and social organisations like Generation UK and Catch22, both of whom support people from disadvantaged communities to employment, we are helping unemployed people into jobs advising on home energy efficiency, project management and digital and data roles.
In 2024, Shell Nederland launched the Shell Impact Fund, a bespoke investment fund for social entrepreneurs and impact ventures in their early stage of business.
With the fund’s targeted investments, Shell hopes to indirectly help 100,000 Dutch households and small and medium-sized enterprises (SMEs) with reducing their energy costs, reducing their energy consumption, or ensuring access to cleaner energy and more sustainable mobility.
Since 2023, Shell Nederland has also been launching several donation rounds to support social organizations with the switch to more sustainable forms of energy and mobility or to take energy-saving measures. From installing a charging station to acquiring insulation material, almost 400 grassroot initiatives throughout the Netherlands have already received a contribution to help increase their positive societal impact.
Our suppliers
We have set clear standards for labour rights, living and working conditions for our employees and contractors. We support the industry coalition Building Responsibly and have included their Worker Welfare principles into our own Safety, Environment and Asset Management Standards in the Shell Performance Framework, in order to implement them across our activities and contracts using a risk-based approach. The Worker Welfare Manual outlines requirements on worker welfare risk assessments, welfare standards on working and living conditions and labour rights.
In relation to our global procurement, Shell focuses on helping companies local to our operations set themselves up to join our supply chain. In 2023, around 83% of what we spent on goods and services globally was purchased from suppliers based in the same country of operation. Supplier diversity is another element of creating and sharing social and economic benefits. In countries around the world, we buy from and support the development of businesses that are part of historically underrepresented or underserved groups.
Our customers
We help ensure energy security in our key markets and invest in businesses that supply energy access in emerging markets. Through our social investments, we also provide funds, expertise and resources to increase energy access outside of our commercial business. The supply of affordable and secure energy is crucial for addressing global challenges, including those related to poverty and inequality. For example in November 2024, we joined forces with bp, Equinor and TotalEnergies to announce a $500 million joint investment commitment to help address the challenges of energy access. This joint investment seeks to support promising, high-impact projects, primarily in Sub-Saharan Africa, and South and South-east Asia, that are working to bring access to electricity and improved cooking conditions to underserved communities.
Cautionary note
Cautionary note
The companies in which Shell plc directly and indirectly owns investments are separate legal entities. In this content “Shell”, “Shell Group” and “Group” are sometimes used for convenience to reference Shell plc and its subsidiaries in general. Likewise, the words “we”, “us” and “our” are also used to refer to Shell plc and its subsidiaries in general or to those who work for them. These terms are also used where no useful purpose is served by identifying the particular entity or entities. ‘‘Subsidiaries’’, “Shell subsidiaries” and “Shell companies” as used in this content refer to entities over which Shell plc either directly or indirectly has control. The terms “joint venture”, “joint operations”, “joint arrangements”, and “associates” may also be used to refer to a commercial arrangement in which Shell has a direct or indirect ownership interest with one or more parties. The term “Shell interest” is used for convenience to indicate the direct and/or indirect ownership interest held by Shell in an entity or unincorporated joint arrangement, after exclusion of all third-party interest.
Forward-Looking statements
This content contains forward-looking statements (within the meaning of the U.S. Private Securities Litigation Reform Act of 1995) concerning the financial condition, results of operations and businesses of 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 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 “aim”; “ambition”; ‘‘anticipate’’; “aspire”, “aspiration”, ‘‘believe’’; “commit”; “commitment”; ‘‘could’’; “desire”; ‘‘estimate’’; ‘‘expect’’; ‘‘goals’’; ‘‘intend’’; ‘‘may’’; “milestones”; ‘‘objectives’’; ‘‘outlook’’; ‘‘plan’’; ‘‘probably’’; ‘‘project’’; ‘‘risks’’; “schedule”; ‘‘seek’’; ‘‘should’’; ‘‘target’’; “vision”; ‘‘will’’; “would” and similar terms and phrases. There are a number of factors that could affect the future operations of Shell and could cause those results to differ materially from those expressed in the forward-looking statements included in this content, 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, including climate change; (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, judicial, fiscal and regulatory developments including tariffs and 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; (m) risks associated with the impact of pandemics, regional conflicts, such as the Russia-Ukraine war and the conflict in the Middle East, and a significant cyber security, data privacy or IT incident; (n) the pace of the energy transition; and (o) changes in trading conditions. No assurance is provided that future dividend payments will match or exceed previous dividend payments. All forward-looking statements contained in this content 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 Shell plc’s Form 20-F and amendment thereto for the year ended December 31, 2024 (available at www.shell.com/investors/news-and-filings/sec-filings.html and www.sec.gov). These risk factors also expressly qualify all forward-looking statements contained in this content and should be considered by the reader. Each forward-looking statement speaks only as of the date of this content. Neither 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 content.
Shell’s net carbon intensity
Also, in this content we may refer to Shell’s “net carbon intensity” (NCI), which includes Shell’s carbon emissions from the production of our energy products, our suppliers’ carbon emissions in supplying energy for that production and our customers’ carbon emissions associated with their use of the energy products we sell. Shell’s NCI also includes the emissions associated with the production and use of energy products produced by others which Shell purchases for resale. Shell only controls its own emissions. The use of the terms Shell’s “net carbon intensity” or NCI is for convenience only and not intended to suggest these emissions are those of Shell plc or its subsidiaries.
Shell’s net-zero emissions target
Shell’s operating plan and outlook are forecasted for a three-year period and ten-year period, respectively, and are updated every year. They reflect the current economic environment and what we can reasonably expect to see over the next three and ten years. Accordingly, the outlook reflects our Scope 1, Scope 2 and NCI targets over the next ten years. However, Shell’s operating plan and outlook cannot reflect our 2050 net-zero emissions target, as this target is outside our planning period. Such future operating plans and outlooks could include changes to our portfolio, efficiency improvements and the use of carbon capture and storage and carbon credits. In the future, as society moves towards net-zero emissions, we expect Shell’s operating plans and outlooks to reflect this movement. However, if society is not net zero in 2050, as of today, there would be significant risk that Shell may not meet this target.
Forward-Looking non-GAAP measures
This content may contain certain forward-looking non-GAAP measures such as adjusted earnings and divestments. We are unable to provide a reconciliation of these forward-looking non-GAAP measures to the most comparable GAAP financial measures because certain information needed to reconcile those non-GAAP measures to the most comparable GAAP financial measures is dependent on future events some of which are outside the control of Shell, such as oil and gas prices, interest rates and exchange rates. Moreover, estimating such GAAP measures with the required precision necessary to provide a meaningful reconciliation is extremely difficult and could not be accomplished without unreasonable effort. Non-GAAP measures in respect of future periods which cannot be reconciled to the most comparable GAAP financial measure are calculated in a manner which is consistent with the accounting policies applied in Shell plc’s consolidated financial statements.
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