The Lord : 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 : 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?
: 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.
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