Shareholders at ExxonMobil have long been pressuring the corporation to share its research on how climate change could affect future business, and now it appears they’re getting their way. Reuters reported this week that Exxon will be releasing a detailed report that explores “energy demand sensitivities, implications of two degree Celsius scenarios, and positioning for a lower-carbon future.”
Scientists have theorized that between 2000 and 2100, the average temperature worldwide will likely rise by about 2 degrees Celsius, leading the planet to a “tipping point” that will dramatically impact the world’s energy needs. Global climate efforts such as the Paris Agreement aim to stave off such a dire situation, but Exxon has nevertheless been pressured to take a stand in the meantime.
Originally, the board of directors at ExxonMobil opposed making any public statement regarding climate change, but they later buckled to outside pressure. More than 50 people, including both shareholders and climate activists, demanded earlier this year that the company begin producing an annual climate report. At Exxon’s annual shareholder meeting in May, 62 percent backed this demand.
Reactions to ExxonMobil’s announcement have been mixed. On one hand, New York state comptroller Thomas DiNapoli told Reuters that the decision is “a win for shareholders and for the company’s ability to manage risk.”
Meanwhile Tim Smith, who runs shareholder engagement efforts for Walden Asset Management, was less optimistic.
“This is giving no detail,” Smith said. “[Exxon’s statement] needs to be expanded to assure shareowners that they’re responsive to last year’s request.”
Exxon’s report is likely to have long-lasting ripple effects. In the short term, it will curry favor with some of the company’s biggest investors—BlackRock Inc and Vanguard Group are both among the major players that backed the May resolution, and they will be encouraged to see a greater focus on climate.
Down the road, the report will have even more impact, as ExxonMobil is being investigated in both Massachusetts and New York for misleading the public about climate risks. The corporation’s findings will surely shed new light on those cases, which are currently still pending.
Photo: An entrance to ExxonMobil’s corporate headquarters in Irving, Texas. Credit: Katherine Welles / Shutterstock.com