Approaching ExxonMobil’s 2011 citizenship report requires some suspension of disbelief. After all, ExxonMobil is a company with an endless list of sustainability sins, from the Exxon Valdez oil spill all the way to funding global warming skeptics. When you finally do suspend disbelief enough to read the report, you find out that Exxon provides a detailed and quite transparent review of the environmental and social impacts of its operations. Unlike other oil companies, it even doesn’t try to paint a too rosy picture of reality. At the same time, you also find that with all the progress it claims to be making, ExxonMobil is still the same ExxonMobil.
The starting point of the report is the opening remarks of the company’s CEO, Rex W. Tillerson:
“At ExxonMobil, we are proud of the role we play in supplying the energy to meet the world’s needs. These needs are expected to grow by about 30 percent by 2040, as economies expand and the world’s population approaches 9 billion people. Providing this energy in a safe and environmentally responsible manner, and at the enormous scale that will be required, is one of the great challenges facing the world in the coming decades. This Corporate Citizenship Report explains how ExxonMobil is playing its role in meeting this challenge.”
If the suspension of disbelief works really well for you, meeting one of the world’s most important needs in a safe and eco-friendly manner sounds like a great vision. You almost feel like ExxonMobil is some kind of a green James Bond, ceaselessly working to save the world. The devil, as you’ll see in a minute, is not necessarily in the details, but more in the framework under which Exxon wishes to achieve its vision.
It all starts and ends with fracking, which is becoming an important part of Exxon’s business and future growth. As Brian O’Keefe writes on Fortune Tech, ExxonMobil, the prototypical oil giant, gets about 50 percent of its production from, and has 50 percent of its reserves in, natural gas. In addition, ExxonMobil plans to invest $185 billion over the next five years in its business, most of it to explore for and develop new sources of oil and gas. Just for comparison, the company writes in the report that it invested $440 million last year to improve energy efficiency, reduce flaring, and reduce GHG emissions.
In terms of public debate and policy making, ExxonMobil dedicates one page in the report to climate change policy, reinforcing its support of carbon tax. As progressive and surprising as it might sound, ExxonMobil knows that this solution is far from being feasible in the U.S. at the moment, additionally, since they plan to focus on less carbon intensive fuel such as natural gas, they could even benefit from a carbon tax regime as compared to other oil and gas extractors.
Going back to Tillerson’s vision, the main problem with it is that ExxonMobil is interested in a framework as flexible as possible, one that will enable it to voluntarily decide how high the bar of safety and environmental protection will be. For example, ExxonMobil provides a detailed page on its position on hydraulic fracturing (it won’t use of course the term fracking). There, the company reassures stakeholders that “we understand stakeholders are concerned about these risks, including those related to hydraulic fracturing fluids and wastewater, well casing and groundwater, vehicle traffic, air emissions, and other related effects. These are important concerns, and we know we must respond to them in every community in which we operate and reach out to communities to ensure our responses are effective.” But, the company does not mention how it will address these concerns.
ExxonMobil adds that “all our shale gas development and production activities are guided by proven policies, industry guidelines and practices, as well as more than 40 years of experience in hydraulic fracturing.” If this doesn’t sound like enough, the oil giant adds the transparency factor: “A vital component of building community trust is transparency of operations. We support the disclosure of the ingredients used in hydraulic fracturing fluids, including on a site-specific basis. In the United States, disclosure appears on the publicly accessible FracFocus.org website.”
What the company fails to mention is that it doesn’t want tougher regulations that will decide for ExxonMobil what is safe and what isn’t. While the company thinks about its costs and profits but it claims that it’s a fight about economy and progress. Reuters reported that Tillerson said in a conference that “if government puts the development of these new sources of energy at a standstill, they will find their economies walking backwards.” This approach is also translated into action, from contributes $86,000 to ALEC, helping to promote weak fracking regulations to claiming and promoting the notion that environmental concerns are unfounded (sounds familiar?).
Eventually, while ExxonMobil may be fighting new regulations, the tactics and the profit-above-all mentality have stayed the same. Unfortunately this report showcases that no matter how strongly you suspend your disbelief.
Raz Godelnik is the co-founder of Eco-Libris, a green company working to green up the book industry in the digital age. He is an adjunct faculty at the University of Delaware’s Department of Business Administration, CUNY and the New School, teaching courses in green business and new product development.