ExxonMobil Corporation is a publicly listed fully integrated oil and gas company headquartered in the USA. In 2020, it had USD 178.57 billion in revenue and a reported 72,000 employees*. ExxonMobil is the largest of the Western oil and gas majors. Its scope 3 emissions from petroleum product sales were equivalent to all of Canada's emissions in 2019. Its climate plan is unambitious and lacks detail.
ExxonMobil is targeting a 15-20% reduction in the scope 1 and 2 emissions intensity of its upstream operations by 2025 compared to 2016. As upstream emissions account for only 45% of its total scope 1 and 2 emissions, the majority of ExxonMobil’s operational emissions are not covered by any emissions target.
Assuming a target of 17.5% reduction by 2025, which is midway between 15-20%, the company would need to be nearly three times more ambitious to deliver the reduction in upstream emissions intensity required by its 1.5C pathway. ExxonMobil also urgently needs to set a target that covers scope 3 emissions, which account for nearly 83% of its total emissions. Further, it needs to establish both short-term interim targets, as well as long-term strategic targets.
To avoid exceeding its 1.5°C carbon budget, ExxonMobil needs to cease all exploration for new oil and gas fields and limit production from existing fields and reserves. If the company utilises all its fields that are currently under production as well as reserves, its emissions are expected to exceed its 1.5°C carbon budget by 50% between 2019 and 2050. This does not account for the development of new, unsanctioned oil and gas fields, which cannot be approved under the International Energy Agency’s (IEA’s) 1.5°C scenario. Despite this, ExxonMobil continues exploration for new oil and gas fields, particularly in Guyana, Suriname and Brazil, which could mean the company will exceed its carbon budget by even more than 50%.
ExxonMobil announced plans in early 2021 to invest USD 3 billion on “lower emission energy solutions” through to 2025. The company has named carbon capture and storage (CCS) technology and hydrogen as two potential areas for investment. If this investment is assumed to be USD 750 million annually from 2021 to 2025, it will account for nearly 4.3% of planned total CapEx in 2021 and nearly 3.3% in 2022-2025. Such a small share of total CapEx is unlikely to drive the company towards a major shift to a lower-carbon business model. Instead, ExxonMobil should be aiming for the sectoral expectation for oil and gas companies to dedicate 77% of their CapEx to low-carbon and mitigation projects to be aligned with a 1.5°C scenario.
The scope 1, 2 and 3 emissions intensity of ExxonMobil’s sold products was estimated to have marginally increased between 2014 and 2019. This is at odds with the estimated 4% decrease in emissions intensity that the company needs to achieve every year to align with its 1.5°C pathway by 2024. The company can achieve this required emissions reduction by increasing its low-carbon energy sales and reducing its fossil fuel sales. However, ExxonMobil discloses no information on revenue or sales from low-carbon products and services, indicating these are currently negligible.
ExxonMobil continues to support politicians and trade associations that oppose climate policy. The company-sponsored Political Action Committee donated to a number of members and former members of the US Congress in the 2019-20 election cycle who have denied, doubted or played down climate change. The climate change record of these members of Congress has been highlighted in a 2019 Business Insider article.
The company also gave more than USD 100,000 in 2019 to a number of trade associations that have been reported to oppose climate policy. These include the American Petroleum Institute (API), the American Fuel and Petrochemical Manufacturers (AFPM) and the Western States Petroleum Association (WSPA). At its 2021 annual general meeting, the company’s investors voted for a resolution obliging the company to describe how its direct and indirect lobbying activities align with the Paris Agreement.
ExxonMobil established a Low Carbon Solutions business in early 2021, which will have an initial focus on CCS. The company states it is advancing plans for more than 20 CCS opportunities globally. However, it provides limited information on current and expected profitability, growth plans and deployment schedules for its CCS projects. Little information could be found on how ExxonMobil will use CCS to generate low-carbon revenue. The company has proposed a large CCS hub in Houston to capture and store industrial emissions, but no evidence was found showing that it has established collaborations with potential industrial customers.
ExxonMobil receives a trend score of -. If the company were reassessed in the near future, its score would likely decrease. If the company continues the trajectory seen between 2014 and 2019, its scope 1, 2 and 3 emissions intensity will see no decline. Even though the company is already expected to exceed its 1.5°C carbon budget by 50% between 2019 and 2050, it continues to explore for new oil and gas fields.
ExxonMobil’s climate strategy is unambitious and lacks key elements. Investors recently showed their disaffection with the company’s management by electing three board directors against the wishes of the CEO. These new directors were chosen in part to help ExxonMobil better manage the low-carbon transition.
ExxonMobil is targeting a 15-20% reduction in its upstream scope 1 and 2 emissions intensity by 2025 compared to 2016. This target is supported by a 40-50% reduction in methane intensity and a 35-45% reduction in flaring intensity. The company has not set a target that covers scope 3 emissions.
ExxonMobil will be investing USD 3 billion in lower-emission solutions between 2021 and 2025, which is 3.3% of its total planned CapEx, and it does not have an internal carbon price. Its focus is on CCS, hydrogen and biofuels, though it lacks clear plans to scale these up.
ExxonMobil has power purchase agreements (PPAs) with Ørsted to deliver 500 megawatts (MW) of renewable electricity supply to power its Texas operations. It is increasing its oil and gas exploration and production activities in Guyana and Brazil.
In the “Exxon Knew” investigation, campaigners and academics have documented evidence to show that ExxonMobil has misled the public on climate science for decades. Leaked documents reported by Bloomberg show that ExxonMobil’s seven-year investment plan adopted in 2018 was expected to increase its annual scope 1 and 2 emissions by 21 million tonnes between 2021 and 2025.
ExxonMobil’s climate strategy lacks ambitious and comprehensive targets. It focuses on less mature technologies like CCS and hydrogen, but it lacks a clear road map to scale these up. The company continues exploration for new oil and gas fields, even though utilizing all its current reserves would lead to the company overshooting its 2019-2050 1.5°C carbon budget by 50%.