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SUSTAINABILITY REPORT ROYAL DUTCH SHELL PLC SUSTAINABILITY REPORT 2009 I Shell Sustainability Report 2009 Introduction

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SUSTAINABILITY REPORT ROYAL DUTCH SHELL PLC SUSTAINABILITY REPORT 2009 I Shell Sustainability Report 2009 Introduction SUSTAINABILITY REPORT ROYAL DUTCH SHELL PLC SUSTAINABILITY REPORT 2009 i Shell Sustainability Report 2009 Introduction INDEX HOW WE REPORT ON SUSTAINABLE DEVELOPMENT INTRODUCTION i HOW WE REPORT ON SUSTAINABLE We began reporting voluntarily on our environmental and social DEVELOPMENT performance with the first Shell Report that covered 1997. Our 1 INTRODUCTION FROM THE CEO reporting focuses on the environmental and social challenges that most affect business performance and matter most to our key stakeholders. These include local communities, non-governmental SHELL AND THE ENERGY FUTURE organisations, shareholders, investors, customers, governments, 2 OUR BUSINESS employees, media, academics, contractors and suppliers. We use a 3 BUILDING A LOW-CARBON ENERGY FUTURE thorough process to select content for our reporting based on information from internal and external sources. Throughout the year 4 OUR BUSINESS STRATEGY we also provide information to the Dow Jones Sustainability 5 KEY DEVELOPMENT PROJECTS Indexes, FTSE4Good, the Carbon Disclosure Project and other 6 OUR APPROACH TO SUSTAINABLE organisations that help investors understand the economic, environmental and social performance of companies. DEVELOPMENT 7 INTERVIEW WITH THE CEO Internal controls such as audit trails and statistical checks help assure the accuracy of the Shell Sustainability Report. An External Review Committee of independent experts helps make sure our OUR OPERATIONS IN FOCUS reporting is balanced, relevant and responsive to stakeholders’ 8 OUR PERFORMANCE IN 2009 interests. Lloyd’s Register Quality Assurance Ltd has provided limited 10 CLIMATE CHANGE assurance of our direct greenhouse gas emissions data for 2009. 12 MANAGING OUR IMPACTS We report in accordance with the Global Reporting 16 SAFETY Initiative (GRI) and in line with the International 18 JOINT VENTURES, CONTRACTORS AND Petroleum Industry Environmental Conservation Association (IPIECA) guidelines. GRI confirmed our SUPPLIERS A+ reporting level for the information contained in this 19 OUR NEIGHBOURS Sustainability Report, the Royal Dutch Shell plc Annual 22 NIGERIA Report and Form 20-F 2009, and on www.shell.com. Shell supports the UN Global Compact and its 10 MEETING ENERGY DEMAND principles covering human rights, labour, environment 24 CLEANER FUEL FOR POWER and anti-corruption. Sections of this Sustainability Report cover Shell’s progress in 2009 in these areas. INCREASING SUPPLIES 26 Further details of our contribution to the UN Global 29 INNOVATING FOR BETTER PRODUCTS Compact are on the Shell corporate website. 30 MORE SUSTAINABLE TRANSPORT www.shell.com/sdreporting This report is supported on the Shell website by additional OUR PERFORMANCE environmental and social performance data and more detailed 32 EXTERNAL REVIEW COMMITTEE information on our approach to sustainable development and related issues. Web links on each page show where to find this 34 PERFORMANCE DATA information and are marked as below. 36 PERFORMANCE GRAPHS www.shell.com/sustainability 37 ABOUT OUR DATA KEY TO SYMBOLS related information online, such as on www.shell.com telephone number postal address Shell Sustainability Report 2009 1 Introduction INTRODUCTION FROM THE CEO “SAFETY, ENVIRONMENTAL AND SOCIAL PERFORMANCE ARE NOW CLOSER TO THE CORE OF OUR BUSINESS PLANS AND DECISIONS.” I am honoured to introduce the Shell the Shell Eastern Petrochemicals Complex energy future and a central part of the Sustainability Report for 2009. It was a in Singapore. future energy mix. A modern gas-fired landmark year for the world with the UN power plant emits half the CO2 of a modern climate change conference taking place in We agreed a contract to develop Iraq’s coal plant when generating the same Copenhagen. My view is that the outcome Majnoon field as operators. Iraq poses amount of electricity – and it costs less than offered a good starting point for greater many challenges, including safety and the half to build. In CCS, we are involved in a action. But I will come to that later. possible social impact of helping to develop number of projects to develop this essential the country’s resources. We will draw on technology. We are also helping our The business challenges we face are clear our experience of operating in other difficult customers use less energy by developing in our reduced earnings for the year. There environments to tackle these challenges. more advanced fuels and lubricants. were many positive achievements, however, reflecting our drive and determination to Our operations and projects in Nigeria Low-carbon biofuels offer one of the best meet energy demand through technology moved forward, with Afam VI contributing and more immediate commercial options to and innovation applied in the right way: substantially to the country’s electricity reduce CO2 from transport fuels. In early with respect for communities and the supply and the Okoloma