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.
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
The shareholders' resolution was withdrawn when Exxon responded by volunteering to issue the report.
The company pointed to its efforts to promote energy efficiency while still meeting the world's energy needs and promoting GDP growth and increased quality of life in the nations it serves. While the company backed away from projecting CO2 concentrations in the atmosphere, it said "as population grows and standards of living increase" it anticipates carbon emissions will start to decrease beginning between 2020 and 2040. The report claimed the company's emissions projections match those called for by the U.N.'s Intergovernmental Panel on Climate Change.
Citing its ongoing analysis over the last several years, the company said, "We are confident that none of our hydrocarbon reserves are now or will become 'stranded'." However the company also says that the "low-carbon scenario" anticipated by stakeholders is unreasonable, due to costs and impact on ongoing economic development.
"[I]t is difficult to envision governments choosing this path in light of the negative implications," the Exxon report said.
The original sponsors of the shareholder resolution said they aren't satisfied with this account.
"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 . . . ."
The group pointed specifically to the predictions of such outcomes in Monday's IPCC report.
-- Written by Carlton Wilkinson in New York