The International Energy Agency warned in its 2008 World Energy Outlook: “For all the uncertainties highlighted in this report, we can be certain that the energy world will look a lot different in 2030 than it does today. The world energy system will be transformed…”
Cambridge Energy Research Associates’ (CERA) Chairman Daniel Yergin notes that “climate change and putting a price on carbon will change the dynamics of the energy marketplace.” CERA further reports that clean energy investment could surpass $7 trillion by 2030 and that “clean energy is not a bubble or passing phenomenon. Clean energy is now poised to cross the divide and move from the fringes of the energy sector to the mainstream.”
Shareholders’ repeated request for emission reduction goals reiterates ExxonMobil’s own Environmental Business Planning process, which is used “to identify key environmental drivers…, set targets in key focus areas, and identify projects and actions to achieve those targets.” (Carbon Disclosure Project 6 [CDP6], 3(a) iii)
Proponents believe ExxonMobil’s board never has sufficiently responded to shareholders in their request for an action plan and articulated goals for reducing GHG emissions from the Company’s products and operations.
ExxonMobil has set an energy efficiency target for operations of 10% by 2012, a 5,000-Megawatt cogeneration goal by 2011, and announced investments of $4 billion to reduce flaring. And the Company finally reduced direct GHGs in 2007, after a multi-year struggle with rising GHG emissions. However admirable, this progress is inadequate because the IEA estimates that, on average, only 10% of petroleum-related emissions are from industry operations.
ExxonMobil has recently announced $300 million for lithium ion battery technologies, and $100 million for carbon capture research. Yet, we believe ExxonMobil has done a poor job of articulating a cohesive business plan for dealing with climate risk and opportunity-especially regarding its products–or offered robust responses to the financial, regulatory, and technology impacts of the climate crisis.
BP, Royal Dutch Shell, ConocoPhillips, and Chevron have made newsworthy investments in renewables and low-carbon technologies to reduce emissions, and/or have begun integrating the cost of carbon into planning and investments. ConocoPhillips, BP America, and Shell have further endorsed calls for the U.S. to reduce carbon emissions by 60-80% by 2050.
We believe that ExxonMobil has not adequately assessed or disclosed the financial effects of climate regulation or industry-changing technologies. “We do not assess current and/or future financial effects because…In ExxonMobil’s view, it is impossible today to assess potential implications for shareholder value from regulatory approaches to address rising greenhouse gas concentrations.” (CDP6)
Shareholders request that the Board of Directors adopt quantitative goals, based on current technologies, for reducing total greenhouse gas emissions from the Company’s products and operations; and that the Company report to shareholders by September 30, 2009, on its plans to achieve these goals. Such a report will omit proprietary information and be prepared at reasonable cost.