News wire — Oil major Exxon Mobil Corp, under increasing pressure from investors and climate change campaigners, said on Monday it planned to reduce its greenhouse gas emissions over the next five years.
Last Thursday, the Church Commissioners for England joined growing investor campaigns to demand changes at Exxon and backed calls for a board refresh and development of a strategy for the largest U.S. oil company’s transition to cleaner fuels.
Several of Exxon’s rivals this year have set longer term climate goals. Royal Dutch Shell and BP Plc aim to reduce greenhouse gas emissions to net zero by 2050.
Exxon said it will start reporting so-called Scope 3 emissions in 2021, a large category of greenhouse gases emitted from fuels and products it sells to customers, such as jet fuel and gasoline.
By 2025, Exxon also would reduce the intensity of operated oilfield greenhouse gas emissions by 15% to 20% from 2016 levels.
The reduction would be supported by a 40% to 50% decrease in methane intensity and a 35% to 45% decrease in flaring intensity across Exxon’s global operations, with routine natural gas flaring eliminated in a decade, the company said.
Since the 2015 Paris climate accord set a goal of keeping global warming to well below 2 degrees Celsius, pressure from investors has increased and some of Exxon’s peers have agreed more ambitious targets.
“We certainly recognize the direction of travel that Paris sets out and the ambitions for society to get to net zero as early as possible before the end of the century,” said Pete Trelenberg, ExxonMobil director of greenhouse gas and climate change, during a news conference on Monday.
“What we have tried to do is to develop specific actionable plans that we can hold our organization accountable to drive continuous improvement in emissions.”
Further goals would be set as the 2025 targets are met, Trelenberg said.
The targets are “encouraging news and doubtless a response in part to expanding shareholder pressure,” said Timothy Smith, director of ESG (Environmental, Social and Governance) shareowner engagement at Boston Trust Walden, which has backed several shareholder proposals seeking improved disclosure at Exxon and other companies. “They had long opposed detailing Scope 3 emissions so this is a notable turn for them. And Exxon is known for its strength in managing policy pledges it makes.”
Exxon said it will meet goals it set in 2018 by the end of this year to cut methane emissions 15% and flaring by 25% compared with 2016 levels.
Last week, Engine No. 1, a $250 million California-based firm, called for expanded spending and pay cuts at Exxon, a board shake-up and shift to cleaner fuels. Its views were supported at least in part by California State Teachers’ Retirement System (CalSTRS) and hedge fund D.E. Shaw, which has $50 billion under management.
(Reporting by Jennifer Hiller in Houton and Arunima Kumar and Shariq Khan in Bengaluru; Editing by Amy Caren Daniel, Barbara Lewis and David Gregorio)
