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
Widespread fragmentation is stalling the growth of the IIoT and making it difficult for partners to work together. The number of software platforms, apps, hardware and connectivity standards is creating paralysis among businesses that are afraid of being locked into a solution. EdgeX Foundry is unifying the community around a common IoT edge framework and an ecosystem of interoperable components.
In his session at 21st Cloud Expo, Carl J. Levine, Senior Technical Evangelist for NS1, will objectively discuss how DNS is used to solve Digital Transformation challenges in large SaaS applications, CDNs, AdTech platforms, and other demanding use cases. Carl J. Levine is the Senior Technical Evangelist for NS1. A veteran of the Internet Infrastructure space, he has over a decade of experience with startups, networking protocols and Internet infrastructure, combined with the unique ability to it...
"MobiDev is a software development company and we do complex, custom software development for everybody from entrepreneurs to large enterprises," explained Alan Winters, U.S. Head of Business Development at MobiDev, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
Vulnerability management is vital for large companies that need to secure containers across thousands of hosts, but many struggle to understand how exposed they are when they discover a new high security vulnerability. In his session at 21st Cloud Expo, John Morello, CTO of Twistlock, addressed this pressing concern by introducing the concept of the “Vulnerability Risk Tree API,” which brings all the data together in a simple REST endpoint, allowing companies to easily grasp the severity of the ...
Agile has finally jumped the technology shark, expanding outside the software world. Enterprises are now increasingly adopting Agile practices across their organizations in order to successfully navigate the disruptive waters that threaten to drown them. In our quest for establishing change as a core competency in our organizations, this business-centric notion of Agile is an essential component of Agile Digital Transformation. In the years since the publication of the Agile Manifesto, the conn...
In his session at 21st Cloud Expo, James Henry, Co-CEO/CTO of Calgary Scientific Inc., introduced you to the challenges, solutions and benefits of training AI systems to solve visual problems with an emphasis on improving AIs with continuous training in the field. He explored applications in several industries and discussed technologies that allow the deployment of advanced visualization solutions to the cloud.
Enterprises are adopting Kubernetes to accelerate the development and the delivery of cloud-native applications. However, sharing a Kubernetes cluster between members of the same team can be challenging. And, sharing clusters across multiple teams is even harder. Kubernetes offers several constructs to help implement segmentation and isolation. However, these primitives can be complex to understand and apply. As a result, it’s becoming common for enterprises to end up with several clusters. Thi...
While some developers care passionately about how data centers and clouds are architected, for most, it is only the end result that matters. To the majority of companies, technology exists to solve a business problem, and only delivers value when it is solving that problem. 2017 brings the mainstream adoption of containers for production workloads. In his session at 21st Cloud Expo, Ben McCormack, VP of Operations at Evernote, discussed how data centers of the future will be managed, how the p...
"NetApp is known as a data management leader but we do a lot more than just data management on-prem with the data centers of our customers. We're also big in the hybrid cloud," explained Wes Talbert, Principal Architect at NetApp, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
"Space Monkey by Vivent Smart Home is a product that is a distributed cloud-based edge storage network. Vivent Smart Home, our parent company, is a smart home provider that places a lot of hard drives across homes in North America," explained JT Olds, Director of Engineering, and Brandon Crowfeather, Product Manager, at Vivint Smart Home, in this SYS-CON.tv interview at @ThingsExpo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
The question before companies today is not whether to become intelligent, it’s a question of how and how fast. The key is to adopt and deploy an intelligent application strategy while simultaneously preparing to scale that intelligence. In her session at 21st Cloud Expo, Sangeeta Chakraborty, Chief Customer Officer at Ayasdi, provided a tactical framework to become a truly intelligent enterprise, including how to identify the right applications for AI, how to build a Center of Excellence to oper...
"IBM is really all in on blockchain. We take a look at sort of the history of blockchain ledger technologies. It started out with bitcoin, Ethereum, and IBM evaluated these particular blockchain technologies and found they were anonymous and permissionless and that many companies were looking for permissioned blockchain," stated René Bostic, Technical VP of the IBM Cloud Unit in North America, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Conventi...
"Akvelon is a software development company and we also provide consultancy services to folks who are looking to scale or accelerate their engineering roadmaps," explained Jeremiah Mothersell, Marketing Manager at Akvelon, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
Coca-Cola’s Google powered digital signage system lays the groundwork for a more valuable connection between Coke and its customers. Digital signs pair software with high-resolution displays so that a message can be changed instantly based on what the operator wants to communicate or sell. In their Day 3 Keynote at 21st Cloud Expo, Greg Chambers, Global Group Director, Digital Innovation, Coca-Cola, and Vidya Nagarajan, a Senior Product Manager at Google, discussed how from store operations and ...
"Infoblox does DNS, DHCP and IP address management for not only enterprise networks but cloud networks as well. Customers are looking for a single platform that can extend not only in their private enterprise environment but private cloud, public cloud, tracking all the IP space and everything that is going on in that environment," explained Steve Salo, Principal Systems Engineer at Infoblox, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Conventio...