plant increasing 2010 we signed a non-binding environment. Development of new fields gas supplies. The Gbaran-Ubie oil and gas memorandum of understanding with Cosan and increased production at existing project is on track to start production in the to form a joint venture in Brazil for ethanol projects helped offset the decline of our next 12 months. We agreed to sell our production from sugar cane, the biofuel that older fields. The reliability of our refineries interest in several leases in the Niger Delta currently produces the least CO2. We are improved. Crucially in these tough to Nigerian companies, subject to also investing to develop more advanced economic conditions, we reduced Government approval. I believe this will biofuels for the future. underlying costs by more than $2 billion in provide an opportunity to further develop 2009 and identified further savings of local skills. The security situation, however, CHALLENGES AHEAD $1 billion in 2010. Our safety record in meant that the operating environment in I would like to thank the members of the 2009 was our best to date – I expect Nigeria continued to be difficult. External Review Committee for their everyone who works for Shell, employee valuable contribution to this year’s Shell and contractor alike, to keep building on Our oil sands expansion project in Canada Sustainability Report. Once again, they this excellent progress. made good progress. It will use new provided critical comments on early drafts technology that will save energy – reducing which urged us to think harder about our Our greenhouse gas emissions fell further. carbon dioxide (CO2) emissions – and performance in sustainable development This was mainly due to reduced activity in water. and how we report on our progress. We our refineries and chemical plants as well know there is still room for improvement. as forced production shutdowns in Nigeria. TIME TO ACT We take to heart all the lessons we learn But our investments and improvements in Climate change remains a huge global and will apply them as we move forward. energy efficiency in many of our operations challenge, of course. For the first time, the also played a role. We have programmes countries that emit the most CO2 recognised I believe sustainable development works in place to step up these improvements. in Copenhagen the need to work towards a best when it is thoroughly integrated in our new, low-carbon energy future. Shell will business decisions at the very earliest SECURING ENERGY continue to work with governments to help opportunity. Under the reorganisation of In 2009, our delivery of major projects develop the regulatory frameworks we Shell that began when I became CEO in remained on course. We started production believe are vital to establish a price for CO2 July 2009, we embedded sustainable from the deep-water Parque das Conchas that allows companies to invest in energy development firmly in our businesses. This oil field off Brazil, and our Perdido efficiency, new low-CO2 products and means that safety, environmental and social development in the Gulf of Mexico moved carbon capture and storage (CCS). But while performance are now closer to the core of towards first production in early 2010. we work towards that aim, we must also our business plans and decisions. Sakhalin II started production of liquefied focus sharply on what we can deliver now. natural gas (LNG) in Russia’s far east. In That is exactly how it must be if we are to Qatar, our Pearl gas-to-liquids and Our production of cleaner-burning and meet the complex challenges ahead in the Qatargas 4 LNG projects will complete cost-effective natural gas has been rising for most effective and responsible way. major construction around the end of 2010. many years and will be over half our total In Downstream, we started up the first of energy output by around 2012. Natural Peter Voser several new advanced processing units at gas can be both a bridge to a low-carbon Chief Executive Officer 2 Shell Sustainability Report 2009 Shell and the energy future SHELL AND THE ENERGY FUTURE a c d E b J M K F H M l G N CHEMICAL I PRODUCTS USED FOR . Plastics OUR BUSINESS . Coatings . Detergents Shell is a global group of energy REFINED OIL . Insulation and petrochemical companies PRODUCTS employing 101,000 people in more . Fuels and biofuels than 90 countries. Our aim is to GAS AND . Lubricants meet the energy needs of society in ELECTRICITY . Bitumen ways that are economically, . Industrial use . Liquefied petroleum gas environmentally and socially . Domestic use responsible. UPSTREAM UPSTREAM and liquefied petroleum gas for home, Upstream consists of two organisations, transport and industrial use. Chemicals . Exploring for oil and gas a Upstream International and Upstream markets petrochemicals for industrial . Developing fieldsb Americas. Upstream searches for and customers. Downstream also trades crude . Producing oil and gas c recovers oil and natural gas, extracts oil, oil products and petrochemicals . Mining oil sands d bitumen from oil sands that is converted primarily to optimise feedstock for our . Extracting bitumen E into synthetic crudes, liquefies natural manufacturing activities.
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