Exxon Mobil Corp. has just announced its commitment to achieving several new emissions targets, which will include starting a pollution report related to customer use of its products.
According to industry experts, this action comes days after activist investors criticized the oil-giant for its poor environmental record.
Criticism and new targets
Last week, activist investors from Engine No. 1 and D.E. Shaw & Co, both investment firms, went public with their criticism towards Exxon Mobil for not acting quickly enough on emissions.
In this regard, the activists criticized the Company for its years of low shareholder returns as well. Engine No. 1 called for “more significant investment in net-zero emissions energy sources” in its letter to Exxon’s board, Bloomberg reported.
Exxon’s new targets comprehend reducing the intensity of upstream emissions by as much as 20% over the next five years. They also include flaring and methane leaks curtail. The Company added this plan is consistent with the Paris Agreement’s goals.
The new targets include:
- Drop-in upstream emissions intensity in 15% to 20% by 2025 with respect to 2016 levels
- Decline in methane intensity by 40% to 50%
- Fall in flaring intensity by 35% to 45%
- Eliminate routine flaring by 2030
- Provide Scope 3 emissions each year.
Exxon Mobil recognized its climate goals would require the Company to reduce its emissions intensity, leading to less pollution per barrel of oil produced as opposed to absolute emissions.
Through these actions, the Company should have little room to increase overall emissions in the future, even if global oil output grows.
However, experts note Exxon’s targets seem weaker with respect to those made by its European counterparts or several other oil-giants.
Those other companies have set reduction goals with a Level 3 Scope regarding emissions – this means they link their targets to their own operations and customers’ use of their petroleum products.
Exxon Mobil: far from its European peers?
Currently, all major European oil companies have net-zero goals integrated within their agendas. For instance, BP Plc, Repsol SA, and Eni SpA have made public their aim to deliver absolute reductions in the short term.
Companies such as Royal Dutch Shell Plc, Total SE, and Equinor ASA have also set emissions intensity goals.
Exxon Mobil announced its goals are “specific, actionable plans that can hold (the) organization accountable.” Pete Trelenberg, Exxon’s director of greenhouse gas and climate change, added in a call with reporters that these new goals would be updated over time.
Related content: ExxonMobil to cut production spending by 2025
Trelenberg explained why Exxon chose to target emissions intensity rather than absolute emissions. The reason behind this decision was because they wanted “to try and achieve first-quartile performance.”
“To achieve the intensity targets, we do need absolute emissions reductions as well, and those will be particularly focused in the methane and the flaring areas,” he said.Bottom of Form
Exxon said Monday its emissions pledge was made as part of its annual business planning process. The Company stressed the announcement is the “result of several months of detailed analysis and includes input from shareholders.”