Welcome!

News Feed Item

Shareholders: ExxonMobil Takes Crucial Step Of Acknowledging Carbon Asset Risk … But More Is Needed

Shareholder Advocates Seek Scenario Planning for a Low Carbon Economy

BOSTON and SAN FRANCISCO, March 31, 2014 /PRNewswire-USNewswire/ -- In a much-anticipated report to shareholders today on stranded carbon asset risk, ExxonMobil expressed the view that there is limited basis for concern.  Shareholder advocates Arjuna Capital and As You Sow– which withdrew a shareholder resolution when ExxonMobil agreed to release the report -- expressed disappointment with aspects of the response, but noted that it is a 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.

The report makes clear that shareholders and ExxonMobil do agree on some fundamental points with regard to climate change. First, "ExxonMobil takes the risk of climate change seriously," as do shareholders. Second, ExxonMobil "continues to take meaningful steps to help address the risk" including "improving energy efficiency and reducing emissions at our operations," being "on the forefront of technologies to lower greenhouse gas emissions" and a host of other actions to reduce climate change impacts.  Third, with regard to global policy to address climate change, most shareholders and ExxonMobil would tend to align:

"ExxonMobil advocates an approach that ensures a uniform and predictable cost of carbon; allows market prices to drive solutions; maximizes transparency to stakeholders; reduces administrative complexity; promotes global participation; and is easily adjusted to future developments in climate science and policy impacts."

Nonetheless, shareholders were disappointed in the level of disclosure in the report and will continue to work with Exxon and other fossil fuel companies to increase transparency in key areas. Importantly, shareholders 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. In its response, the company said it believed that any future capping of carbon-based fuels to the levels of a "low carbon scenario" is highly unlikely due to pressing social needs for energy.

Shareholder advocates from Arjuna Capital and As You Sow, who pursued the report from ExxonMobil through a shareholder resolution, reacted with disappointment to Exxon's quick dismissal of risk factors associated with stranded carbon assets.

Natasha Lamb, director of equity research and shareholder engagement at Arjuna Capital said:

"Investors now know that ExxonMobil is not considering a low-carbon scenario in its planning, which places shareowner capital at risk.  We believe the company should protect shareholder value by divesting assets at greatest risk of stranding, diversifying investments into low-carbon alternatives, and returning money to shareholders that might otherwise fund future 'at risk' assets.  While Exxon asserts that we will face social upheaval if carbon-based fuels are limited, we believe the greatest social disruption will come from climate change itself in the form of physical displacement and food scarcity—as outlined in today's release of the IPCC report."

"We appreciate that Exxon provided this report at a time when other companies have been unwilling to bring their assumptions into the open," said Danielle Fugere, president of As You Sow.  "However, shareholders need more in-depth information about how Exxon is positioned to withstand climate risk. We will continue working with Exxon and other fossil fuel companies to increase disclosures about these critical issues including how companies analyze value of capital investments across a range of scenarios, including the worst case scenario."

"Exxon's report proves that the debate is less about whether the world will take action to curb climate change and more about how quickly it will happen," said Andrew Logan, director of the Oil & Gas Program at Ceres, which coordinates the Carbon Asset Risk Initiative. "Exxon has acknowledged the significant risks climate change poses to its business, the likelihood of a price on carbon, and growing momentum to address climate change – yet still calls a low-carbon scenario unlikely. Investors disagree, and will continue to push Exxon to align their planning with this reality."

Arjuna Capital and As You Sow continue to call for the integration of carbon asset risk into Exxon's scenario planning.  In a low-carbon economy, additional questions that the proponents wish to see addressed include:  "What percent of company assets are most at risk of stranding?; What would be the decline in company value?; What would losses be?; How would Exxon stack up against its competitors?" The report today does nothing to address these important concerns.

Exxon's position today stands in stark contrast to President Obama's goal to reduce greenhouse gases by 80 percent by 2050 and acknowledgement by world governments that we cannot burn more than one-third of current proven carbon reserves if we are to prevent a greater than 2 degree rise in global temperature.

Based on facts as we know them, the $20 trillion in reserves currently on the balance sheets of the 200 largest coal, oil, and gas companies are at risk of devaluation and stranding.

ABOUT ARJUNA CAPITAL and AS YOU SOW

Arjuna Capital is the sustainable wealth management platform of Baldwin Brothers Inc., an SEC-registered independent financial advisory firm established in 1974. For more information visit www.arjuna-capital.com.

As You Sow is a nonprofit organization that promotes environmental and social corporate responsibility through shareholder advocacy, coalition building, and innovative legal strategies. For more information visit www.asyousow.org.

