What does it mean when one of the world’s supermajor oil companies discloses its indirect impacts on the climate for the first time? For ExxonMobil, the implications are complicated. Earlier this month, the oil giant divulged its Scope 3, indirect emissions near the end of its 2021 Energy & Carbon Summary - claiming it issued that disclosure due to the influence of stakeholder pressure.
“Noting that stakeholders have expressed growing interest in Scope 3 data, the Company is providing Scope 3 information in the table to the right and plans to do so on an annual basis,” ExxonMobil writes in its 2021 Energy and Carbon Summary, also noting that Scope 3 emissions “do not provide meaningful insight into the Company’s emission-reduction performance and could be misleading in some respects.”
On the one hand, a reluctant disclosure is still a step forward for a major carbon producer. According to several sources, ExxonMobil has been, after all, the fourth most-polluting company in the world, falling below only three fellow oil producers, Saudi Aramco, Chevron and Gazprom.
On the other hand, the statement continues a pattern of disingenuous environmentalism. For example, a Union of Concerned Scientists report last fall concluded, “By ExxonMobil’s own accounting, it gave $690,000 to eight climate science denier groups in 2019, a 10 percent drop from 2018. In addition, it continued to fund federal lawmakers who oppose a carbon tax, despite its supposed longtime support for the idea.”
In light of the progress its competitors are taking toward renewability, ExxonMobil’s steps forward only highlight how far the company has fallen behind the curve, especially taking into account its recent timeline of events.
During the years and months leading to the January 5 publication, ExxonMobil repeatedly found itself on the climate change denying side of arguments and actions. In a 2015 article, TriplePundit writer Tina Casey called attention to the company’s argument that harvesting fossil fuel resources can help strengthen emerging economies; as then-CEO Rex Tillerson said, “What good is it to save the planet if humanity suffers?”
More recently, ExxonMobil found itself in the news after Bloomberg leaked documents outlining plans to increase oil drilling and carbon emissions as a whole. Then right before the holidays, the company published an emissions reduction plan that sets targets for per-barrel emissions instead of absolutely emissions and leaves out Scope 3 emissions — thus making room for ever-increasing production.
ExxonMobil’s tiptoeing around real change contrasts deeply with European counterparts such as BP and Royal Dutch Shell, which are taking action to decarbonize and thus remain resilient in a renewables-focused world. BP, for example, acquired solar energy developer Lightsource Renewable Energy, now Lightsource BP, and says it is determined to generate 8 to 10 percent returns for its investors from its low-carbon portfolio. Royal Dutch Shell has also been leading the pack in clean-energy deals over the last decade.
Despite ExxonMobil’s lukewarm commitments, the company saw a 2 percent jump in its stock the day after the January 5th report. As a whole, though, 2020 wasn’t a year of great growth for the company. Shares dropped over 40 percent over the course of the year, and ExxonMobil said it would lay off 15 percent of its workforce.
Thinking from a purely financial perspective, it’s clear to see why investors would be concerned about the company’s long-term trajectory. While companies like BP have been building cleaner during the pandemic, Exxon is largely staying its course with petroleum.
Though the world is still heavily dependent on petroleum, more evidence suggests renewables are gaining more traction with investors. Further, NextEra Energy, which operates the most wind and solar installations in the world, recently surpassed ExxonMobil as the most valuable energy producer in the United States.
Exxon’s January report shows clearly it has felt pressure from stakeholders to make meaningful changes to its operations and take accountability for its global impacts. Thus far, though, report after report has exhibited stubborn adherence to an out-dated world view instead of humble willingness to comply.
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