US oil and gas company Exxon Mobil on Monday (31, March) released a twofold report assessing potential impacts of climate change mitigation on its future business prospects. The first of its kind report was announced earlier in March in exchange for withdrawal of a shareholder resolution.
The company excluded its assets are or will be at risk due to climate change and related global efforts to reduce emissions, and it declared to be “confident that none of [its] hydrocarbon reserves are now or will become stranded”. Exxon explained its position in the view that “ all energy sources, including carbon-based fuels, are necessary to meet future global energy demand growth” driven by growing global population and GDP.
Shareholder advocates Arjuna Capital and As You Sow expressed disappointment with aspects of the response, but noted that it is an “historic first step forward, providing greater insight into how Exxon is approaching climate change risk and representing an end to the company’s previous refusal to acknowledge climate change issues”.
They observed that they “asked ExxonMobil to issue a report on how it stress tests capital investment opportunities and risk in a scenario where global temperature rise is limited to 2 degrees Celsius, in essence requiring that 2/3 of current fossil fuel reserves remain in the ground through 2050. Such a scenario means that some fossil fuel companies will not be able to sell some or all of their reserves, thereby stranding those assets and causing the value of the company to decline”. “Rather than providing information as to whether its reserves would be stranded, Exxon ignored the question”, thay said in a press statement.