SOURCE As You So, San Francisco and Arjuna Capital, Boston

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
All clouds are not equal. To succeed in a DevOps context, organizations should plan to develop/deploy apps across a choice of on-premise and public clouds simultaneously depending on the business needs. This is where the concept of the Lean Cloud comes in - resting on the idea that you often need to relocate your app modules over their life cycles for both innovation and operational efficiency in the cloud. In his session at @DevOpsSummit at19th Cloud Expo, Valentin (Val) Bercovici, CTO of Soli...
Complete Internet of Things (IoT) embedded device security is not just about the device but involves the entire product’s identity, data and control integrity, and services traversing the cloud. A device can no longer be looked at as an island; it is a part of a system. In fact, given the cross-domain interactions enabled by IoT it could be a part of many systems. Also, depending on where the device is deployed, for example, in the office building versus a factory floor or oil field, security ha...
Amazon has gradually rolled out parts of its IoT offerings in the last year, but these are just the tip of the iceberg. In addition to optimizing their back-end AWS offerings, Amazon is laying the ground work to be a major force in IoT – especially in the connected home and office. Amazon is extending its reach by building on its dominant Cloud IoT platform, its Dash Button strategy, recently announced Replenishment Services, the Echo/Alexa voice recognition control platform, the 6-7 strategic...
"Qosmos has launched L7Viewer, a network traffic analysis tool, so it analyzes all the traffic between the virtual machine and the data center and the virtual machine and the external world," stated Sebastien Synold, Product Line Manager at Qosmos, in this SYS-CON.tv interview at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Without a clear strategy for cost control and an architecture designed with cloud services in mind, costs and operational performance can quickly get out of control. To avoid multiple architectural redesigns requires extensive thought and planning. Boundary (now part of BMC) launched a new public-facing multi-tenant high resolution monitoring service on Amazon AWS two years ago, facing challenges and learning best practices in the early days of the new service. In his session at 19th Cloud Exp...
Everyone knows that truly innovative companies learn as they go along, pushing boundaries in response to market changes and demands. What's more of a mystery is how to balance innovation on a fresh platform built from scratch with the legacy tech stack, product suite and customers that continue to serve as the business' foundation. In his General Session at 19th Cloud Expo, Michael Chambliss, Head of Engineering at ReadyTalk, discussed why and how ReadyTalk diverted from healthy revenue and mor...
As data explodes in quantity, importance and from new sources, the need for managing and protecting data residing across physical, virtual, and cloud environments grow with it. Managing data includes protecting it, indexing and classifying it for true, long-term management, compliance and E-Discovery. Commvault can ensure this with a single pane of glass solution – whether in a private cloud, a Service Provider delivered public cloud or a hybrid cloud environment – across the heterogeneous enter...
You have great SaaS business app ideas. You want to turn your idea quickly into a functional and engaging proof of concept. You need to be able to modify it to meet customers' needs, and you need to deliver a complete and secure SaaS application. How could you achieve all the above and yet avoid unforeseen IT requirements that add unnecessary cost and complexity? You also want your app to be responsive in any device at any time. In his session at 19th Cloud Expo, Mark Allen, General Manager of...
Financial Technology has become a topic of intense interest throughout the cloud developer and enterprise IT communities. Accordingly, attendees at the upcoming 20th Cloud Expo at the Javits Center in New York, June 6-8, 2017, will find fresh new content in a new track called FinTech.
"We are a leader in the market space called network visibility solutions - it enables monitoring tools and Big Data analysis to access the data and be able to see the performance," explained Shay Morag, VP of Sales and Marketing at Niagara Networks, in this SYS-CON.tv interview at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
@DevOpsSummit taking place June 6-8, 2017 at Javits Center, New York City, is co-located with the 20th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. @DevOpsSummit at Cloud Expo New York Call for Papers is now open.
Keeping pace with advancements in software delivery processes and tooling is taxing even for the most proficient organizations. Point tools, platforms, open source and the increasing adoption of private and public cloud services requires strong engineering rigor - all in the face of developer demands to use the tools of choice. As Agile has settled in as a mainstream practice, now DevOps has emerged as the next wave to improve software delivery speed and output. To make DevOps work, organization...
The 20th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held June 6-8, 2017, at the Javits Center in New York City, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Containers, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportunity. Submit your speaking proposal ...
"We are a modern development application platform and we have a suite of products that allow you to application release automation, we do version control, and we do application life cycle management," explained Flint Brenton, CEO of CollabNet, in this SYS-CON.tv interview at DevOps at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Regulatory requirements exist to promote the controlled sharing of information, while protecting the privacy and/or security of the information. Regulations for each type of information have their own set of rules, policies, and guidelines. Cloud Service Providers (CSP) are faced with increasing demand for services at decreasing prices. Demonstrating and maintaining compliance with regulations is a nontrivial task and doing so against numerous sets of regulatory requirements can be daunting task...