Exxon's Climate Change Report Fails to Satisfy Investors

NEW YORK (TheStreet) -- ExxonMobil (XOM) responded Monday to shareholder requests with a report on its carbon emissions and climate change risk outlook that failed to assuage investor concern.

In a press release, Exxon stated its position that fossil fuels are necessary to meet the world's energy needs for the foreseeable future. However, William Colton, vice president of corporate strategic planning, conceded, "It is equally essential that society manages the risk of climate change by increasing energy efficiency and by investing in research into technologies to reduce greenhouse gas emissions."

He added, "The risk of climate change is clear and the risk warrants action."

The investor group issued its own press release responding to the report, lauding Exxon's response as "historic." Quoted in the release, 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. "

The acknowledgment by Exxon is possibly its strongest statement yet on the subject of climate change and carbon emissions. It marks a sharp change from the late 1990s, when the company was active in challenging climate change science and discouraging government policies around the world from addressing the risks. With executive offices based in Irving, Texas, ExxonMobil is the world's largest oil and gas company. 

A shareholder resolution backed by sustainable wealth management platform Arjuna Capital and nonprofit environmental investment group As You Sow, would have forced the company to issue a report on its potential for "stranded assets," particularly oil reserves that cannot be burned without pushing global warming to catastrophic levels. The group cited estimates suggesting two-thirds of the oil reserves already held -- of a total amounting to a potential $20 trillion -- cannot be burned.

As governments worldwide push for restrictions on carbon emissions, the group contended, further investment in discovering and developing oil reserves is not in shareholders' best interests.

Climate Change: Never Let a Good Crisis Go to Waste

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