Outcome: Successfully Withdrawn
WHEREAS, international energy companies face unprecedented pressure to reduce greenhouse gas (GHG) emissions. Nations implementing the Kyoto Protocol are committed to significant reductions.
The Guardian (10/07/04) reported: “Exxon… saw its greenhouse gas emissions jump 2% last year to 135.6m tones” and that “an Exxon spokesman admitted that the company had no targets for reductions in CO2 emissions although he insisted that it was working hard on ‘energy efficiency’ gains.” It said ExxonMobil’s “emissions are more than 50% higher than those of rival Britain’s BP despite the US firm’s oil and gas production being only slightly larger.”At the World Energy Congress (09/07/04), ExxonMobil’s Science Strategy and Programs Manager, Brian Flannery, said the company depends on new technology to address the issue, “not emissions abatement goals” (Asia Pulse Pte Limited, 09/07/04).
Flannery also noted the bulk of new energy demand “would come from developing countries which were outside the Kyoto Protocol.” However, presently ExxonMobil is significantly exposed to climate regulations. In 2003 at least 37% of our Company’s revenue came from just five nations (Canada, Japan, UK, Germany, Italy) that have signed the Kyoto Protocol.
ExxonMobil’s commitment toward “technological solutions for energy supply and use with much lower greenhouse gas emissions” seems overly dependent on the $10 million a year it’s given Stanford University’s Global Climate and Energy Project.
Competitors (ie, Shell, BP, ConocoPhillips, Statoil, Amerada Hess and Suncor) have taken early actions to reduce their exposure to climate related risks, including assuming costs for carbon in their strategic planning, reporting on and reducing their GHG emissions, engaging in emissions trading, and investing in renewable energy. BP’s emissions reduction activities have generated savings with an NPV of $650 million.
ExxonMobil’s own data show its total spending on research and development from 1997 – 2003 decreased between 2002-2003; meanwhile two of its three main competitors’ expenditures increased (WSJ 07/17/04).
Such conflicting data and statements create confusion about whether and how the company is prepared to cost-effectively meet GHG reduction requirements, exposing it to unnecessary risks. Pressure from pension funds to examine climate change risks raises the possibility that industry segments like our own “could be viewed as inherently risky because of their exposure to climate-change regulations” (WSJ 10/27/04).
This same resolution received an unprecedented 28+% of the vote of shareholders at the 2005 annual meeting.
RESOLVED: Shareholders request the Board undertake a comprehensive review and publish within six months of the annual meeting a report on how ExxonMobil will meet the greenhouse gas reduction targets of those countries in which it operates which have adopted the Kyoto Protocol.
The proponents hope the report will include:
- Projections of costs;
- Timelines for meeting mandatory reduction targets.
- An evaluation of whether earlier action to reduce emissions, as undertaken by key ExxonMobil competitors, would have reduced these costs.
- A study of the feasibility of reducing emissions in the US, which does not have restrictions on GHG emissions at the federal level but might implement them in the future.