Latest update November 5th, 2024 1:00 AM
Exxon caves in to their investors’ call for truer environmental impact report
Kaieteur News – Oil supermajor ExxonMobil has finally bowed to investors’ pressure to start reporting, on an annual basis, Scope Three emissions, a category of emissions it has evaded disclosing for many years. This follows a plan it announced last month to reduce its emissions by certain specified periods.
To many climate activists and climate conscious investors, Exxon’s additional reporting provides a truer representation of the impact of ExxonMobil’s work on the global environment. ExxonMobil disagrees.
Simply put, there are three accepted categories of emissions for this kind of reporting by companies like ExxonMobil: Scopes One, Two and Three.
In its report titled ‘ExxonMobil 2021 Energy and Carbon Summary’, it is explained that Scope One emissions data generally covers the direct greenhouse gas emissions of ExxonMobil’s operations, while Scope Two data tells investors and the public of the indirect greenhouse gas emissions from energy purchased by the company to power its operations.
Scope Three data refers to the company’s “indirect” (as it notes) greenhouse gas emissions derived from use of the company’s products. The sale of petroleum products by Exxon for 2019 was equivalent to 730 million metric tons of carbon dioxide.
Exxon disagrees with assertions that Scope Three emissions data fairly represents its own efforts to protect the global environment, as it said that those emissions are outside of its control.
It said that, “Because Scope One and Scope Two emissions are within the direct control of a company, the criteria for identifying and reporting them is well established, transparent and consistent across industries.”
“Reporting Scope Three emissions, however, is less certain and less consistent,” it states. “Evaluating a company’s Scope Three emissions and comparing them to other companies can be challenging due to inconsistent reporting methodologies, as well as potential duplication, inconsistencies and inaccuracies that may occur when reporting emissions that are the result of activities from assets not owned or controlled by the reporting organisation. The International Petroleum Industry Environmental Conservation Association (IPIECA) acknowledges these issues.”
It further posited that Scope Three emissions are misleading when it comes to providing insight into the company’s emissions-reduction performance because, for example, data on increased natural gas sales for power generation would show an increase in Scope Three emissions despite the effect such sales would have on the amount of coal burned for power generation.
Exxon said that meaningful Scope Three emissions reductions would ultimately be driven by changes in society’s energy use and the development of more affordable low-emission technologies.
This company will only see increased pressure from climate-conscious investors in the years to come, as its investors have blasted it as a poor performer among its oil industry peers, when it comes to reporting.
In the past two years, investors such as Legal and General Investment Management Limited (LGIM) and the Church of England have dumped Exxon stocks out of dissatisfaction with its performance. Its European shareholders have lead the charge, in this regard.
Exxon has also faced multiple lawsuits from US states like New York and Massachusetts, as well as US local government leaders, which allege that it made damning findings years ago about the impact its operations would have on the environment, and that it deliberately hid this information so it could lie to its shareholders and the public about the true environmental cost of its work.
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