Exxon and climate change

The shareholders of Exxon Mobil Corp. have asked the energy giant to publicly disclose how the fight against climate change could affect the company’s bottom line.  The initiative was supported by more than 62 percent of shareholders who voted — a big leap from last year, when there was 38 percent support for a similar proposal.  The yearly reports “would include details on how the company would survive in the event that carbon-reducing policies lead to lower oil demand”.   Exxon Mobil says it supports the Paris deal,  but is opposed the shareholder effort, saying the company is tackling climate change in other ways (oh, really? Ed.)

It’s a victory for environmental activists, who have been urging the oil company to consider the economic impact the Paris accord would have if it is fully implemented. The global agreement calls for more investment in renewable energy and for deep cuts in the greenhouse gas emissions. Apparently,  major financial firms like BlackRock, and possibly Vanguard and State Street, supported the initiative, illustrating that Investors are beginning to get the message themselves.

The nonbinding proposal now goes before Exxon Mobil’s board. Chief Executive Darren Woods said the board members would take note of the strong support from shareholders.

.Within the past two years, evidence has emerged that Exxon was aware of the threat posed by climate change for decades before the company publicly acknowledged it.  Now the goal is to make Exxon plan for a world where fossil fuels like oil and natural gas may be replaced by renewable energy.   The threat to it isn’t just reputational but is a material risk to their core business. There has to be an eventual decline in fossil fuel demand.  (Based on a report on the NPR website, precised and edited).

The vote came before  President Trump announced his breathtakingly irresponsible and damaging decision on to withdraw from the Paris climate agreement.

Judging by the poor showing of Mr. Wood’s predecesor, Rex Tillerson, who is now the semi-operational Secretary of State, there must have been a dire lack of leadership at Exxon. Let’s hope that the elevation of Mr. Woods is not simply a case of ” buggin’s turn” and that he has some foresight and gumption.



One Comment

  1. The good news is that renewables are becoming increasingly profitable. It is getting cheaper to generate renewable energy because of technological improvements. Meanwhile, fossil fuels aren’t as profitable as they once were, largely due to a glut in global energy demand, the increasing difficultly of gas and oil extraction as reserves are depleated, and competition from green energy. Exxon realises that- their increasing focus on green energy is more due to a desire to make money than to help the environment.
    Having said that, the increasing viability of renewables doesn’t mean the government should stop intervening in the energy market. Contrary to what some Republicans claim, the free market alone won’t stop climate change. Fracking needs to be phased out soon, it should only last for as long as the energy it produces cannot be generated by renewables. The government should ban drilling on any new sites, invest in electric cars, and electrify rail routes that still use diesel trains. Air pollution, which admittedly isn’t as bad as it was in the 70s, can only be curbed further with tight regulations. Local governments should also pedestrianise their town centres to discourage car use. Overall this is good news, but no excuse for the government to go wobbly on climate policy.

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