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With investors who hold hundreds of millions in ExxonMobil stock pressuring it to improve its performance on climate change and invest more in clean energy, the Company announced a new five-year plan today.Under the plan, ExxonMobil will (1) cut the greenhouse gas intensity — that is, emissions per unit of output — from its oil-and-gas operations by 15%-20% and cut by 40%-50% the intensity of its emissions of methane, (2) cut deeply the amount of gas it flares at its operations b 2025 and will end the practice entirely by 2030, and (3) will begin next year to report its emissions caused by burning fossil fuels in its operations. According to Axios, experts said it’s not clear how much actual emissions might fall under the new plan.
Why This Matters: Weak sauce from a weak company. The ExxonMobil plan consists of only a few half measures — it falls far short of the industry standard set by ConocoPhillips, Occidental Petroleum, BP, and Shell, which have all pledged to have “net zero” emissions in the 2050 time frame. ExxonMobil only seven years ago was, according to the Wall Street Journal, America’s most valuable company, but today has lost 60% of its value and its shares are down 40% in 2020. Contrast this with multinational conglomerate Unilever, which said Monday it will have its shareholders vote on its ambitious climate change goals.
An Expert Calls ExxonMobile’s Plan “Underwhelming”
Axios and CNBC quote Andrew Logan, an analyst at Ceres, a sustainable investment advocacy group Ceres, who explained that Exxon is still lagging in the climate space. “There are some things to like in here, particularly around the flaring and methane commitments, but overall this is underwhelming and fails to address ExxonMobil’s main source of risk — its product emissions,” he told Axios via email. Logan told CNBC, “Nothing suggests any change in strategy. They are just optimizing the path they are already on.” “These are small but meaningful reductions for a company of their size,” Logan said. “It puts them more in line with Chevron, which is not a leader in this either.” According to CNBC, other experts also criticized the plan for its lack of detail, not to mention that the new five-year plan does not address emissions from the products it makes.
Unilever By Contrast
The pressure is increasing on businesses to elevate their climate ambitions, and shareholders are playing a key role, along with employees and consumers. ABC News reports that Unilever has set ambitious climate goals — achieving zero emissions from its own operations by 2030, reducing the average footprint of its products by 50% by 2030, and achieving net zero emissions from sourcing to point of sale for its products by 2039. Unilever’s CEO, Alan Jope, said in a statement:
“Climate change is the most pressing issue of our time and we are determined to play a leadership role in accelerating the transition to a zero-carbon economy. We have a wide-ranging and ambitious set of climate commitments — but we know they are only as good as our delivery against them. That’s why we will be sharing more detail with our shareholders who are increasingly wanting to understand more about our strategy and plans.”
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