Exxon Mobil's climate risk report: the verdict
Oil giant Exxon Mobil launched their anticipated ‘climate change risk report’ yesterday, with a collective shrug the apparent response from those who lauded the unprecedented move.
Two weeks ago, shareholder pressure from social investors Arjuna Capital solicited an agreement from Exxon to report the effects of climate change on their operations. Arjuna Capital claimed that as the world shifted towards green energy, oil investor’s capital is being put at risk by potentially creating a ‘carbon bubble’, leading to a collapse in fossil fuel prices.
But Exxon’s response has all the hallmarks of a company that’s been forced to be nice. In a handful of hastily assembled word documents, a glib opening statement clearly emerges through gritted teeth:
“ExxonMobil appreciates this opportunity to provide comments on the topics of global energy and climate change.”
They clearly haven’t grasped that in the English language to ‘appreciate’ something now means the exact opposite; if you say you ‘appreciate’ your Christmas present, you won’t get one next year.
But it’s unlikely activists and shareholders will be too concerned about semantic faux-pas; that Exxon Mobil acknowledges anthropogenic climate change in the report - having poured money into its denial for so long – will be seen as something of a coup either way.
Yet the report was never about admitting to climate change per se, it was about what Exxon are doing to ‘adapt’ to it, as the popular remedy goes, and avoiding a collapse in non-renewable energy prices as well as environmental changes.
Crucially, Exxon Mobil claims “we are confident that none of our hydrocarbon reserves are now or will become “stranded.”” The implication being that fossil fuel prices will remain high due to demand for the foreseeable future.
The key concern of Arjuna Capital is addressed in a section titled ‘Evaluating climate risk in our planning’ in which a key statement shows that they have pondered the possibility of a ‘climate bubble’ leading to a collapse in non-renewable energy prices:
“The company also tests investment opportunities against a broad set of economic assumptions, including low price scenarios that could be representative of a carbon-constrained environment”.
And in a further cede to the Shareholders demands, they also divulge that they are adapting their facilities to the anticipated increase on extreme weather events.
But it is unlikely that Exxon’s report will give its instigators much satisfaction, with the conclusion of the report saying drastic carbon reduction measures are unlikely, therefore fossil fuel demand will remain high, and thus profitable. In other words 'business as usual'. Nevertheless, an optimist could view it as a small foothold in the push for global awakening to the realities and dangers of climate change; especially potent in a week in which the IPCC report hit mainstream news, and conservative UK papers finally acknowledged anthropogenic climate change.