The Shell Sustainability Report 2005 discusses at length the energy challenge facing the world over the next half-century, which will require governments, energy users and producers to do three things simultaneously: meet the increasing demand for energy; keep supplies secure; and reduce energy’s environmental and social impacts.

Launching the report, Chief Executive Jeroen van der Veer said: “I genuinely believe the world can meet the challenge with the right combination of technology, investment, partnerships and effective policies from governments.

“I am convinced there is enough energy to meet growing future demand.

“But this won’t be sustainable unless the environmental impacts from growing fossil fuel use can be managed. They can be and, for the sake of our grandchildren, they must be.

“I see the potential to develop ways of using fossil fuels so that increasingly the CO2 produced is captured, stored or used productively, creating what I call greener fossil fuels. If we can make that work, both technically and financially, we would be on the way to something really big and exciting,” Mr van der Veer said.

The report describes Shell’s contribution to meeting the energy challenge through increased investment; developing cleaner fuel for the transport sector; developing alternative sources of electricity; managing greenhouse gas and other environmental and social impacts from fossil fuels; maintaining a wide range of oil and natural gas sources from different regions; and working with governments, vehicle manufacturers and customers to help align incentives, raise awareness and promote new energy options.

2005 Report highlights

Shell used an External Review Committee to assess the 2005 report’s balance, completeness and responsiveness, based on the principles of the AA1000 Assurance Standard. Composed of five international experts in the environmental and social issues, that matter most to Shell’s stakeholders, this marks a first for Shell and a first for a major oil and gas company. [See note below for Committee membership].

Shell’s actions to manage greenhouse gas emissions gathered pace. The company cut its own emissions; stepped up research into capturing carbon dioxide; and revamped its alternative energy strategy focusing on the most promising technologies: two for transport (biofuel and hydrogen) and two electricity sources (wind and thin-film solar).

Real progress was made in protecting the environment and meeting the needs of indigenous people at the Sakhalin II project in Russia.

Despite growing security problems, the Shell-operated joint venture in Nigeria moved closer to its goal to end continuous flaring in 2009. The joint venture has reduced flaring volumes by 30% since 2001.

The report discusses openly the mistakes that Shell made in 2005 and its efforts to learn from them, including its problems on the Corrib project in Ireland where the company paid too little attention to the community’s concerns about safety and local development.

Shell’s reporting is also responding to the diverging needs of different stakeholders. The 2005 Shell Sustainability Report and supporting websites are targeted at non-financial external stakeholders. To meet the needs of shareholders and the financial community, Shell included significantly more environmental and social information in its 2005 Annual Report/20-F. For staff, Shell provides a Sustainability Review, focused on what its commitment means to its employees in practice.

Shell continues to report in accordance with the Global Reporting Initiative (GRI) and the International Petroleum Industry Environmental Conservation Association guidelines. Shell’s contribution to the UN Global Compact and the Millennium Development Goals is described on the website.